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Wednesday, 31 August 2016

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As mentioned over at Guido, the only thing Apple did wrong was to shovel their profits via an Irish based Corp. Had they gone down the EU "Junker Approved" route of incorporating in Luxembourg this local difficulty would never have occurred.

Patience Wheatcroft was on the TV this morning, pontificating about Brexit. I wish someone would tell her that we didn't vote for Brexit, we voted for LEAVE. Leave means leaving the EU.

Apple, of course, pays enormous amounts of tax in every country they operate in. VAT etc.

The poor quality of our civil servants who are up against some of the sharpest brains education can produce and big business can purchase is a big problem. Not just in tax laws and regulations, but also in procurement of equipment and drafting of legislation that will actually work.

One traditional cause of this is at least recognised by the civil service, and they no longer favour recruiting Oxbridge "generalists" who think they can deploy their finely-honed intellects against any problem, no matter how technical and specialised. But there is also the issue of pay. Our brightest young people are not going to embark on a civil service career if they can earn multiples of a civil service salary working in the private sector. If they can save the tax-payer huge amounts, then they ought to be remunerated with almost-huge amounts.

Of course, many will claim that the EU alone has the clout to extract appropriate sums from multi-national corporations. Although this view is utter nonsense (look at their decisions to lend money to Greece, etc., and to import a "reserve army of labour" from totally unsuitable sources) I would expect this to be a frequent refrain from those who wanted to stay in the EU. That particular cure would quickly kill the patient.

If an individual nation state wishes to lower its corporation tax for all, that's a competitive act and should not be discouraged. Selecting one business to lower the tax rate for is protectionist, and should be discouraged.

If the EU remains unhindered by those nation states who bleat that their bloated, inefficient, public sectors can't survive without harmonized corporation tax, we would have competition between states in corporation tax rates, as we do with corporations, which is a good thing. That would oblige the states to improve their public sector productivity and efficiency.

But it's actually the nation states with bloated public sectors in the EU that are bullying the EU into tax harmonization - as they bullied the EU into stopping TTIP and preventing that nice Mr Juncker from enacting it.

And there's Whyaxe wanting yet more public sector bloat by increasing the do nothing civil servants wages. Where you gonna get the money from for that then, eh, with the printing presses at full steam, the deficit still at £70-80-ish billion, and taxes making our pips squeak?!

And notice Whyaxe's deciding he knows how to run an administrative operation or project better than the market, after a 40 year removal of that privilege on account of him and his type having totally failed to do it between 1945-1975!

That ilk will be telling us they know how to run mining, steel manufacturing, energy, schools, hospitals, etc, better than the market before you can say "Strike!"

SoD

Duffers this about the hatred that the EU has for tax competition. Whereby states compete for business by using a low tax environment to motive businesses to base within their territory. Left leaning mercantilist governments hate it and the opposite can be said for right leaning free market governments. Hence George Osborn's obsession with bringing down UK corporation tax rates. He was not all bad.

Brexit can now bring to the UK the benefits that Ireland had with it's low tax regime as the EU is now denying them that advantage and being out they cannot dictate to us. The EU is once again shooting itself in the foot. It's days are numbered I would venture to believe as trust in them has taken another knock.

On this one I agree with that paragon of good sense and finely honed argument (occasionally), SoD

"The EU is once again shooting itself in the foot." It does have the knack to reload, thankfully, and will soon finish itself off.

"ordering, the Irish government to raise 13 million euros in corporation tax"

B. BILLION Euros, not million. Millions to Apple is back-of-the-sofa change.

SoD:

I wouldn't increase pay for "do nothing civil servants". But I would increase it for those who are effective in getting tax out of the multinationals. That would pay their wages quite nicely, with some left over to remedy the evils that you allude to. If we have a civil service, let's have one fit for purpose.

My view that I can run some things better than the market is not a decision, it is an opinion grounded in long experience. But to blame me (as opposed to my ilk) for macro-economic problems before 1975 is perhaps a step too far.

