Make big companies pay tax? A joke.

[Cormac]

They got regard, possibly a lot of friends, and their 15 minutes.
But no material or financial counterpart for their financial outlay and possible personal effort.

well, that wasn't the case in Rome, for example.

[Svartalf]

Evergetism was more of a Greek phenomenon, as I said when I edited my previous post.

[Cormac]

Evergetism was more of a Greek phenomenon, as I said when I edited my previous post.

Even in Greece though, it was primarily for the public acclaim. Public acclaim, of course, is a marvelous political tool.

Much like hospitality was and is.

Edited because my smartphone is a cunt.

[PsychoSerenity]

Back to the original topic, from an article in the guardian, a paper from the Tax Justice Network, if anyone has time to read it, apparently suggests a perfectly sensible alternative for taxing multinationals.

A new paper from the Tax Justice Network by Professor Sol Picciotto of Lancaster University suggests ditching the long-established "arm's-length principle" under which multinationals are allowed to treat subsidiaries in different companies as distinct firms, and pay tax accordingly.

"The present system treats transnational corporations [TNCs] as if they were loose collections of separate entities," he says in the study. "There is currently only weak co-ordination between tax authorities, and this 'separate entity' approach gives TNCs tremendous scope to shift profits around the globe."

The system was devised in the 1930s, when it was far simpler to discern which activities a firm was carrying out and where. Today, with supply chains strung across the globe, and company accounts including intangibles such as goodwill and intellectual property, it is much more difficult for tax authorities to apportion economic activities – and profits – to one jurisdiction or another.

With help from well-paid advisers, international companies use a network of "transfer payments" between subsidiaries. The UK arm of Starbucks, for example, pays hefty "royalties" to its operation in Luxembourg – a conveniently low-tax location – for use of the Starbucks brand. While this is completely legal, it is all but impossible for HM Revenue & Customs to establish whether such payments are being made at a fair price.

Picciotto argues instead that multinationals should be taxed "not according to the legal forms that their tax advisers create, but according to the genuine economic substance of what they do and where they do it".

He says tax authorities should insist on "unitary" accounts, showing a multinational's worldwide operations. They could then assess where their profits are really made, using three factors: the number of staff the company employs in each country; its fixed assets, such as factories and machines; and its sales. That would prevent large profits being attributed to, say, Luxembourg or Ireland if there is nothing there but a glitzy headquarters and a few staff. Use of this unitary approach has a colourful precedent: the US state of California used it for decades from the 1930s to prevent Hollywood film studios from routing profits through lower-tax Nevada.

[Cormac]

Back to the original topic, from an article in the guardian, a paper from the Tax Justice Network, if anyone has time to read it, apparently suggests a perfectly sensible alternative for taxing multinationals.

A new paper from the Tax Justice Network by Professor Sol Picciotto of Lancaster University suggests ditching the long-established "arm's-length principle" under which multinationals are allowed to treat subsidiaries in different companies as distinct firms, and pay tax accordingly.

"The present system treats transnational corporations [TNCs] as if they were loose collections of separate entities," he says in the study. "There is currently only weak co-ordination between tax authorities, and this 'separate entity' approach gives TNCs tremendous scope to shift profits around the globe."

The system was devised in the 1930s, when it was far simpler to discern which activities a firm was carrying out and where. Today, with supply chains strung across the globe, and company accounts including intangibles such as goodwill and intellectual property, it is much more difficult for tax authorities to apportion economic activities – and profits – to one jurisdiction or another.

With help from well-paid advisers, international companies use a network of "transfer payments" between subsidiaries. The UK arm of Starbucks, for example, pays hefty "royalties" to its operation in Luxembourg – a conveniently low-tax location – for use of the Starbucks brand. While this is completely legal, it is all but impossible for HM Revenue & Customs to establish whether such payments are being made at a fair price.

