Hazel Grove - General Political Discussion

[Howard]

The problem with big corporations is that they have far more money to pay very expensive tax consultants and accountants than governments ever will. These people are employed to do nothing else than look for loopholes and finance schemes for companies to maximise their profits. The fact is, they're all at it. It's not just Amazon, Google, Apple, Starbucks etc. IKEA have this image of being a pleasant, clean, family friendly Skandinavian icon. HOwever, they are essentially owned by a series of for-profit and not-for-profit shells and charitable institutes. From Wikipedia:

The net profit of IKEA Group (which does not include Inter IKEA systems) in fiscal year 2009 (after paying franchise fees to Inter IKEA systems) was €2.538 billion on sales of €21.846 billion. Because INGKA Holding is owned by the nonprofit INGKA Foundation, none of this profit is taxed. The foundation's nonprofit status also means that the Kamprad family cannot reap these profits directly, but the Kamprads do collect a portion of IKEA sales profits through the franchising relationship between INGKA Holding and Inter IKEA Systems.

You have vested interests in certain countries as they place a small tax on finances that go through them. Luxembourg is a good example, and Jean-Claude Junker (sp?) is now feeling the heat for it as he was its PM when these arrangements came about. Ireland is another although it's removing its "Apple Tax" in 2020. All countries in the world have the same problem. Apple, Microsoft and others have billions of dollars in cash that they feel they can't move back to the US as they will be taxed on it when it's transferred. If you finally take into account geographies such as the Cayman Islands, Panama, and the British Virgin Islands who live on the modern financial versions of the naval "flag of convenience" it's an intractable problem. Unless the whole world agrees (and when did that ever happen) someone will always work out a way of avoiding paying tax.

This is actually one of the benefits of being in a large organisation like the EU who are slowly getting around to looking at schemes which avoid tax. It's just a shame it has taken a financial crash for them to do so.

[andy+kirsty]

Simone - It’s an interesting one, I’m actually a card carrying party member. I do frequently find myself disagreeing with things, but feel it is better to try and change things from within than leave. I will be voting in May, I have voted in every election I have been eligible to do so in. As you say, it is pretty much all we can do. But how much of a hypocrite would I be if I didn't vote.

Boden / Duke – I agree, the grass is always greener. However, take the CEO of a multinational or FTSE 100 or a Banker. I think pretty much 90% of the population would agree that if their salary equates to £1million or more a year plus pension they are rich.

My argument isn’t that they pay more tax personally, but, their companies should and they should pay their workers more, who for example earn below the average wage ( I realise this will distort the average) enough to live.

I seem to be answering a lot of questions with mine being ignored.

So, what about taking tax out of international competition?

Does any one person need a personal fortune into the billions whilst people in our country are going hungry?

I don’t profess to have the answers, it’ll take a much greater mind than mine to work them out, but, I do have a sense of fairness, experience of the poverty that is stalking the country and a feeling that a few very rich people have made it much worse for the majority.

[Duke Fame]

It's interesting that people always believe that "the rich" are people who earn more than they do. For Andy, from what he has posted, it's people who earn "millions". For people who earn £25K ( the median salary/wage) it's people who earn £50K (witness the brouhaha over Child Benefit when people on these incomes were claiming they were part of the "squeezed middle", much to the derision of lower earners). People on the minimum wage look at people who earn £26K and think they are "richer" than them.

In world terms, of course, almost everyone in the UK is part of the "rich". I  remember reading a very interesting article in the Guardian just a few years ago when they said that if you live in the UK, have a salary of £30K and have a mortgage on a house, you are in the top 1% of the world's population.

It's a very good point, there seems to be a general feeling that we need more services to be paid for people who earn more than ourselves. It may have been a coincidence but when the last lot bought in their political time bomb of the 50pc tax in the last few weeks of their government, they set the level for the 50pc rate at that just above the salary for the PM. That feeling that someone else should pay goes right to the top!

