YOUR correspondent Mike Huffington (Letters, August 14) rightly draws attention to the Laffer Curve, the phenomenon well known to economists but seemingly less so to those who imagine that increasing taxes is the answer to every Chancellor’s prayer.

The curve describes the point at which a particular rate of taxation tends to become counter-productive and more tax begins to produce less revenue because of the way in which it changes the behaviour of individuals.

He might equally have mentioned the similar belief that taxing ‘rich and large corporations’ is somehow a painless process for mere individuals. Should we put the interests of these corporations ahead of real flesh and blood people, many of whom are struggling to make ends meet?

Frankly, I don’t know – it’s a technical fiscal problem and I am no fiscal expert. But what I do know is that corporations cannot be rich or poor in the same way as individuals. Wealth or poverty is a privilege reserved for their owners (shareholders), employees (whether they be directors or shelf-stackers) and customers.

Before you can decide whether taxing corporations at this or that rate is a sensible policy you need to identify the individuals who will actually bear the cost and how it is likely to affect their behaviour. The true cost of corporate taxation can only fall on shareholders, employees and customers. There is no one else.

Instead of endless party-political bickering about this or that rate of tax, our politicians would be more usefully employed (a) in simplifying our vastly over-complex taxation system and (b) ensuring that everyone, individual or corporate, actually pays whatever is properly due.

Tony Lawton,

Skelton,

York