We object to this description of the Asda takeover

This is a more and more common mistake:

Indeed they have, but as custodian of the public finances the Chancellor might have left the celebrations to others. A large chunk of that £1bn is likely to be paid for with much lower tax bills. Asda paid £95m in corporation tax last year under Walmart ownership. The takeover by the Issa brothers and their British private equity partner TDR, fuelled by £4bn of junk bonds and leveraged loans, is likely to leave the Exchequer out of pocket for some time.

As is typical in a leveraged buyout, the cost of the borrowing will be set against the supermarket’s profits, leaving less or perhaps nothing for the taxman to tax.

As a former investment bank analyst and hedge fund manager, Mr Sunak knows this better than most. There is nothing particularly unusual about any of it, beyond the fact it drew a round of applause from Number 11.

It’s entirely true that the tax bill to that specific corporate shell will be lower by being highly leveraged. Interest is a deductible expense of doing business. But that same interest is then taxable in the hands of the recipients. If they profit from the lending - which we can assume they intend at least to do - then those profits are taxable. Or if they pay it all out to their bankers then those salaries are taxed.

Taxation is not a one stop shop, d’ye see?

This is of grander importance than just some muttering over a particular takeover. There is a definite movement out there to restrict that tax deductibility of interest on these very taxation grounds. A movement which entirely ignores that the interest itself is taxable upon receipt - that is, the movement is ignoring the basic reality under discussion. Equally, we get complaints about how varied tech companies pay little corporation tax when they issue shares to the workforce. Which misses that the workers pay tax - at higher rates than corporation tax - upon the receipt of their shares.

Discussions about the tax system have to start from the clear and obvious basis that just because one horse on the merry go round isn’t writing a cheque for one specific tax that doesn’t mean that no one is writing a cheque under any tax. It’s an integrated system, taxing at many points, and all such points need to be considered.