[simonesaffron]

It is all political ideology versus reality and there only ever has been and only ever will be one winner in that debate.

If you are going to wait for 'sensible debate' as you call it, to be 'forthcoming' then you probably know from your own experience that you are going to be waiting around for a long time.

We can't fall into a depression because somebody has a hole in their shoe. You can always form your own political party or stand for somebody else's if you feel so strongly about those that have and those that have not. Whether politicians are the ones that create the society or it is somebody else altogether that society exists and evolves. It also has fundamentals that will never be changed. The only thing that hopefully will change is that the general condition/freedom/standard for all will improve. So if we look back twenty five years say, (those of us that can) are our lives better than they were then and by that I don't necessarily mean with things we own although that has to be factored in.   

We live in a democratic country and the only contribution that most of us have is a vote.

Initially we have two choices, to vote or not to. From your comments Andy I take it that you are not going to, which of course is your decision. I will be voting, it is just that I don't know who for yet. That's the real debate, there isn't anybody reconciled with your ideas that is standing.

It is also worth remembering that no matter who you vote for the government always seems to get in.           

[Bowden Guy]

It's interesting that people always believe that "the rich" are people who earn more than they do. For Andy, from what he has posted, it's people who earn "millions". For people who earn £25K ( the median salary/wage) it's people who earn £50K (witness the brouhaha over Child Benefit when people on these incomes were claiming they were part of the "squeezed middle", much to the derision of lower earners). People on the minimum wage look at people who earn £26K and think they are "richer" than them.

In world terms, of course, almost everyone in the UK is part of the "rich". I  remember reading a very interesting article in the Guardian just a few years ago when they said that if you live in the UK, have a salary of £30K and have a mortgage on a house, you are in the top 1% of the world's population.

[andy+kirsty]

The point I am making about an extreme high tax band is that people won't be going to work for just 1p for every £1, they will have earned many hundreds of thousands, maybe millions of pounds in that year and will have already and paid much lower tax on that.

With regards to Dukes comment about the living wage - to use your rather dodgy Tesco analogy, it again demonstrates a failure of the current business model and current common sense. Tesco, up until very recently, made massive profits, they *could* use these to pay a living wage and differentiate the lower pay bandings.

Is it nor more humane to effect the market so people are paid enough to live? The idea that by working harder you can earn your way to the top if flawed. I think there are many who work harder than I do and quite probably don't earn what I do, the marked distorts things, for instance why do we pay those who undertake child care so little when my child is the most valuable thing in the world to me - I could use the same example for elderly care.

In the UK we have developed, the catalyst being Thatchers de-industrialisation which continued under Labour, a low wage service led economy. Our jobs market only requires the skills of a primary school child for over a fifth of jobs available. This is unsustainable. This is what the market and current economic policy has done.

I understand the laffer curve side of your argument. I just don't think it can be simplified to that extent.

Perhaps, an this may be too much for the orthodoxies of the board to cope with, we need an international approach to tax and take it out of competition?

Does anyone believe that any one person needs a personal fortune into the Billions of pounds whilst there are people in the UK needing foodbanks?

[Duke Fame]

Boden guy - my original statement wasn't referring to ones personal tax bracket rather corporate tax. I believe corporations whose profits are in the billions should pay more, correction, pay what they owe.

In terms of personal tax I would like to see tax credits scrapped, indirect taxes scrapped and everyone paying some income tax, even  those on the lowest wages. This way everyone has a stake in the civic realm.

To achieve this everyone would have to be paid a living wage and income tax would have to be completely overhauled starting with a 2p rate right up to a 75p or even 99p rate for hose who are multi multi millionaires.

Does any one person need all that money?

Maybe we should tax wealth rather than income. I would welcome any sensible debate from any political party, it doesn't appear to be forthcoming.

The problem is that policywould be self-defeating. France tried it and they simply saw their top earners migrate to the UK and other economies. The point of tax is to raise money for the state services, not to penalise the ones who have worked hardest. Taxing the richest at 99pc will mean you simply lose the richest so if we force the richest 10% to go elsewhere, then you will need to raise that money (55% of the state's income) from the rest of us i.e. the poorest.