Picciotto argues instead that multinationals should be taxed "not according to the legal forms that their tax advisers create, but according to the genuine economic substance of what they do and where they do it".

He says tax authorities should insist on "unitary" accounts, showing a multinational's worldwide operations. They could then assess where their profits are really made, using three factors: the number of staff the company employs in each country; its fixed assets, such as factories and machines; and its sales. That would prevent large profits being attributed to, say, Luxembourg or Ireland if there is nothing there but a glitzy headquarters and a few staff. Use of this unitary approach has a colourful precedent: the US state of California used it for decades from the 1930s to prevent Hollywood film studios from routing profits through lower-tax Nevada.

What does "where profits are really made" mean?

This is as stupid a notion as the one which says that investors (capitalists), management and supply chain middle men contribute nothing, and that all value is added by the guys on the line.

[Cormac]

This will kill the golden goose of:

Salaries (corporate and income tax)
Local suppliers to these businesses (income tax, corporation tax, and vat)
Downstream distributors (income tax, corporation tax, and vat)


Yes, large proportions of revenue are reported elsewhere for tax purposes. But their presence creates large numbers of jobs, and contributes a large amount of tax to the state.

By pushing this agenda, the golden goose is endangered.

[pErvinalia]

You kind of answer your own question when you say "But their presence creates large numbers of jobs...". From that article Psychoserenity quoted, it seems that this is one of the criteria for determining the level/jurisdiction of tax.

[Seth]

Here's a direct question for you: Why should I labor and be taxed to pay for YOUR social welfare needs?

Think you can answer it directly?

No no no. You are welcome to your political opinions, and we will obviously never agree. The point isn't that I am left of centre and you are right of centre, it is that you claim that anything other than your view is Marxist, that any element of socialism in a society will inexorably lead to Marxism. Bollocks. Choosing a level of socialism is a deliberate and entirely sensible decision, not a devious plan by the Marxism Monster.

Wrong. Choosing a "level of Socialism" is exactly part of the Marxist dialectic, and once chosen, the progression of any socialist society to bankruptcy, chaos, anarchy and death is absolutely inevitable. This is because the fundamental precept of Socialism is that the individual "owes" something to the collective, and the collective gets to determine what the individual owes and what it will take to fulfill that presumptive obligation. Once that is set in motion the course to classical Marxism is set and inevitable because for that presumptive obligation to be imposed, those imposing the obligation (for their own benefit usually) have already determined that the most essential fundamental natural right of all, the right to exclusive ownership and use of private property, has already been discarded, and it's only a matter of time before the have-nots decide that the haves have "too much" and that's "unfair" to the have-nots and the property and labor of the haves (the productive class) is inevitably seized for the benefit of the have-nots (the dependent class). That's how Socialism always works, and why it's always Marxist in every respect. The fundamental presupposition that the individual is obliged to the collective for the division and dissemination of labor and property is what causes this, and that presupposition is antithetical to individual liberty.

On why social welfare, it is the mark of a humane society to support those on hard times.
The level of that support is variable across all societies, and you might argue that benefits are too high as many here in UK do, but the principle is key. When you Seth fall on hard times then I would hope your society would help. There will always be those who need help, no fault of their own, and I prefer a society where we all contribute in the good times and benefit in the bad.

Yes, it is and so do I. But the actual question, which you once again evade, is by what right or authority do you presume to expropriate MY labor and property to serve the needs of others against my will.

When people and society generally takes your viewpoint, that mine is mine and yours is yours and why should I pay for common good, THAT is likely more of a slippery slope to a larger extent than supposedly creeping socialism. Everything and anything common then becomes acceptable to challenge in terms of ... why should I pay for this? Your absolutist view conflicts with reality, even in the halcyon fantasy you imagine US history to have once been. Why does your money go on common defense when you personally don't have an Apache and some Marines to guard your home? If I don't ever use government funded service X or Y, why should I pay for it, even though at some point I might?

