Mr Popodopolous Posted December 4, 2011 Report Share Posted December 4, 2011 It's a completely made up number based on nothing whatsoever. Tax avoidance doesn't cost anything at all. Every company has a duty to shareholders to get the best value for them. If it's cheaper to pay taxes in other countries they are perfectly entitled to do so. All those companies accused of tax avoidance pay UK tax on their UK earnings, to not do so would be illegal. They are under no obligation (not legal and not even moral) to pay UK taxes on their earnings elsewhere. If the UK wants more companies to be registered here it needs to give them reason to do so. Tax evasion is illegal and prosecutable, the argument that the government should collect taxes that are evaded is ridiculous because if they knew about it they'd be doing so wouldn't they? I'm aware of the difference between the two...Clearly Government would if they could but is it fair to cut corporation tax while at the same time cutting pension entitlements? If a party tries to sell that idea to the electorate, work cut out I'd have thought... To take a few examples: Germany charges around 30% (albeit as of 2009)- they're doing ok in general. Norway 28%- again, doing ok. Even if it may make economic sense, in a democracy it can be a very hard sell... I digress though. Are all the loopholes necessary or fair even? Again, all quite subjective I'd have thought. Probably a monetarist/more interventionist divide. Link to comment Share on other sites More sharing options...
Nibor Posted December 5, 2011 Report Share Posted December 5, 2011 I'm aware of the difference between the two...Clearly Government would if they could but is it fair to cut corporation tax while at the same time cutting pension entitlements? If a party tries to sell that idea to the electorate, work cut out I'd have thought... To take a few examples: Germany charges around 30% (albeit as of 2009)- they're doing ok in general. Norway 28%- again, doing ok. Even if it may make economic sense, in a democracy it can be a very hard sell... I digress though. Are all the loopholes necessary or fair even? Again, all quite subjective I'd have thought. Probably a monetarist/more interventionist divide. You can make a simple argument here that less developed economies have favourable tax rates to attract business so by paying tax into those economies wealth is spread more evenly. The argument that taxes should be paid in the UK is a nationalist one really. Bear in mind too that a lot of businesses that pay tax abroad have UK shareholders who benefit from that. It's a pretty shit argument to say that businesses should pay tax here so the government can fund unsustainable public sector pensions a bit longer. Link to comment Share on other sites More sharing options...
Red-Robbo Posted December 5, 2011 Report Share Posted December 5, 2011 You can make a simple argument here that less developed economies have favourable tax rates to attract business so by paying tax into those economies wealth is spread more evenly. The argument that taxes should be paid in the UK is a nationalist one really. Bear in mind too that a lot of businesses that pay tax abroad have UK shareholders who benefit from that. It's a pretty shit argument to say that businesses should pay tax here so the government can fund unsustainable public sector pensions a bit longer. Less developed economies like Monaco, Switzerland and the Cayman Islands, Nibor? Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted December 5, 2011 Report Share Posted December 5, 2011 You can make a simple argument here that less developed economies have favourable tax rates to attract business so by paying tax into those economies wealth is spread more evenly. The argument that taxes should be paid in the UK is a nationalist one really. Bear in mind too that a lot of businesses that pay tax abroad have UK shareholders who benefit from that. It's a pretty shit argument to say that businesses should pay tax here so the government can fund unsustainable public sector pensions a bit longer. Regards nationalist argument, well I'm not the most nationalistic person but yeah in times of hardship (and the nation faces times of hardship/austerity), perhaps companies should 'do their bit' more readily- at least at the present time. In WW2, there was the whole 'buy warbonds' thing- perhaps a similar spirit is necessary in these times. Didn't at all deny need for certain reforms, merely a more even spreading of cuts, increased taxes etc... Like I say though, basic point being- ok, here's an example a) Low paid dinner lady or hospital cleaner gets told "Well, your 'gold plated' pension is unaffordable- so it will be reduced in size, you will pay more and work longer." Fair enough, the finances are in a bad bad way. However, at the same time Government reduce corporation tax (1% per year of 1st term IIRC). Yet said Government obviously hope for their vote come 2015? Yeah, good luck with that... Less developed economies like Monaco, Switzerland and the Cayman Islands, Nibor? Monaco, Cayman Islands have far, far lower populations than the UK- odd comparison. Can be far more wealth spent on/spread across the population as a whole through this if the population is but a fraction of that here!! Switzerland population is admittedly only 1/9 of ours or thereabouts, but yeah all 3 have much going for them. Link to comment Share on other sites More sharing options...
Nibor Posted December 5, 2011 Report Share Posted December 5, 2011 Less developed economies like Monaco, Switzerland and the Cayman Islands, Nibor? Not the ones that were immediately leaping to mind for me Link to comment Share on other sites More sharing options...
