The idea of tax: Citizens of a country or community all benefit from shared services and infrastructure. They contribute to this with tax. Those with more money pay more, those with less, less or nothing at all. As with any communal project, people will rail against what the money is spent on. Some will be happy, some not. The idea for most people will be to benefit from the services and pay nothing towards them if possible. Most people don't have the wherewithal to implement this wish, so they pay up. The rich, on the other had, can do something about it and do. There are inevitably rules to decide your personal contribution. The rules are drafted by the powerful to ensure that those with means can still avoid paying tax - that's tax avoidance. Inevitably, some people will cheat and play outside the rules - that's tax evasion. There is a moral difference between the two positions, but it's slight. For me, finding cheats isn't really the story. Of course lots of people are cheating. For me the story is the realisation that the tax laws are deliberately set up to enable cheating. That's what tax havens are. Now imagine this: Imagine a game of football in which for three periods of 5 minutes per half the ref would turn his back on play and award no free kicks of any sort. The rules wouldn't change, but the conduct on the field would for those periods. Huge injustices would occur. Would you be angry at the conduct of the players who flouted the rules deliberately, or the football governing body who implemented the idea of ref-less match periods? That is essentially the situation you have regarding tax avoidance/evasion. The game is set up by the rich to benefit the rich.
just for the record i have zero problem with wealth. set up by the rich yip i agree with that. allowed by the rest of us. one person one vote. the old mushroom analogy comes to mind. kept in the dark and fed shit. maybe that's the difference with me. i can foresee a change coming up here despite every attempt. like the Icelandic;s a small nation can affect more balance.
Let's expand on this for a simple example, for a business taking at random. A London coffee shop has an annual turnover of £1m. It doesn't pay tax on that, obviously, as allowable business expenditure is deducted to arrive at a taxable income figure. For a singleton coffee house business, that is the end of the story. After deduction of staffing costs, stock purchase, capital allowances on machinery, etc, the taxable income may be on the order of £200-300K. That's the figure the coffee business pays UK tax on. For a coffee shop run by a multi-national, there may be further "allowable business expenditure", perhaps in the form of commission fees/managerial costs/increased cost of stock charged to the London coffee shop by the parent company in, say, Luxembourg. Those fees are deducted from the London shop's taxable income (down from say £300K all the way to maybe zip/nada). The fees become chargeable income in Luxembourg. If the rate of tax in Luxembourg is less than that of the UK, or if Luxembourg essentially bribes multi-nationals to set up shop there through tax "concessions", you can see why a multi-national company would want to do this. You can also see why this is unfair on London coffee shops which are not multi-national companies. You may even see why this whole thing is unfair to the Great British Public as a whole. Of course, maybe you can see nothing wrong with this and even, applaud the ingenuity behind it ... in which case, well, there isn't much to discuss.
The population of the British Virgin Islands is apparently 28'000. Do you seriously think that the world tax system should be organised for the benefit of a few people who choose to live on an island? Maybe St. Kilda should be set up as a tax haven. Is my heart supposed to bleed for a handful of Caribbean islanders (charming though I am sure they are) or for all the people abused, and ripped off by dictators the world over? If you got back the evaded/avoided tax from tax havens, you'd be able to support many island communities many times over. You haven't really thought this one through, have you Pete?
probably just opening it for discussion. i suppose the up shot to all this money being taken out of circulation reduces inflation and reduces the ability to spend money on shit we really don't need at the expense of the planet. the greens should love tax havens. :Hilarious::smileys:.
I think there is much that is wrong with this practice. But as Glidd has pointed out the rules are made by the rich for the benefit of the rich, or my "by elites, for elites". So what can we actually do about it ? After the MPs expenses scandal there was much outrage and changing of rules, but they are getting more now than they did then (apparently).
I agree with your sentiment but I also agree with Pete's statement of the objective facts, without endorsing the reality.