This is another classic example of Marxist thinking; that the collective is better at determining who ought to be entitled to the labor and property of the individual than the individual is.

And you also present a red herring fallacy because we're not discussing "the common good," we're discussing the redistribution of wealth from those who have it to those who do not (a clear Marxist principle) and not payment for services or goods, or the potential use of common property, services and goods, by the individual that imposes a voluntary burden of contribution of labor and property.

When we discuss roads and bridges and public buildings we are talking about "common property" not the "common good." You err when you conflate the two entirely different things. It is a "common good" for government to provide a military to protect the nation and each citizen benefits from the existence of that military coequally with every other citizen, and therefore (in the standard model) each citizen owes a proportionate share of the costs of providing that common property, just like funding a park or a highway.

The test is "what direct personal benefit does an individual enjoy from the expropriation of labor and property to fund common property?" In the case of the military, or a highway or a city hall, the answer is relatively obvious.

But what direct personal benefit do I receive from being forced to surrender my labor and/or property so that it can be directly (or indirectly) transferred to you? I can use a roadway or City Hall, I'm protected by the military and indeed the police and fire departments, but what direct personal benefit do I get by providing YOU with subsidized health care or welfare payments?

None, that's what. The best you can do to support your claim is provide some vague moral judgment that you would like to live in a society that helps the downtrodden. But so would I. The difference between a Libertarian and a Marxist is that the Marxist demands the surrender of an individual's labor and property to others with or without the consent of the taxed as supposed societal duty, while the Libertarian depends on the mature, adult, well-formed personality and the concomitant natural human traits of charity, sympathy, empathy, altruism and rational self-interest to persuade the individual to voluntarily donate to support the downtrodden.

Marxists use the Mace of State and its jackbooted thugs with machine guns to take by force, up to and including deadly force, what it deems is the obligation of the individual to the collective.

Libertarians respect the right of the individual to decide how, when, how much and to whom to dispose of their disposable income.

The former is Marxists slavery and tyranny, the latter is individual freedom and liberty.

Just depends on the type society you want to live in, I suppose.

I prefer a society that respects my right to determine who is worthy of my labor, property, largess, charity and altruism, and who isn't.

[ronmcd]

Wrong. Choosing a "level of Socialism" is exactly part of the Marxist dialectic, and once chosen, the progression of any socialist society to bankruptcy, chaos, anarchy and death is absolutely inevitable. This is because the fundamental precept of Socialism is that the individual "owes" something to the collective, and the collective gets to determine what the individual owes and what it will take to fulfill that presumptive obligation.

This is the root of this argument, that it is beyond the wit of man to artificially (if you like) implement a level of socialism or social democracy as it will "inevitably" lead to disaster. I have slightly more faith in humanity. The last century appear to have shown it is quite popular and successful, and does not in fact lead to disaster.

It's all slightly irrelevant anyway. The fact is that today and for many years this mix of capitalism and socialism you insist "inevitably" leads to anarchy and death has become the norm in democratic societies, and remains so. By contrast this utopian libertarian fantasy you (and apparently uniquely) the American right dream of doesn't exist. Anywhere. Why is that?

Is it because the dastardly Marxists are everywhere, subverting the righteous will of freedom loving people, preventing it happening?

Or is it because the people of western democracies do not want what you want?

[ronmcd]

I prefer a society that respects my right to determine who is worthy of my labor, property, largess, charity and altruism, and who isn't.

Thats what your society allows you now, your required contribution is minimal, and only a small limit on your fantasy of 100% freedom. My advice would be to campaign and get elected on that libertarian mandate, and try and persuade the people of your country you are right. Until then, your society appears to prefer you to contribute something in order to be a responsible citizen.

But be careful of genuinely believing the marxism monster is everywhere & out to get you, the danger is you end up hiding in a basement hoarding tinned goods, wearing a tin foil hat, and listening for the UN NWO stormtroopers on your doorstep. Or something.

