Wednesday, Mar 18, 2009
...or the abnegation of responsibility
Guardian: The price of avoidance
"Like the credit boom, the tax-avoidance game represents the triumph of technical proficiency over social responsibility."
Posted by letthemfall @ 11:08 AM (568 views) Add Comment
12 Comments
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1. iguana said...
As I was saying yesterday.................
2. drewster said...
"... the Scotch whisky maker that magically turned Dutch by transferring its brands to low-tax Netherlands..."
How about making a low-tax Britain? Then these companies wouldn't need to emigrate. Last time I checked, the good people of the Netherlands still have healthcare, education, public transport, and all the things which we have come to expect from the state.
The current tax system was designed in a world before globalisation. It needs to be re-thought from the ground up if it is to work properly in the 21st century.
"Socially responsible companies find their "good" behaviour punished by being at a competitive disadvantage to more ruthless companies who price in their [tax] avoidance to the consumer."
Most companies don't care about social responsibility. Companies are psychopathic. Interesting documentary film here: The Corporation.
"However borderless a company, it still needs offices and factories, staff and public infrastructure."
So tax those things. Tax the land the offices and factories are built on. Tax the staff. Tax the shareholders' dividend income. In a world where profits can be shifted to the Cayman Islands or the Netherlands at the click of a mouse, it makes no sense trying to tax them. Instead tax the source (land, people, raw materials) and the destination (shareholders' dividends) of those profits.
3. drewster said...
Or tax the circulation of money through a Tobin tax.
4. stillthinking said...
This is a can of worms and is not solely about tax, the money stored in these havens is also ill-gotten, that the taxes haven't been paid is besides the point.
The reason why the UK is going to lose money is honouring defaults, and considering UK banks are in the process of writing off billion+ debts, one is reasonably entitled to look into where the money actually went. Obviously a lot of this loaned money was just pocketed while the ostensible business loan served as a front. Should a current debtor about to default, having hidden their money, choose to declare a certain level of income, a certain level of wealth, there is no evidence to suggest otherwise.
By removing the hiding places, not only will the UK government (amongst others) be able to possibly extract further taxes, but they will greatly enable the banks to -recover outstanding debts-. There is always an implication that the banks have "lost" money, but they haven't lost any money at all. The money is in somebodies account, and the debt backing that account is now picked up by the UK taxpayer.
There is an audit trail from accounts in debt to accounts in credit. At the moment these links are abstracted away by financial instruments, which provide anonymity.
Don't forget, if we have an outstanding debt of over a trillion, then somewhere somebody has a trillion. If they worked for that money, fine. If there was fraud, then the UK should claim those funds back and save the poor old taxpayer from a fleecing.
5. shipbuilder said...
Good points, drewster. One of the reasons why globalisation is 'good' - it allows corporations to shake off any final thoughts of responsibility to anyone but their shareholders, able to exploit global imbalances to the max for profit to the few. The free trade situation envisaged as beneficial to us all by Wealth of Nations should be re-written as Wealth of Corporations, where all the benefits of free trade go to company shareholders rather than the country where the corporation is based.
6. braindeed said...
So why does anyone pay any tax at all? We can either be 'liberal' or solvent. In some ways I welcome the way this meltdown has shone a light on these things - it may have to get a lot worse before the 'comfortable' become as downtrodden as the proles and decided to have a look at the proportionality of the tax burden paid by the sorts who can afford the crème de la crème of the tax 'advisors'.
.....but I shall'nt hold my breath.
7. drewster said...
Braindeed,
"So why does anyone pay any tax at all?"
I'm not opposing all tax; far from it. However corporation tax is a particularly difficult beast. If a company like Vodafone or Tesco claims to have made massive profits in low-tax countries while merely breaking even in the UK, how can the government prove otherwise? Fundamentally I'm not sure it really makes sense to tax company profits at all. Instead just tax the recipients of those profits - the shareholders, the directors, the staff. (I admit it's not something I've given much thought to, feel free to point out the flaws in my logic.)
8. braindeed said...
The logic behind my statement goes thus: If it is a ‘good’ thing to avoid taxes then it will be pursued by the most ‘clever’ – i.e. the ones who can afford the cleverest and most prestigious advisors. So therein lies the madness – it becomes a personal choice whether to pay taxes, because employing advisors removes people one step from the moral ‘choice’. It is beyond question that a good proportion of people will then choose not too pay their ‘fair’ share because a professional advised them so.
I had a spat with tetchieman a few days past, because I refused to comment on a particular anomaly that could he argued as ‘unfair’ or ‘immoral’. What was not understood by him (or not explained by me, perhaps) was that I strongly believe that you can argue every point and remove oneself from that moral imperative, and then nothing makes sense. It just seems so petty that the country is going to the dogs, and no-one can seem to sense the part their playing in it.
The sadness I feel when the most wealthy make moral judgements on less well off, whilst feeling comfortable with their own paid ‘tax advisors’ driving a coach and horses through the plans of whichever executive, just makes me want to weep.
And, you know, if a no tax environment were to be proposed,(i.e. anarchy) I could live with that, I’m strong and fit and hard enough to take care of myself – bring it on – but it’s the ‘I don’t want to pay a bean, and aren’t standards slipping – let’s blame every other f*c*er’ brigade, that make me want to throw up.
The unfettered ‘market’ has predictably revealed it’s most fatal flaws….. the price it pays for rescue, has to be a tighter moral imperative in the governance of the tax collection system – that means laws that uphold the ‘spirit’ of a tax law’s intent, and the disbarment of accountants who defile that same spirit.
9. shipbuilder said...
I think that the only argument to be made is one for fairer taxes - Land Value Tax is one, in my opinion, as it starts with the notion that you pay tax on what you did not earn and get to keep what you earned by your own efforts. The argument against tax always fails to take into account the 'unseen' benefits that tax pays for - a relatively safe society, enough equality that the rich do not need to live in gated communities, things that are argued as being the 'trickle down' benefits of capitalism, yet are actually paid for by tax.
Generally the problem I have with the right wing argument is that it is in favour of lower taxes, more privatisation, yet where one would expect the argument also to be made for fair wages to pay for the privatised services and therefore promote the social well-being that is expected, instead cheaper labour is sought and the social calm to be enforced by draconian law enforcement.
10. shipbuilder said...
The thing is, if we want the ordered society that allows business to flourish, that allows people to have fulfilled their basic needs and so go looking for 'luxury' items, it needs to be paid for - so we pay taxes to allow that greater equality, pay the wages that allow that equality (and also maximise employment, not just lay off people when profits dip) or we allow the inequality to exist and compensate for it with a police state, which still has to be paid for. We can't have everything.
11. braindeed said...
http://www.godlikeproductions.com/forum1/message751413/pg1 ......seems others agree with my views
12. letthemfall said...
shipbuilder
And another problem with the right wing method is that it has been thoroughly tested in this country since 1979. We now see the consequences.