Who's right? The Confederation of British Industry (CBI), in a broadside fired before its conference next week, claims that the business-tax burden in Britain is higher than in four of the country's top five trading partners (see chart on next page). Only French companies have to shoulder a bigger load, it complains. Yet the government thinks companies are whingeing and exaggerating as usual. The CBI'S definition of the business-tax burden is certainly suspect. It includes not just corporate-income tax, but also three other taxes- on property, transport costs and employment. Most of the latter three are likely to be passed on respectively to landowners, consumers and workers, argues Stephen Bond of the Institute for Fiscal Studies. For example, this year's hike in employers' national-insurance contributions (in effect a payroll tax) may initially erode profitability, but in the long term employers will shift the cost on to workers through lower wage increases.
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