[Cormac]

I prefer a society that respects my right to determine who is worthy of my labor, property, largess, charity and altruism, and who isn't.

Thats what your society allows you now, your required contribution is minimal, and only a small limit on your fantasy of 100% freedom. My advice would be to campaign and get elected on that libertarian mandate, and try and persuade the people of your country you are right. Until then, your society appears to prefer you to contribute something in order to be a responsible citizen.

But be careful of genuinely believing the marxism monster is everywhere & out to get you, the danger is you end up hiding in a basement hoarding tinned goods, wearing a tin foil hat, and listening for the UN NWO stormtroopers on your doorstep. Or something.

Well, in my monthly pay cheque, I find that I have paid 48% of my income in tax up to now. Following last week's budget, this is likely to be around 53%. In addition to that, we have a VAT rate of 21% (and it will rise again based on the budget just announced).

So, 74% of my income goes in direct taxation of one form or another. This leaves me with 26% of what I actually earned.

I see that 74% being severely mis-spent by a massively incompetent and wilfully delusional public service. I have direct insight because apart from being a citizen suffering at the hands of this profligate waste, my wife and sister are both public servants and I hear what goes on in terms of practice and procedures.

[ronmcd]

I prefer a society that respects my right to determine who is worthy of my labor, property, largess, charity and altruism, and who isn't.

Thats what your society allows you now, your required contribution is minimal, and only a small limit on your fantasy of 100% freedom. My advice would be to campaign and get elected on that libertarian mandate, and try and persuade the people of your country you are right. Until then, your society appears to prefer you to contribute something in order to be a responsible citizen.

But be careful of genuinely believing the marxism monster is everywhere & out to get you, the danger is you end up hiding in a basement hoarding tinned goods, wearing a tin foil hat, and listening for the UN NWO stormtroopers on your doorstep. Or something.

Well, in my monthly pay cheque, I find that I have paid 48% of my income in tax up to now. Following last week's budget, this is likely to be around 53%. In addition to that, we have a VAT rate of 21% (and it will rise again based on the budget just announced).

So, 74% of my income goes in direct taxation of one form or another. This leaves me with 26% of what I actually earned.

I see that 74% being severely mis-spent by a massively incompetent and wilfully delusional public service. I have direct insight because apart from being a citizen suffering at the hands of this profligate waste, my wife and sister are both public servants and I hear what goes on in terms of practice and procedures.

OK, so you are arguing that I have understated our contribution to society when I said "minimal" to Seth? Fine, that's a fair criticism. And the balance is different in different economies, Seth likely pays much less taxation as a % than I do in UK. But Seth thinks the existence of those public service jobs your wife and sister perform are Marxism (not just an element of socialism in a mixed economy). I suspect you dont agree. Your opinion of the balance of private and public may be different than mine, I dont know, but I guess it's not absolute. Seth's is.

[Seth]

Wrong. Choosing a "level of Socialism" is exactly part of the Marxist dialectic, and once chosen, the progression of any socialist society to bankruptcy, chaos, anarchy and death is absolutely inevitable. This is because the fundamental precept of Socialism is that the individual "owes" something to the collective, and the collective gets to determine what the individual owes and what it will take to fulfill that presumptive obligation.

This is the root of this argument, that it is beyond the wit of man to artificially (if you like) implement a level of socialism or social democracy as it will "inevitably" lead to disaster. I have slightly more faith in humanity. The last century appear to have shown it is quite popular and successful, and does not in fact lead to disaster.

And that explains the disaster going on in Greece, Spain, Portugal and which will spread to the rest of the EU how, exactly?

It's all slightly irrelevant anyway. The fact is that today and for many years this mix of capitalism and socialism you insist "inevitably" leads to anarchy and death has become the norm in democratic societies, and remains so. By contrast this utopian libertarian fantasy you (and apparently uniquely) the American right dream of doesn't exist. Anywhere. Why is that?

