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Tories will only reduce public spending to levels seen in the 1990's, not 1930's! Watch

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    (Original post by Fullofsurprises)
    What exactly do you prove by stating that corporation tax is at a given level now? Eg, 10%?

    The argument is about where it should be, of course it's at a historic low now. The reason being that the big corporations have (with the non-conspiratorial and completely obvious connivance of global governments) found a way to systematically avoid paying it on a huge scale. Much of that 10% now comes from small companies who can't join the new economic order set by Davos and the New Right and sequester their massive tax bills in charming Luxembourg, Guernsey and the Grand Caymans.

    In fact, it's reasonable to claim that the purpose of small business now is to act as a stage prop to maintain the fiction that the HMRC 'go after' missing tax revenues. Hence why small business people all feel so persecuted.
    The tone of your post suggested the government is receiving zero or near zero corporation tax; that isn't true.

    It's possible all this corporation tax is being paid by small business. Let us see. The corporation tax take of £50bn corresponds to total taxable profits at the then-rate of 28% of £180bn. Corporate profits are on the order of 10% of revenue, so the total taxable revenue is on the order of £1tn - comparable to the total GDP.

    It is not plausible to me that all of this is coming from chip shops and plumbers.

    Second, you also said that the rich don't pay any income tax; the top 1% alone pay 30% of all income tax.
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    (Original post by Observatory)
    The tone of your post suggested the government is receiving zero or near zero corporation tax; that isn't true.

    It's possible all this corporation tax is being paid by small business. Let us see. The corporation tax take of £50bn corresponds to total taxable profits at the then-rate of 28% of £180bn. Corporate profits are on the order of 10% of revenue, so the total taxable revenue is on the order of £1tn - comparable to the total GDP.

    It is not plausible to me that all of this is coming from chip shops and plumbers.

    Second, you also said that the rich don't pay any income tax; the top 1% alone pay 30% of all income tax.
    Big corporate profits are systematically hidden from visibility now behind complex tax sheltering schemes like the ones using Ireland, Holland and Luxembourg. It is no longer possible from government figures alone to say how big corporate profits in the UK really are. This is by design, the neoliberal consensus has been to de-tax corporations. That doesn't make it right for the majority. The neoliberal consensus is about building the wealth of the already rich.

    Your last point refers to incomes, not wealth. The wealth of the very rich is the problem, but it is also the case that the incomes of the richest are largely hidden from tax, the 30% from 1% you mention is largely income tax on high salary earners who cannot escape from PAYE. Rich people systematically avoid income tax.
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    (Original post by Fullofsurprises)
    Big corporate profits are systematically hidden from visibility now behind complex tax sheltering schemes like the ones using Ireland, Holland and Luxembourg. It is no longer possible from government figures alone to say how big corporate profits in the UK really are. This is by design, the neoliberal consensus has been to de-tax corporations. That doesn't make it right for the majority. The neoliberal consensus is about building the wealth of the already rich.
    I am not saying that total corporate revenues are ~£1-2tn/year I am saying that is the implicit revenue base of what is currently being taxed. If you want to make the argument that corporations are actually making multiple times the total national income and somehow hiding it I don't know what to say.

    Tax optimisation by basing in Ireland, Holland, or Luxembourg is a result of the EU which is not an obviously right wing institution from where I am standing.

    Your last point refers to incomes, not wealth. The wealth of the very rich is the problem, but it is also the case that the incomes of the richest are largely hidden from tax, the 30% from 1% you mention is largely income tax on high salary earners. Rich people systematically avoid income tax.
    Once again you retreat not to a position that is strongly supported by evidence but to a position which is not and indeed can never be supported or contradicted by any evidence that exists. Maybe the rich are hiding out on the grassy knoll.
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    The tax chart is very interesting. One can clearly see a number of small, selective and rather pointless taxes. One can also see that income taxes are far too high relative to corporation and capital gains taxes and that's before we get to VAT and business rates which in my opinion should not exist.

