Why is it apparently so difficult to get the big corporations to pay more tax?

HAMISH_MCTAVISH

ILW wrote: »

These companies do pay tax though, just not here.

Indeed.

They pay less tax elsewhere, so they are able to pay more in dividends to our pension funds, charge us less for their goods and services, etc.

In an ideal world they'd pay no tax at all. Because a tax on business is ultimately just a tax on shareholders (like our pension funds) and consumers. Which is why I say no business pays tax, they only collect tax from us all to give to governments.

Anyone that wants business to pay more tax is actually just wanting someone else to pay more tax. But they fail to realise that business taxes are a part of the price we all pay for goods. So an increase in business tax will ultimately end up being an increase in personal tax, as you are forced to pay more for everything you buy.

A concept otherwise known as......

TANSTAAFL

the_flying_pig

HAMISH_MCTAVISH wrote: »

Indeed.

They pay less tax elsewhere, so they are able to pay more in dividends to our pension funds, charge us less for their goods and services, etc.

In an ideal world they'd pay no tax at all. Because a tax on business is ultimately just a tax on shareholders (like our pension funds) and consumers. Which is why I say no business pays tax, they only collect tax from us all to give to governments.

Anyone that wants business to pay more tax is actually just wanting someone else to pay more tax. But they fail to realise that business taxes are a part of the price we all pay for goods. So an increase in business tax will ultimately end up being an increase in personal tax, as you are forced to pay more for everything you buy.

A concept otherwise known as......

TANSTAAFL

But, I mean, that's crap, basically. You're focusing on real but small second/third order effects rather than the really big direct impact. All forms of 'trickle down' are like this.

DervProf

The government make the tax rules, and know that people will exploit any loopholes. They know that big corporations will exploit these loopholes to the max. They also know that the average individual tax payer won't be happy about this. It's a balancing act. Close the loopholes, and big corporations might well not invest in the UK (although there might be a bit of bluffing going on when companies threaten to leave the UK if the rules are changed).

It's a bit like the government telling us all to stop smoking and drinking. They tell us, but hope that we won't.

ILW

DervProf wrote: »

The government make the tax rules, and know that people will exploit any loopholes. They know that big corporations will exploit these loopholes to the max. They also know that the average individual tax payer won't be happy about this. It's a balancing act. Close the loopholes, and big corporations might well not invest in the UK (although there might be a bit of bluffing going on when companies threaten to leave the UK if the rules are changed).

It's a bit like the government telling us all to stop smoking and drinking. They tell us, but hope that we won't.

These are not loopholes, just basic stuff about only being taxed on profits.

HAMISH_MCTAVISH

the_flying_pig wrote: »

But, I mean, that's crap, basically. You're focusing on real but small second/third order effects rather than the really big direct impact. All forms of 'trickle down' are like this.

Businesses can only pay tax from the income they receive from their customers.

The more they have to pay in tax, the more they have to charge their customers.

It really is that simple, piglet.

And its complete nonsense to think of corporations as some separate entity where if they pay less tax, the rest of us have to pay more. As corporations earn all of their money from customers, like you and me, then the more tax you charge them the more money they must charge us.

The only way for us to pay less, is for government to spend less, and therefore tax us less. Shifting that tax to companies instead of individuals does not result in consumers paying less money to government. We pay the same amount. Just through a different channel.

the_flying_pig

HAMISH_MCTAVISH wrote: »

Businesses can only pay tax from the income they receive from their customers.

The more they have to pay in tax, the more they have to charge their customers.

It really is that simple, piglet.

And its complete nonsense to think of corporations as some separate entity where if they pay less tax, the rest of us have to pay more. As corporations earn all of their money from customers, like you and me, then the more tax you charge them the more money they must charge us...

don't focus on the second order effect. the company pays some, the customers pay some. so it's better for the customer that the company is taxed than being taxed directly.

i'll give a simple example to illustrate this.

i set up a company selling, uh, shining people's shoes in the street. the only equipment i need for this business is an old rag that never wears out. my own time has no other use - either i shine shoes or i do nothing, getting no benefits etc.

if i charge £10 per shine, no-one will ask me to shine their shoes so i'll make no money. if i offer shines for free, 10 people will want me to shine their shoes... but i'll make no money obviously. if i charge £9 i'll sell 1 shine, £8 2 shines, ... £1 9 shines. this is a demand curve. what's the best price for me to charge? well a £9 price earns me £9, £8 price earns me £16, £7 price earns me £21, £6 price earns me £24, £5 price earns me £25, £4 price earns me £24... so £5 it is. this middling price is the sweet spot in the trade-off between high price/few sales & low price/many sales.

if government charges me a tax of £2 per shine, what's the best price for me to charge now? well, if i charge £9 i'll still sell [back to the demand curve] 1 shine, but only get to keep for myself £7. if i charge £8 i'll make (8-2)*2 = £12. if i charge £7 i'll make (7-2)*3 = £15. if i charge £6 i'll make (6-2)*4 = £16. if i charge £5 i'll make (5-2)*5=£15. so the best price for me to charge is now £6. it's not £7, i.e. £2 higher than the old price - i don't just automatically "pass through" the full £2 of tax - i can't, because i face, y'know, a demand curve. i pass through as much as i can but if i ramp my prices up to the full £7 i'll make a little less money than with the £6 price.

this is a very simple example but, well, it gives a very slight flavour of the impact of tax.

grizzly1911

Of course the likes of starschmuks will also argue that they pay employers NI and there employees also pay tax and NI providing they earn over the threshold - not part time probably. They also pay business rates and local suppliers.

They do only pay tax on profit of course not on turnover so they are merely making more profit not a loss. No doubt they would argue their return on capital would not justify the investment otherwise. We could of course simply charge them a hefty license fee to operate here.

The trouble is they have probably knocked out a local cafe, by working their patch, who employed staff in the same way and paid his full proportion of UK tax.

Essentially they are sucking money out of the UK. Another hole in the leaky bucket and another reason why we are struggling to top the thing up.

Personally I couldn't give a flying fig if they didn't wish to operate in this country.

Of course there are many other brands that are doing the same and this organisation is just another one.

michaels

The_White_Horse wrote: »

probably a good part of it is that the big companies employee the best of the best to handle their tax and HMRC have all the lefty morons in their employee that the Big 4 would laugh at before showing them the door. Any accountant worth their salt works for an accountancy firm or industry. Those that can't hack it go to HMRC. Same with the GLS.

So TWH was at the march on Saturday.

Either he is suggesting public sector wages should increase to the level where they will attract the best thus standing right next to Jon Seratowa on the platform or he is suggesting that there is no point having any public sector employees - one of the few things the govt does in support 'property rights' allowing a capitalist society to operate, without which there would be anarchy in which case TWH would be on the march on Saturday with the anarchists smashing up Oxford street...which is it TWH?

Thrugelmir

ILW wrote: »

These companies do pay tax though, just not here.

Nor do "they" pay tax in the USA. So there's an increasing resentment towards a number of US Corporates.

ruggedtoast

Before Starbucks opened up, England was probably the worst country in the entire world in which to buy a cup of coffee.

Unless you were anywhere other than a reasonably high end restaurant if you ordered coffee you would invariably given a cup of cheap instant, or a weak bodiless cup of filtered that had probably gone round three times.

The closest most people got to actual coffee was in one of those pseudo Italian cafes you get at seaside resorts where they serve coffee in a glass with a wire holder.

This opinion has nothing to do with tax.