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

CLAPTON

Loughton_Monkey wrote: »

The ultimate solution is firstly to spend far, far, less from taxation, and then lower corporation tax to the point where multinational corporations will happily pay it. 10% of £1bn is much more than 24% of sod all.

why 'ultimate solution' to spend less?
If spending less and taxing less is a good thing then why not right now?



also worth thinking about why it may be financially advantageous for a small country with few home businesses may find it worthwhile to offer low corporation tax (and attract half the world's international companies) whilst large countries with large home grown companies may find the mathematics more difficult.

Loughton_Monkey

the_flying_pig wrote: »

..... If, say, £60m is taken from business and used to give everyone in the UK a gift of £1 each then this makes the overwhelming majority better off...

So well off, in fact, I'd celebrate with half an espresso.....

But I don't know where you're taking the debate. Yes, 'people' are shareholders of Starbucks. Those 'people' would like to think that Starbucks maximise their profits - and if this involves legitimately laundering profits from UK to Switzerland then so be it.

So if (as I think you are suggesting) you found some way to force extra tax upon Starbucks, then Hamish is quite right in suggesting that this can ultimately come only from higher prices or lower shareholder value.

To assume shareholders are 'wealthy' is a bit outdated. The vast majority of shareholders are institutions investing for funds. Your low paid shelf-stacker could proportionally be just as affected as Donald Trump [albeit without such an 'affected' hairstyle]

chewmylegoff

Loughton_Monkey wrote: »

It is difficult to disagree with most of this. In simple terms, you are saying:

High public spending = high tax rates
High tax rates = high tax avoidance by foreign companies able to do so.

But your very last observation doesn't hold water. In fact Starbucks existence in UK means jobs with taxable wages, and VAT, so some UK tax is paid, lowering the total tax bill on everyone else - albeit by just a smidgeon.

To be more accurate, though, one could argue that were Starbucks not in UK, the Costa (British Owned) might be selling twice as much and paying oodles more tax.

Starbucks are making profits somewhere. They are simply using legitimate and easy tecniques to ensure that those profits drop in more favourable tax regimes. Why does Switzerland continue to be an hugely economically successful country, despite its small size, I wonder?

The ultimate solution is firstly to spend far, far, less from taxation, and then lower corporation tax to the point where multinational corporations will happily pay it. 10% of £1bn is much more than 24% of sod all.

I think one of the main issues for US companies with overseas subsidiaries is that they have to pay tax on dividends they receive from those subsidiary companies (the uk does not tax the repatriation of profits in this way). So, if you're a US hqed corporate with earnings in a UK company you're best off using transfer pricing strategies to turn that into the profit of the US parent company and just have it taxed once, rather than submitting to UK corporation tax and then paying US corporate taxes when you repatriate the taxed profit.

Hence even if the UK tax rate was 1% they here would be no advantage to having the profits taxed in the UK if you are able to choose not to.

HAMISH_MCTAVISH

Loughton_Monkey wrote: »

To assume shareholders are 'wealthy' is a bit outdated. The vast majority of shareholders are institutions investing for funds. Your low paid shelf-stacker could proportionally be just as affected as Donald Trump [albeit without such an 'affected' hairstyle]

And this is the key thing.

Corporations are increasingly owned by everyone, not just some wealthy elite.

There is no "them and us", there is only "us and us".

Asking for corporates to be taxed more, is like asking for your pension fund to be taxed more. Or your shares ISA to be taxed more.

And with the new pension rules in place, this will increasingly become the case. Everyone that works will have a private pension, and the vast majority of those funds will be invested in corporations.

So by advocating higher corporation tax, You are basically saying, "I want to pay more tax, and a higher price for my goods and services".

Which is of course, completely daft.

.

The_White_Horse

anyone, personal or corporate, who pays less tax legally - good luck to them. just cut spending accordingly.

if people want that level of spending, they will pay the tax. if they don't. they won't.

