Armchair politics


#2789

I’ve decided that Reese’s revolting peanut/chocolate confectionery would probably tick all 5 traffic light warning boxes in red but they don’t display them on their packaging & somehow don’t have to.


#2790

I agree with the principle, these companies need to be taxed more. And 10% of turnover may still not be enough. Ultimately the issue is that international companies, especially ones that are IP-heavy, were never considered when tax legislation was originally formed. That needs to be fixed.

My personal preference is simply not to allow any charge for use of IP, management charges or indeed any other kind of charge from overseas companies. Simple as that. There could be an overrider whereby the profit on this country could be reduced so that it’s equal to the company group profit percentage, so head office expenses do get spread out.


#2791

In fairness you might need to do that. But then it becomes complicated (which, basically, is the essence of tax in a nutshell). Presumably the company’s overall (‘group’) profit is calculated before tax. But can we really unpick that ? A company has to pay its staff but in the UK, for example, it also has to pay employer’s NI. Is that an allowable expense against its profit or is that a tax ? If the employees’ personal income tax is high then it will have to raise their pay so that they can afford to pay their taxes and still live a decent lifestyle. Who, in fact, is paying that tax ? The company might argue that it is. It will certainly have to pay taxes if it runs vehicles or buys property. You can see how countries might tinker with their tax channels to suit large multinationals and therefore to attract them to spend more there. I’m afraid, much though I don’t like it, tax fairness isn’t going to happen until international tax harmonisation has.

VB


#2792

Payroll taxes are easily dealt with, they are just an expense like rent and stuff. The point about looking at group profit is that charges like management or IP charges, which are typically levied from low/zero tax countries to high tax countries, cancel out. You are left with a picture of the overall profit of the group.

We need to stop the companies from moving costs, often imaginary ones, from low tax countries to high tax ones, which is how they reduce their overall tax charge.


#2793

It could equally be argued that they are not. ‘Rent and stuff’ end up in the free market economy. Taxes end up in the hands of the state. Whether income tax is low, so profits are larger and money goes to the state via corporation tax, or income tax is high, so profits are smaller and money goes to the state via income tax instead, is a bit arbitrary really. The ultimate question is how much money goes to the state, not what name we attach to it.

When it comes to moving costs I do take your point. One aspect of that boils down to whether we think IP should be worth anything. If it’s not (and it won’t be if we don’t allow it to be charged for) then will that stifle innovation ? There is also a discussion to be had, at least in the case of publicly traded companies, about whether the ‘best’ way to return their profits to the economy as a whole is via the government, in the form of taxes which it levies and then spends on ‘the public good’, or is via the shareholders, who might include pension funds, for example, but who might also include over-wealthy individuals. There doesn’t seem to be universal agreement on that one.

VB


#2794

It sounds a little like Eric Morecambe, playing all the right notes but not in the right order, must be a ball ache at times.

Remind me to remind you to write me a cheque :smiley:


#2795

I think that IP has a value, but that is taken into account with my system whereby the group net profit rate is used. Many companies exploit the system by charging much more than the IP cost, having transferred out to a low tax country. Then they have high deductions in the high tax countries, that bear no relation to the cost of developing the IP.

But I don’t buy the point that low tax, and implicitly giving the money to the wealthy, is a effective system for ensuring the societal good. There is no trickle-down. Tax may not all be well spent, but it is by far the best system we have, and it’s one that we can control to some extent through our vote.


#2796

One company I worked for produced drugs in the NE of England and the sale cost was £6 a ton, the drugs then went financially to a tax haven and suddenly they were £60,000 a ton and then sold for 6% profit in countries around the world by local companies. So the UK got a very, very small tax on it.

These businesses are complete bastards, because governments let them get away with it, as the businesses have lots of cash for solicitors and they bribe government officials.

10% is low enough for them to actually pay it, the real figure should be about 30%.


#2797

If they’re making the stuff for £6 a ton it can’t need much expertise. So they could do it anywhere. They only need to find one country in the world that’s prepared to let them do it and their business model will survive. I’m a bit surprised that they didn’t shift production to the tax haven and save themselves the bother of the shipping paperwork. A uniform tax regime across the whole world would fix it of course. But that’s not going to happen any time soon (likely any time at all TBH).

VB


#2798


#2799

Britain in a fuckin nutshell ^^^^^


#2800


#2801

Some means has to be found to discourage refugees attempting to land on the Kent coast. The home office envisages that an array of gargoyles might be effective.

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#2802


#2803

Swing and a miss there.


#2804

Interesting article on the rise of the alt right in Eastern Europe. It’s a long article, but lots to pick out related to Trumpism, etc. It’s also quite worrying.


#2805

That’s a great article. When I saw the length of it, I doubted that I would get to the end, but it was fascinating and full of frighteningly real insight.


#2806


#2807

That has just made my fucking day. Thank you :grin::+1:


#2808