    Opinions purely based on my ideal tax system of course.
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    (Original post by Fullofsurprises)
    Poll after poll shows that it's exactly the reverse - clear majorities of people support increased taxes on the rich, which is why even the Tories have been talking (talking more than actually doing anything!) about ending massive corporate tax avoidance.

    At the moment, the effective tax rate on the big corporations profits is basically nil, because most of them ship their profits to Luxembourg, where the tax system allows them to pay minimum rates. This was set up by Jean Claude Juncker, who is now EU Commission President. The Tories pretended to be against him whilst in reality enthusiastically supporting his zero-tax policy for large corporations.

    The gap in tax revenues caused by the "no taxes for big corporates and the rich" policy that has been running for about 25 years is approximately the same as the current government deficit, if you add in the amounts handed to banks to play the commodities markets with.
    The majority of people want other people to be taxed more. When people realise that they start falling into the reaches of "the rich who should be taxed" they will flip very quickly as say it's a disgrace.

    Taxing companies is a different matter and that isn't to do with higher taxes but with how complicated our tax system is and therefore it is possible to work loopholes to reduce their tax.

    The simple fact is there is never enough money to hand around. The reason the banks get handed money is because there is a belief that they are needed for the financial markets and the economy to continue to function. I don't think the banks are any more or any less deserving of money than those who sit around their entire lives waiting for government handouts while shouting about how they deserve it and the greedy **** don't deserve it :rolleyes:
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    (Original post by Rakas21)
    The tax chart is very interesting. One can clearly see a number of small, selective and rather pointless taxes. One can also see that income taxes are far too high relative to corporation and capital gains taxes and that's before we get to VAT and business rates which in my opinion should not exist.

    Opinions purely based on my ideal tax system of course.
    Even leaving aside the fact that corporation tax is double taxation since all corporate profits are ultimately private incomes, is it really surprising that corporation tax isn't higher than income tax + NI? Companies make much less profit than they pay out in wages.

    You're right there are a lot of small taxes that are more or less irrelevant in terms of revenue but most are primarily aimed at changing behaviour. Inheritance tax and, ironically, CGT could both go though.
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    (Original post by Observatory)
    Even leaving aside the fact that corporation tax is double taxation since all corporate profits are ultimately private incomes, is it really surprising that corporation tax isn't higher than income tax + NI? Companies make much less profit than they pay out in wages.

    You're right there are a lot of small taxes that are more or less irrelevant in terms of revenue but most are primarily aimed at changing behaviour. Inheritance tax and, ironically, CGT could both go though.
    It's more the degree that's suprising, income taxes making up 48% of government revenues versus 9% for corporation tax. Though i'm not calling for higher taxation, closing loopholes would be a better solution.

    I don't actually mind CGT and would probably find a way to merge inheritance tax. I was thinking more along the lines of insurance premium taxes, air passenger duty, petroleum revenue taxes (though many of these don't apply on new fields anymore anyway) and finally betting and gambling duties which are a blatant attack on one sector (plus the bankers bonus levy).
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    (Original post by Rakas21)
    It's more the degree that's suprising, income taxes making up 48% of government revenues versus 9% for corporation tax. Though i'm not calling for higher taxation, closing loopholes would be a better solution.
    As I outlined above I am not sure this is as much of a real problem as a perceived problem. The revenue base for that £50bn of corporation tax is already enormous. To hammer the point home, let's look at some examples:

    In 2013 Tesco had a £70bn revenue on which it made a £125m net profit, implying a corporation tax bill of about £35m. Its 600,000 employees meanwhile will have translated to a wage bill in the tens of billions.

    Amazon is one people complained about, yet Amazon's global net profit was just $750m in 2013, or 1% of revenue. How much of that in the UK specifically?

    Of course there are companies with greater marginal profits and there are also companies that are domiciled in the UK for tax optimisation reasons, "unfairly" funnelling disproportionate tax take to us instead of the other countries in which they operate. Banks stand out among these.

    This issue might be worth thinking about if we had a £2tn economy with a £0.1tn corporate tax base, but we have a £2tn economy with a £1.5tn corporate tax base. That's basically what you'd expect.