Another quality Kipper-bumpkin snorts his way through a cock and bull story ...

http://www.telegraph.co.uk/news/2016/08/31/mayor-of-dover-caught-snorting-line-of-white-powder-off-a-toilet/

Quality public service, coming to a town near you.

SoD

Whyaxe - I would much rather the quality brains in any economy were in the part which adds value (the private sector) rather than the part which almost without exception subtrats value (the public sector.

Considering that even a relatively low tax environment like UK, Ireland or USA (considered to be so by idiots such as Richard Murphy et al) well over half of all GNP is disbursed by civil servants to other civil servants or trade unionists. It is axionmatic that well over half of this is wasted.

If that 25% of the economy remained in consumers' pockets they'd be 33% better off and well capable of affording health insurance, rent and to pay for their kids' education.

There'd be no customs and excise, no obesity tsar or cucumber police.

Every lawabiding citizen would own a firearm. And petrol would cost 50p a ltr.

Whisky would be free. And so would we.

Off-topic David (for now at any rate. Pretty soon you'll be hearing the guy's name and the duplicitous Kingdom of Saudi Arabia in a single breath, a single sentence)

27 minutes ago Bob Graham of the 9/11 Commission Report fame finished a news conference featured on C-Span.

The brown stuff is fixin' to hit the fan!

Like David, I'll not pretend to know much about international trade issues and will add issues of internal EU disputes. However, I do know that in the US, NAFTA and permanent normal trade status with China are all the American public will stand for at this time. They're why we're suffering the rise of economic populism on both the left and right.

Allister Heath's lament that "There is now almost zero hope of any real supply-side reform in the EU any time soon" is amusing. We've already run the experiment over here and it has failed spectacularly. Also, his flat tax idea is a misdirection. The trick isn't with tax rates so much as determining how much taxpaying entities should claim as profit.

And BTW, the idea BP has been mistreated by the US government is, to put it kindly, suspect: http://www.ibtimes.com/us-fossil-fuel-subsidies-increase-dramatically-despite-climate-change-pledge-2180918

https://www.c-span.org/video/?414563-1/former-senator-bob-graham-addresses-release-911-reports-28-pages

Cuffleyburgers:

I agree with the main thrust of your argument. We could certainly do with a far smaller civil service, but having one that can't do its job properly is the worst option. It's just waste. If we decide that we need to take some money from the private sector (in this case the international private sector) then we need to be in control of the situation, rather than having the really good lawyers and accountants running rings around HMG. Small is beautiful when it actually works.

Of course, we might want to tax multinationals at a relatively low rate, but my guess is that they can afford it better than most of us little folk.

How about we reduce corporation tax to zero and put the minimum wage up to £28k per annum?

And let people go out and choose their "Big 8" (the Liberty necessities without which harm will come to you) ...

Food
Clothing
Shelter
Health
Education
Energy
Information
Transport

... and privatize, charitize, mutualize, and not-for-profitize the entire public sector into a competitive market from which the people choose and buy. So that's the whole public sector no longer funded by the Treasury, but by the individual citizen choosing, voting with their cash, every day. You "voting and elections" lovers can't complain about that, can you?

Even the pols could have role, regulating it to make sure monopolies, closed shops, and restrictive practices don't build up, and ensuring the SLA's meet up with social standards.

The large corporates wouldn't mind because they pay bugger all corp tax anyway, and being mostly high tech companies they pay their employees on average more the £28k anyway. It would be neutral to them.

The SME's would suffer the £28k, but enjoy the "keep the profit" benefit, being, as they are, the only ones who pay corp tax. Neutral to them too.

The low income earners would enjoy the huge contribution they can make to society as a whole and themselves in particular by choosing the big 8 - many of which they have no choice over. Even the most feckless worker / producer might be the best buyer, but today their choosing talents are lost to society and their own self-improvement while Whitehall, the worst chooser of all, does it for them.

The public sector workers would become valued and loved again.

And the economy would become more productive and efficient because the competition would encourage better operational designs. So the deficit would disappear.