CUT SPENDING.

grizzly1911

HAMISH_MCTAVISH wrote: »

And with the new pension rules in place, this will increasingly become the case. Everyone that works will have a private pension, and the vast majority of those funds will be invested in corporations.

So by advocating higher corporation tax, You are basically saying, "I want to pay more tax, and a higher price for my goods and services".

Which is of course, completely daft.

.

Everyone that works will be enrolled in a pension but we are yet to see the level of opt out which will no doubt be high wit those in low pay.

Many people aren't in pensions at all and subsist on the state.

I would be happy for Starbucks to put up the price of their coffee or cease trading in sites where their investment didn't justify it so that they can pay all the taxes.

It is a luxury item if you want to pay that new price that is up to the consumer.They already charge a premium which people are prepared to pay even though it is essentially just coffee that costs a few pence top produce. If they decide they don't want to operate here I am sure that can be replaced locally if there is a demand.

I accept that private/public all are all intertwined by the way.

ReadingTim

It's difficult because these "big corporations" are acting entirely legally and in the best interests of their shareholders.

the_flying_pig

HAMISH_MCTAVISH wrote: »

And this is the key thing.

Corporations are increasingly owned by everyone, not just some wealthy elite.

There is no "them and us", there is only "us and us".

Asking for corporates to be taxed more, is like asking for your pension fund to be taxed more. Or your shares ISA to be taxed more.

And with the new pension rules in place, this will increasingly become the case. Everyone that works will have a private pension, and the vast majority of those funds will be invested in corporations.

So by advocating higher corporation tax, You are basically saying, "I want to pay more tax, and a higher price for my goods and services".

Which is of course, completely daft.

.

as per my post above, stock ownership is more unequal than income.

this means that, as a general rule of thumb, raising say £500m through a tax on company profits will tend to hit low & middle income earners less than a £500m tax on wage income.

HAMISH_MCTAVISH

the_flying_pig wrote: »

as per my post above, stock ownership is more unequal than income.

this means that, as a general rule of thumb, raising say £500m through a tax on company profits will tend to hit low & middle income earners less than a £500m tax on wage income.

Wow.

Did you really just make that claim?

That, you know, a tax on income can't be targeted to hit high earners more than low and middle income earners?

Gosh, do u think it might be possible to, (I know, radical concept but just stay with me here), use an increasing tax bracket for higher income earners? Thus ensuring that "as a general rule of thumb" a tax on income hits higher earners more than low and middle earners.

Oh wait..... We already have that system.

Which makes your assertion all the more bizarre....

the_flying_pig

HAMISH_MCTAVISH wrote: »

Wow.

Did you really just make that claim?

That, you know, a tax on income can't be targeted to hit high earners more than low and middle income earners?

Gosh, do u think it might be possible to, (I know, radical concept but just stay with me here), use an increasing tax bracket for higher income earners? Thus ensuring that "as a general rule of thumb" a tax on income hits higher earners more than low and middle earners.

Oh wait..... We already have that system.

Which makes your assertion all the more bizarre....

i'm a bit fed up with 'debating' with you, TBH. given your seeming interest in the subject you should really get yourself a GCSE or even A level in economics. i doubt you'd find it too difficult - school exams really are aimed to allow everyone to pass these days. discussions with you have no structure, they flail around in these depressing circles.

it's a bog standard fact the world over that share ownership is very unequal, more so than, say, income. the most obvious example is that poorish [e.g. bottom quintile] people usually own no shares at all, directly or indirectly, but less commonly have no income. but it doesn't stop there. the fact that fairly large numbers of people own a very modest number of shares obviously, obviously, obviously does not mean that, to a man, taxing company profits in order to fund public services, or cut income taxes, or whatever, cannot be in their interests. if such a striking result were known to, for example, Scottish estate agents on internet message boards, then i think it's fair to say that it wouldn't have escaped wider attention.