Because the dependent class now outnumber the productive class. It's the end-game we're seeing now.

Is it because the dastardly Marxists are everywhere, subverting the righteous will of freedom loving people, preventing it happening?

Yup.

Or is it because the people of western democracies do not want what you want?

Sadly, it's because the dependent class have been enslaved so thoroughly to the entitlement state worldwide that they no longer understand liberty or freedom, and willingly trade both for another hit from the Marxist crack pipe.

As I said, Socialism works fine for the dependent class so long as, and only so long as there is OPM (Other People's Money) or abundant natural resources available to fund the entitlement programs through taxation of the productive class or capitalist market exploitation of valuable natural resources.

So long as the nation is a net exporter of goods, services and natural resources (like Denmark) entitlement spending does not exceed what the government gets in revenues.

However, when government spending in all sectors exceeds the capacity of the productive class to produce taxable wealth, the long slide into dependent-class caused bankruptcy is inevitable because the dependent class will never willingly give up their entitlements so long as there is anyone in the economy who has more than they do. Only when the entire population is driven into penury through entitlement spending, and the productive class have given up being productive and decided to join the dependent class do the chickens come home to roost, as they did in the Soviet Union, which lasted as long as it did only because it could rape the resources of its satellite states and deliberately starve millions to death to reduce the need for food (as happened during the Holomodor in Ukraine, where Stalin expropriated the entire output of Ukraine's agricultural industry (primarily wheat) and took it to Russia, starving more than 12 million people to death in 1932.

Greece is headed down the same road with its liberal entitlement programs and huge public employment commitment, and so is Spain and Portugal. And if they go down, so will the rest of the EU, one by one, as the bailouts sap the treasuries of the other nations vainly trying to prop up entitlement culture after entitlement culture as the productive class is sucked dry through taxation.

Sooner or later, the entitlement culture of Marxism will destroy every nation that utilizes it because the proletarian working class is incapable of looking past its own selfish interests at the bigger picture. One day "the rich" will cease to exist or will flee, and the gravy train will come to a grinding halt as the wheels of the economy fall off, and then people will begin starving, and fighting to survive. It won't be pretty.

And it's ALL caused by the basic premise of Marxism that holds that the individual is the slave of the collective, combined with the asinine notion that government's primary duty is to provide largess to the dependent class at the expense of the productive class.

After a while, having bound the mouths of the kine that tread the grain, the kine drop dead and there is no more productive capacity, and the nation fails.

Only by supporting the productive class in their efforts to produce wealth can a nation survive for long, because it is the productive class that provides useful, paying work to the dependent class which allows them to exit the dependency culture and have a chance at financial success.

Governments create NOTHING, they create NO WEALTH AT ALL, they only consume some portion of the GDP of a nation, and the larger the entitlement state, the larger the portion of the GDP it consumes, until it's consuming more than 100 percent of the available capacity to create wealth and has to start borrowing from other nations to continue its social welfare entitlement programs as demanded by the dependent class, who, being in the majority, don't care if they burden the future with unpayable debt, so long as they get bread and circuses TODAY.

And that's the path to ruin that the EU, and indeed the US is well down today. It's GOING to collapse eventually, it just depends on when the OPM runs out or nations stop loaning to other nations because they have nothing left to loan.

It's as inevitable as entropy in every single Marxist entitlement state on earth, it's just a matter of how long it takes to suck the productive class dry and kill it off. After that, it's a very short road to destruction.

And all because the lazy louts in the dependent class are allowed to vote themselves largess out of the public treasury, precisely as Tytler predicted more than 200 years ago.

[Seth]

I think that people are being disingenuous in their interaction with Seth on his core point - which is that the concept of taking money from wealthier people and "transferring" it to poorer people iris a Marxist concept.

This seems to be a reasonable assertion to me, unless it can be pointed out that there are other societal roots for this concept.