    I don't actually mind CGT and would probably find a way to merge inheritance tax. I was thinking more along the lines of insurance premium taxes, air passenger duty, petroleum revenue taxes (though many of these don't apply on new fields anymore anyway) and finally betting and gambling duties which are a blatant attack on one sector (plus the bankers bonus levy).
    These taxes are designed to reduce use of aircraft, petrol, etc. So would you abandon those policy aims? Not that I necessarily disagree with doing so, but that's why those taxes exist, not revenue.
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    (Original post by Observatory)
    As I outlined above I am not sure this is as much of a real problem as a perceived problem. The revenue base for that £50bn of corporation tax is already enormous. To hammer the point home, let's look at some examples:

    In 2013 Tesco had a £70bn revenue on which it made a £125m net profit, implying a corporation tax bill of about £35m. Its 600,000 employees meanwhile will have translated to a wage bill in the tens of billions.

    Amazon is one people complained about, yet Amazon's global net profit was just $750m in 2013, or 1% of revenue. How much of that in the UK specifically?

    Of course there are companies with greater marginal profits and there are also companies that are domiciled in the UK for tax optimisation reasons, "unfairly" funnelling disproportionate tax take to us instead of the other countries in which they operate. Banks stand out among these.

    This issue might be worth thinking about if we had a £2tn economy with a £0.1tn corporate tax base, but we have a £2tn economy with a £1.5tn corporate tax base. That's basically what you'd expect.

    These taxes are designed to reduce use of aircraft, petrol, etc. So would you abandon those policy aims? Not that I necessarily disagree with doing so, but that's why those taxes exist, not revenue.
    Well yeah, we should be encouraging jobs (even if these are in casinos), growth and consumption (even if its a plane ticket). If we want to tackle emissions then go down the route of a Carbon Tax or simply fund private sector development of technologies like electric cars.
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    (Original post by The_Mighty_Bush)
    No, it's simply a technology for facilitating exchange. "The value of a persons input" is subjective. We decide value.
    The value of money is also decided by us, we can choose to lessen its impact on resource distribution if we choose.
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    Watching the Sunday Politics today and Labour tried to make the claim again.. Andrew Neil pointed out that the government budget in the 1930's was ~£80bn versus over £700bn today.
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    The real joke is that the next Government can do all the austerity they like but it isn't going to make a difference to the economic output of the country because Europe is in crisis and it won't be long till the USA's money printing addiction causes a exodus of workers from the cities as a result of inflation.

    Considering we have the American Trans Pacific Partnership and the EU to bolster our economy these 2 trade treaties will be useless when both entities are in melt down.

    ITS NEVER GOING TO HAPPEN SO TAKE YOUR MEDS!

    Yes that is what everyone was chanting before the 2007/8 financial crisis.

    It wasn't long back when Max Kieser was talking about retail banks charging their customers for depositing funds due to the current deflation in the economy. This just indicates that banks do need our deposits because they get all their funding from their ability to print money. Also there has been a slow down in the profits of banks but that doesn't matter they can just put the money they owe their workers into a computer and print it out at the countries expense.

    This gets even funnier in a sick way by some right-wing Tory with no life experience yelling ..........

    "We need the Corporations"
    "You are anti business"
    "Labour caused the recession not the banks"
    "Its all the benefit scroungers fault".


    When this happens I can't help it just to feel sorry for the chump.

    Anyway where at this position where no one really knows how much Quantitative Easing the private banks are doing.

    What we do know is that our central bank is doing 375 Billion stimulus a year and its creating a whole host of side effects. It can create inflation or deflation.

    Inflation is caused when huge amounts of money and put into the commodities market like metals, foods and oil.

    Deflation can be caused when prices of commodities rise with inflation and cause corporations to cut the fat of their balance sheets like labour, products or excess capital which they need to cut. One good example of this would be the supermarket industry in UK. Companies like Aldi and Lidil have expanded while companies like Tesco & M&S have experienced huge losses due to their products being to expensive. This has led Tesco & M&S to streamline their balance sheets.