SoD

SoD:

It's certainly a seductive-looking option, but has anyone done the actual sums, or worked it out in more detail?

This is a genuine request for more info, rather than a rhetorical dismissal of your point.

As the posts are US-based SoD, I don't know whether either applies "precisely how you present it" but,

All the horseshit you keep presenting SoD deserves, something of a retort.

http://malcolmpollack.com/2014/02/27/the-minimum-wage-part-1/

http://malcolmpollack.com/2014/03/13/the-minimum-wage-part-2/

***

Go dJrunkers SoD.

SoD,

The idea of a Guaranteed Minimum Income also solves problems created by automation. Whyaxye's point becomes more important in that environment. Corporations are usually far ahead of regulators in areas like legal loopholes, externalizing costs, market manipulation using psychological and political techniques, technology (high frequency trading for example), and so on. If every citizen gets £28k, how much should a public legal or technology expert make?

Bob.

Goddam Sir your awareness of "Politicians" earns you a A from me. Or JK generally speaking.

Here's a better idea. Everyone decides for themselves how much money they need to live comfortably. They also decide what their fair contribution would be to the production of goods and services for the population at large. The government would select a leader who would establish a deputized pyramid of lieutenants whose job would be to make sure that all the money is printed and allocated in accordance with everyone's needs. It could work if everyone is honest, not too greedy, and willing to rat out those uncooperative individuals. Oh, and don't forget to turn in your guns and ammo at your corner collection warehouse.

A hunert bucks an hour (two hunert a ho) seems fair enough wouldn't you think Henry? David? Loz?

That would really depend on the quality of the ho. Also, I think an exception would be desirable for a decent physicist of a certain age -- say 3-4 hunert bucks/hr (depending on the frequency of his bathroom breaks).

If every citizen gets £28K, and half of them then decide to do nothing else (£28K being more or less the current median wage), where does the money come from?

And how long would it be before "every citizen" includes every waster who manages to get in a rubber dinghy, paddle 100 yards off the French coast, and then await rescue by the Royal Navy?

Lunacy.

"In the meantime, I really must get on with finishing my tax return!" Our host's tax return must be long and complicated?

SoD makes good points. I was only raising a question about how government will have to be structured. Guaranteed Minimum Income is going to happen. This morning I ran across this: http://www.ksl.com/?sid=41285748&nid=148&title=driverless-tractor-rolled-out-by-cache-county-robotics-company

I've also recently read that financial traders, lawyers, corporate HR workers and others are being replaced by robots. Advances in artificial intelligence will accelerate the trend. This will probably be the biggest change in advanced societies since the Industrial Revolution of the 18th century. There won't be work for everyone; at least not the type of work we recognize today.

We've tried "getting government out of the way" as Reagan liked to put it, and that eventually resulted in corporate lawlessness and the crash of 2007/2008, unacceptable wealth inequality, deteriorating infrastructure and a "race to the bottom" for labor and environmental costs. Establishing government that can competently oversee global corporations and distribute wealth productively is going to be necessary - and probably expensive.

Capitalism won't disappear. Small business will probably grow when more people can afford the option to start one. Central planning is a failed idea.

Andrew Duffin,

£28k is the median wage, but it is not the median income.

On top of your median £28k, you get health, education, social services, free museums, the Potato Council, etc., etc.

If the public sector was entirely privatized, mutualized, charitized, and not-for-profitized into a competitive market, the money saved would wipe out the need for corporation tax, and a great deal of income tax and other taxes.

Out of their £28k, working people would be expected to pay for their health, education of their kids, trips to museums, and membership fees for the Potato Council, and retirement funding.

The residual tax raised - the remnants of income tax on top earners, and VAT - pays for the police and armed forces.

There's a case for giving that tax back and letting people choose their security service and regiment to fund. That'd be fun, wouldn't it? Armchair generals like me would pontificate endlessly on the merits of the Israeli "Trophy" system retrofitted on a Challenger MBT vs. the latest ATGM technology, before choosing my defence spend.

SoD

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