It certainly seems to me to be a Marxist concept.

Which doesn't necessarily mean to say that this implies an inexorable momentum to full blown communism, (which is a different assertion that Seth makes).

It may perhaps be a socialist concept, but to call it Marxist is stretching the normal definition of Marxism well beyond its breaking point. Marxism goes well beyond the re-distribution of wealth via tax, and heads towards the nationalisation of the means of production and the abolition of private property. If Seth was attacking Marxism, properly defined, I would agree with him; it is an iniquitous, pernicious and dangerous model for society.

But Seth can relax; it was tried a few times, failed in the long run, and any real Marxists who remain are deluded fantasists...

The problem is that the best-intentioned of Socialist programs, being rooted in Marxism, inevitably turn to hard-line Marxism, and even Communism over time. Socialist regimes, having already drunk the "slave to the collective" Kool-Aid, inevitably begin stratifying society into the elite class, the productive class and the proletarian dependent class. The elite class (those in political and economic control) begin by feathering their own beds and then they pander to the dependent class's demands for support by sucking wealth from the productive class. As the productive class begins to bridle at being burdened with supporting the dependent class, the elite class begins extending regulatory control over the productive class to try and keep it producing golden eggs for the dependent class.

Sooner or later, however, the productive class gives up on trying to be productive and joins the dependent class. Take GM as an example. GM went into bankruptcy because it's business model and product lines were no longer competitive in the free market. This happened because GM was spending inordinate amounts of its income on appeasing the labor unions and workers rather than using the money to improve and expand their products. Unions killed GM. Then what happened? Rather than allowing GM to go through the bankruptcy process, which would have broken the union chokehold on the company and would have resulted in a new set of owners taking control of the facilities to produce automobiles, Obama, a Marxist Progressive, used the Mace of State and quite literally took control of the "means of production" of GM's product line. Then Obama, after defrauding the owners and wiping out their investment, turned over control of the company to his minions in the labor unions.

Sure, GM remains, on paper, a "private company," but in reality it's wholly a Marxist-acquired and operated "means of production" that differs from the pure Marx model only in the details of the paperwork.

And that's how modern Marxism works. It no longer needs to take actual ownership at the state socialism level, it only needs to configure the regulatory structure in such a way as to exercise effective plenary control over the means of production through regulation, law, market manipulation and the installation of puppet operators who are themselves Marxist minions.

So, you can call it Neo Marxism if you like because it's changed its tactics somewhat from Marx's original model, but the effect, and the intent, are precisely the same: eliminate capitalism and "private" ownership of the means of production and place that ownership in the hands of the working class (in this case through the expedient of labor unions) and then regulated it in such a way as to make it a defacto state-owned and operated industry.

[ronmcd]

Wrong. Choosing a "level of Socialism" is exactly part of the Marxist dialectic, and once chosen, the progression of any socialist society to bankruptcy, chaos, anarchy and death is absolutely inevitable. This is because the fundamental precept of Socialism is that the individual "owes" something to the collective, and the collective gets to determine what the individual owes and what it will take to fulfill that presumptive obligation.

This is the root of this argument, that it is beyond the wit of man to artificially (if you like) implement a level of socialism or social democracy as it will "inevitably" lead to disaster. I have slightly more faith in humanity. The last century appear to have shown it is quite popular and successful, and does not in fact lead to disaster.

And that explains the disaster going on in Greece, Spain, Portugal and which will spread to the rest of the EU how, exactly?

Nothing to do with the EU, it's the Euro currency you are talking about. Trying to shoehorn countries with economies which are too different into one currency isnt a great idea. But the problems in Greece went much further than than, structurally, and that was made worse by being in the Euro when they shouldnt have been (shouldnt have been allowed) and countries such as Spain are now feeling the effects of that Euro destabilisation. Spain werent in ANY trouble when the financial crash happened, they had low debt.

None of this is about marxism or socialism.