Nibor Posted December 5, 2011 Report Share Posted December 5, 2011 Regards nationalist argument, well I'm not the most nationalistic person but yeah in times of hardship (and the nation faces times of hardship/austerity), perhaps companies should 'do their bit' more readily- at least at the present time. In WW2, there was the whole 'buy warbonds' thing- perhaps a similar spirit is necessary in these times. What do you think will happen to the FTSE if a number of the top 100 suddenly issue profits warnings because they're going to pay UK tax? I'd imagine the ensuing meltdown wiping value off the market and reducing the value of the pension funds invested in it would be an overall massive loss. Didn't at all deny need for certain reforms, merely a more even spreading of cuts, increased taxes etc... Like I say though, basic point being- ok, here's an example a) Low paid dinner lady or hospital cleaner gets told "Well, your 'gold plated' pension is unaffordable- so it will be reduced in size, you will pay more and work longer." Fair enough, the finances are in a bad bad way. However, at the same time Government reduce corporation tax (1% per year of 1st term IIRC). Yet said Government obviously hope for their vote come 2015? Yeah, good luck with that... The tax burden's already high enough to drive our best people away and make us look an unfavourable place to do business. It can't increase. As for a more even spreading of cuts... Firstly our total spend goes up year on year so cuts are a bit of a myth. Secondly, funding pensions by cutting elsewhere means we're spending proportionally more on them - what good reason is there for that? Your example's a little contrived I feel. Consider that the average cost of employment in the public sector is over £50k. (Simple maths here, £700bn divided by 7 million workers, assume 50% salary costs which is conservative). Maybe a dinner lady isn't a good representative example? Also, bear in mind that the effect on people varies according to their earnings, length of service etc. One of the key points in the report is about this. Link to comment Share on other sites More sharing options...
Fiale Posted December 5, 2011 Report Share Posted December 5, 2011 Regards nationalist argument, well I'm not the most nationalistic person but yeah in times of hardship (and the nation faces times of hardship/austerity), perhaps companies should 'do their bit' more readily- at least at the present time. In WW2, there was the whole 'buy warbonds' thing- perhaps a similar spirit is necessary in these times. Didn't at all deny need for certain reforms, merely a more even spreading of cuts, increased taxes etc... Like I say though, basic point being- ok, here's an example a) Low paid dinner lady or hospital cleaner gets told "Well, your 'gold plated' pension is unaffordable- so it will be reduced in size, you will pay more and work longer." Fair enough, the finances are in a bad bad way. However, at the same time Government reduce corporation tax (1% per year of 1st term IIRC). Yet said Government obviously hope for their vote come 2015? Yeah, good luck with that... Monaco, Cayman Islands have far, far lower populations than the UK- odd comparison. Can be far more wealth spent on/spread across the population as a whole through this if the population is but a fraction of that here!! Switzerland population is admittedly only 1/9 of ours or thereabouts, but yeah all 3 have much going for them. Would that not depend ? If reducing corporation Tax saw hundreds of companies relocating here and 100,000's jobs created then the Employers NI cont, workers NI, Workers Tax and 20% vat on almost everything they buy would offset it. What we really need is to stop stealing 60% of workers wages in the first place to fund whatever schemes the public sector has decided upon. Cut back the state and let people spend their hard earned cash on what they want. Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted December 5, 2011 Report Share Posted December 5, 2011 What do you think will happen to the FTSE if a number of the top 100 suddenly issue profits warnings because they're going to pay UK tax? I'd imagine the ensuing meltdown wiping value off the market and reducing the value of the pension funds invested in it would be an overall massive loss. Fair point, it's certainly a difficult balancing act and no mistake. It is a risk, but like I say difficult to sell. Pension funds of course are in decline already so how they'd cope with a massive hit, who knows. Taxation is certainly a thorny issue. The tax burden's already high enough to drive our best people away and make us look an unfavourable place to do business. It can't increase. As for a more even spreading of cuts... Firstly our total spend goes up year on year so cuts are a bit of a myth. Secondly, funding pensions by cutting elsewhere means we're spending proportionally more on them - what good reason is there for that? Your example's a little contrived I feel. Consider that the average cost of employment in the public sector is over £50k. (Simple maths here, £700bn divided by 7 million workers, assume 50% salary costs which is conservative). Maybe a dinner lady isn't a good representative example? Also, bear in mind that the effect on people varies according to their earnings, length of service etc. One of the key points in the report is about this. Tax burden is too high? Well maybe, but in some other nations from what I've read, rich have offered to pay more tax to help with the ongoing situation. Also, the idea of philanthropy from those who are mega rich is quite big in various places. Cuts as a myth? May well be, but then again it could depend whether said rises are at the very least in line with inflation. Net cut or cut overall? Cutting elsewhere? Depends on what is cut I suppose- e.g. if middle managers in NHS are reduced, there might be a little more for pensions spending if this was desired. Clearly demographics are key though. Yeah, not a superb example- was a little extreme but to illustrate the potential point and how it can be sold poltically I guess! Still, £50k as an average salary is shockingly high. Suggests that there are a great many who are overpaid in the public sector, dare say too many in it also. Thought it'd be decent enough wages but £50k on average... I suppose overall though, one conclusion to draw between how it is/ can be sold and the problems with regards demographics is the split between free market politics and democratic politics. Definite risk of disconnect between the two at present... Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted December 5, 2011 Report Share Posted December 5, 2011 Would that not depend ? If reducing corporation Tax saw hundreds of companies relocating here and 100,000's jobs created then the Employers NI cont, workers NI, Workers Tax and 20% vat on almost everything they buy would offset it. What we really need is to stop stealing 60% of workers wages in the first place to fund whatever schemes the public sector has decided upon. Cut back the state and let people spend their hard earned cash on what they want. Of course, but perhaps a matter of scale. What can work in Switzerland with a population of around 7.8m then it can be done. Here with a population of 60-70m (wiki says 62, read on other sites that it's approaching 70) may not work here. Depends on how many companies and jobs I suppose, a CBA into it would be interesting to see though... As for the smaller state thing- again, depends on what's cut back. I remember on a post once you provided an article about a town in India. A low tax paradise IIRC, and the types of consumer goods purchased were hailed. The town though lacked proper sewage facilities in part- can't remember the name of the town but I'm sure the article was about something along those lines. Link to comment Share on other sites More sharing options...
bucksred Posted December 8, 2011 Report Share Posted December 8, 2011 Fair point, it's certainly a difficult balancing act and no mistake. It is a risk, but like I say difficult to sell. Pension funds of course are in decline already so how they'd cope with a massive hit, who knows. Taxation is certainly a thorny issue. Tax burden is too high? Well maybe, but in some other nations from what I've read, rich have offered to pay more tax to help with the ongoing situation. Also, the idea of philanthropy from those who are mega rich is quite big in various places. Cuts as a myth? May well be, but then again it could depend whether said rises are at the very least in line with inflation. Net cut or cut overall? Cutting elsewhere? Depends on what is cut I suppose- e.g. if middle managers in NHS are reduced, there might be a little more for pensions spending if this was desired. Clearly demographics are key though. Yeah, not a superb example- was a little extreme but to illustrate the potential point and how it can be sold poltically I guess! Still, £50k as an average salary is shockingly high. Suggests that there are a great many who are overpaid in the public sector, dare say too many in it also. Thought it'd be decent enough wages but £50k on average... I suppose overall though, one conclusion to draw between how it is/ can be sold and the problems with regards demographics is the split between free market politics and democratic politics. Definite risk of disconnect between the two at present... There is another arguement here, as our business tax is higher than any number of growing economies: China, India, Brazil, South Africa, Turkey, guess where business will move to maximise profits. If said business moves out, how the hell do we create jobs? As it is companies all over Europe, North America & Japan are moving to the so called low cost countries, including the company I used to work for, and its cost about 350 out 900 European based jobs already, in this case jobs lost to the Phillipines. We have to create an environment in which business moves in and creates jobs, and try and get an even balance in taxation. The low cost countries dont give a **** about the workers, they just get the tax revernue in, and into their back pockets, and millions of workers get a wage in. Trust me Ive seen how badly workers get treated in places like Oman, British workers have got **** all squared to complain about, YET. Democratic politics moves far too slowly for the world of business, and factor in the inbuilt ineptitude, gutless oppurtunistic vote winning from our elected leaders, and the coalition nature of all European governments in particular and there is no way we can retain business confidence, look at the Euro crisis as a case in point, while Europes workers crash and burn due to the crisis, its God awful politicans fiddle and talk talk talk. Link to comment Share on other sites More sharing options...
Lita For Congo Posted December 8, 2011 Report Share Posted December 8, 2011 Yeah, not a superb example- was a little extreme but to illustrate the potential point and how it can be sold poltically I guess! Still, £50k as an average salary is shockingly high. Suggests that there are a great many who are overpaid in the public sector, dare say too many in it also. Thought it'd be decent enough wages but £50k on average... I suppose overall though, one conclusion to draw between how it is/ can be sold and the problems with regards demographics is the split between free market politics and democratic politics. Definite risk of disconnect between the two at present... My mate is 23 and he works in the public sector. He earns £30k a year plus huge bonuses and he works from home alot of the time. Hes given, say 80 hours to do powerpoint presentation which will take him half a day. He laughs about what hes doing for his money and it angers us that he is getting easy money while we are in the private sector, basically getting shat on. Just an example of the overinflated public sector. I dont know enough about it to enter the debate but from 'Joe Bloggs' point of view working in the private sector, examples like this will mean they gain very little support. Link to comment Share on other sites More sharing options...
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