« Two realities of Labour politics | Main | Syria: overconfidence & tribalism »

November 26, 2015

Comments

TickyW

Employer NICs are part of an employee's wage. NICs confer pension and social security entitlements on employees. They are thus a deferred wage. Increasing employer NICs merely reduces an employee's current disposable income; a larger part of the employee's wage thus becomes deferred.

Luis Enrique

TickyW that might make sense if changes in NIC tied to changes in pension and social security entitlements, but that's not the world we live in.

Bob

"Employer NICs are part of an employee's wage. NICs confer pension and social security entitlements on employees. They are thus a deferred wage. "
Nope NICs are just another tax, despite all the propaganda.

Bob

To continue further, my point is a future government can always change the "pension and social security entitlements."

Luis Enrique

I think that paper says *some* incidence on wages. I presume some on profit. Not too dissimilar to corp tax but I'm guessing you would not call corp tax cuts "Osbourne's wage boost".

But I am not at all confident about incidence of corp taxes. Need to distinguish between incidence given investment, I.e. short run impact at existing firms, and incidence once levels of investment change. Latter is where incidence on workers supposedly emerges but I am personally v suspicious of that without being able to say quite why.

Luis Enrique

(I think my suspicion comes from fact corp taxes have been falling whilst investment and wages have stagnated. Although I cannot immediately say why empirical estimates like this https://www.aeaweb.org/articles.php?doi=10.1257/mac.2.3.31 are wrong )

Bob

Corp taxes need to increase along with capital allowances to encourage companies to invest. The exact opposite of Brown/Osbourne.

The comments to this entry are closed.

blogs I like

Why S&M?

Blog powered by Typepad