I can't agree with that.The law is the law is the law. You may think something's immoral,and I'd agree with you,but it's not against the LAW to avoid paying tax. A mechanic is entitled to claim tax relief on the money he spends on protective clothing: therefore he has avoided ,(quite legally),paying tax on that sum. However,if a mechanic buys new overalls from his mate who doesn't charge him the VAT then he has evaded paying tax.That's illegal,and it shouldn't matter whether its for a penny or a million quid,the law is the law. A very simple example and any accountant will advise that,but laws seem to be designed in order for the wealthy to circumvent vast amounts of tax,and thats immoral...legal,yes...immoral? possibly. Of course you could say that BBC turns and NHS executives claiming to be self-employed,(thus avoiding the normal employment taxes) is immoral,or the way that MP's employ and pay large sums of taxpayers money to relatives for dubious,"secretarial",services is immoral...or the huge range of allowances paid to senior public sector management,are immoral.Or vast amounts of public money goes to the owners of country houses,enabling them to live in a style they don't want to pay for themselves. All of the above will affect the amount of money available to pay for the NHS,or welfare,or whatever is your pet charity. Put your nose deep into any trough and you'll find immorality,but for the most part it's all "legal". If you don't like it,vote for a party that agrees with you and get them to change things...if you can find one. Good luck with that.
:Hilarious:. you need to put that telegraph down JV. we probably have more choice than you with a better chance of them getting representation through STV. its not my fault the opposition are visionless/pish and most are subservient to westminster. you know, the very place that has been complicate in this whole affair.
Laws are meant to enforce ideas of morality, equity, social fairness and to create a framework that prevents social disorder whilst encouraging social cohesiveness. To separate questions of morality/fairness etc from their closely -aligned legal counterparts is to begin to render the whole legal framework meaningless. There are broad principles that guide the calculation of taxation. They used to referred to as Gross Statutory Income, Net Statutory Income, Taxable Income, etc. These broadly describe taxable income as gross income (turnover) less necessary expenditure. Thus a tax driver doesn't pay tax on his fares, he pays tax on fares less business-use fuel, depreciation of capital asset (the taxi), etc. If you introduce a notional element- e.g., franchising fees from a foreign-based parent company - you are creating a taxation construct that may be logical and legal, but which is entirely fictional. You are not "avoiding tax" by getting tax relief on expenses that are necessary in order to run your business. However, by receiving tax relief on notional expenditure that have no real bearing on the generation of income - ie the business would continue with or without those notional expenses - you are subverting the entire fabric of a fair taxation system. Subversion can be immoral, iniquitous, unfair and destabilising for a society, whether or not the means of subversion are "legal".
The basic problem with taxation these days is not personal taxation. People are obsessed with this because they are obsessed with their standing relative to the wealthy: they have nicer cars and houses, better holidays, better meals. It's easy to focus on them. The real problem is corporate taxation. It's corporations that make the real money and little of it seems to be taxed. I have just read that corporate taxation in Germany is a miserable 3.8%. You wouldn't have massive budget deficits if corporations paid proper tax. It's just not right that a company like Apple can avoid paying billions of $ in tax because of the clever legal systems they use. How many holding companies of all stripes are there located in beneficial tax jurisdictions? Thousands upon thousands. And all to avoid putting money back into the community. That's the community that paid for the education of their employees, the transport networks that allow them to do business, etc. etc. Basically, populations are being screwed by companies. As the NHS needs to come up with $22bn of savings, you can't help thinking that none of this would be necessary at all if companies doing business in the UK paid their fair share of tax. One day people are going to realise this and start making a fuss. Perhaps this is kicking off now. The problem is worldwide, which is why the rich are just getting richer, the poor, poorer. It's not an inevitability - it's allowed to happen, encouraged even. And I am so sick of the argument (heard yet again on R4 yesterday) that you can't be tough on business or people because they will just relocate elsewhere. Let them go. If everyone behaved sensibly there would be nowhere for them to go.
In a global economy corporation tax seems to be no longer fit for purpose, maybe there should be some sort of tax based upon local revenue or sales, however it would require international agreement to make it stick. I think the current economic paradigm is coming to an end, I do not believe that debt can be rolled over indefinitely, and there is a dichotomy between those who are making a grab for all they can get whilst they still can and those who wish to transition to something more sustainable and avoid the breakdown of society as we know it. Historically have the elites ever given up their privileges voluntarily ?
Not to date. It has always involved invasion, or revolution. Or an FDR. I don't see a Franklin D Roosevelt in our future, not soon.