    AND HERE IS THE THING WHICH PEOPLE SHOULD BE AFRAID OF ......

    When you have deflation it makes the class of capital very uneasy because their asset prices are always declining year on year. This causes the politics of the right to justify monetary policy which will increase inflation at any cost. And there is a huge risk of hyper inflation.

    So to put it bluntly Austerity is not the answer. It will drag us down.
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    (Original post by Rakas21)
    Well yeah, we should be encouraging jobs (even if these are in casinos), growth and consumption (even if its a plane ticket). If we want to tackle emissions then go down the route of a Carbon Tax or simply fund private sector development of technologies like electric cars.
    Big corporations have no incentive to create jobs. If they can get cheap labour from overseas or a machine to do the work they will do it.

    In recessions the majority of corporations will horde their capital and decrease the job amount.

    The only way you can create jobs with our current level of technology and ideas is to socialize the workplace so a business runs on a plan of minimal profit and maximum jobs.

    In recessions social enterprise thrives because people realize that people need to spend money in order for an economy to work. There basically needs to be liquidity in a economy for it to work.

    Social enterprise is better because workers spend 99% of their wages while high paid shareholders and executives just put their money into a savings account.
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    (Original post by illegaltobepoor)
    The real joke is that the next Government can do all the austerity they like but it isn't going to make a difference to the economic output of the country because Europe is in crisis and it won't be long till the USA's money printing addiction causes a exodus of workers from the cities as a result of inflation.

    Considering we have the American Trans Pacific Partnership and the EU to bolster our economy these 2 trade treaties will be useless when both entities are in melt down.

    ITS NEVER GOING TO HAPPEN SO TAKE YOUR MEDS!

    Yes that is what everyone was chanting before the 2007/8 financial crisis.

    It wasn't long back when Max Kieser was talking about retail banks charging their customers for depositing funds due to the current deflation in the economy. This just indicates that banks do need our deposits because they get all their funding from their ability to print money. Also there has been a slow down in the profits of banks but that doesn't matter they can just put the money they owe their workers into a computer and print it out at the countries expense.

    This gets even funnier in a sick way by some right-wing Tory with no life experience yelling ..........

    "We need the Corporations"
    "You are anti business"
    "Labour caused the recession not the banks"
    "Its all the benefit scroungers fault".


    When this happens I can't help it just to feel sorry for the chump.

    Anyway where at this position where no one really knows how much Quantitative Easing the private banks are doing.

    What we do know is that our central bank is doing 375 Billion stimulus a year and its creating a whole host of side effects. It can create inflation or deflation.

    Inflation is caused when huge amounts of money and put into the commodities market like metals, foods and oil.

    Deflation can be caused when prices of commodities rise with inflation and cause corporations to cut the fat of their balance sheets like labour, products or excess capital which they need to cut. One good example of this would be the supermarket industry in UK. Companies like Aldi and Lidil have expanded while companies like Tesco & M&S have experienced huge losses due to their products being to expensive. This has led Tesco & M&S to streamline their balance sheets.

    AND HERE IS THE THING WHICH PEOPLE SHOULD BE AFRAID OF ......

    When you have deflation it makes the class of capital very uneasy because their asset prices are always declining year on year. This causes the politics of the right to justify monetary policy which will increase inflation at any cost. And there is a huge risk of hyper inflation.

    So to put it bluntly Austerity is not the answer. It will drag us down.
    I think you make some very good points about inflation and we would agree on quite a lot. However QE is only something that central banks can do. You are correct in that banks do increase the money supply by creating loans out of thin air i.e. it is backed by nothing.

    Also most of the credit expansion by banks has gone into mortgages and the financial sector rather than commodities. See this:

    Name:  Sectoral-Lending.png
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    This drives up asset prices and causes asset bubbles. This is one of the reasons that housing is so expensive in this country. The other main reason is lack of supply. It is also means that other parts of the economy get crowded out and we become very imbalanced towards housing and the financial sector.

    Other than some minor quibbles I agree with the main points of your post. Keep fighting the good fight.
 
 
 
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