I agree with scrapping tax credits in an ideal world but whilst not ideal, they do sort of work. I'd also transfer council tax and rates to an income / sales tax.

Living wage? well, no, I disagree. You work to your lifestyle, if you don;t earn enough, you need to work harder or get better skills. Raising a min wage will simply create unemployment and inflation and the living wage will then not be enough to live on so the cycle begins. IF you pay the dullest job, say a local council worker £8 ph, then what do you pay the guys who currently earn between £6.50 & £8? IF I were a trolley collector at Tesco, I'd be moving jobs to work for the council at £8. So Tesco pay the trolley collector £8, they have to pay his supervisor more, £9 and then the checkout staff will want £10. Tescos then put £1 on the price of a loaf to pay for the increased cost and the council clerk finds the living wage isn't enough because the groceries have gone up.

The Corporate tax avoiders is far more complex that you are suggesting. Starbucks, Google, ebay etc didn't stop paying tax in 2010, it's been put on the agenda by the left-wing media. These guys didn't pay tax under the previous government and frankly smarter than any govt. Take ebay, 20 years ago, if you had a car to sell, you'd advertise in the local paper for £10 and that paper would charge you VAT at 17.5% and give it to the UK govt, it would also pay tax in the UK on it's profits.  Now, we don't advertise in the local paper, the local paper is replaced by a portal now based in Luxembourg, you pay the Luxembourg company to advertise,  you pay VAT at the local rate (10pc??) and their profits are paid in tax at the local rate (lower than the UK). Should the UK get the tax? I can't really make a case for it, the service reaches the UK but the transaction has not taken place here.

[Bowden Guy]

Andy, I'm not sure that your original post did, in fact, refer to corporate tax but, I can certainly agree that the very largest corporations need to pay more if, in fact, they are paying very little. However, I don't agree that we need to tax people more. Do you really think that anyone is going to work for 1p in the pound?

In my opinion, we need to start taking away some of those "entitlements"' like free travel for the over 60s and the winter fuel allowance, most of which are very recent and were funded, not by an increase in the national wealth, but by massive borrowing from a certain G Brown. Is this going to happen? Not in a million years.

You also make an excellent  point about ensuring that everyone should pay at least some tax.

[andy+kirsty]

Boden guy - my original statement wasn't referring to ones personal tax bracket rather corporate tax. I believe corporations whose profits are in the billions should pay more, correction, pay what they owe.

In terms of personal tax I would like to see tax credits scrapped, indirect taxes scrapped and everyone paying some income tax, even  those on the lowest wages. This way everyone has a stake in the civic realm.

To achieve this everyone would have to be paid a living wage and income tax would have to be completely overhauled starting with a 2p rate right up to a 75p or even 99p rate for hose who are multi multi millionaires.

Does any one person need all that money?

Maybe we should tax wealth rather than income. I would welcome any sensible debate from any political party, it doesn't appear to be forthcoming.

[Duke Fame]

'Nice to have' - it's a good phrase, and you can equally well apply it to keeping the money in your pocket rather than paying it to the government - that money is also 'nice to have'.

So as we are fortunate enough to live in a democracy, we have a choice of which of these 'nice-to-haves' we want most.  Do we want to live in a civilised environment, with libraries, and with parks that still have swings for the children, with care for the elderly which lasts for longer than 10 minutes per visit, being treated in A&E without waiting for hours on a trolley, having decent rail and bus services, having roads and pavements kept in good condition, where people are not so desperate that they have to resort to food banks?   Or are we going to give up and accept that even though we are one of the wealthiest countries in the world, these are luxuries that we can't afford?   

I know what I will choose.

Hmm, perhaps I didn't make myself clear or perhaps you purposely misunderstood.

Getting rid of the bloated bureaucracy that has grown in elements of local government will ensure local authorities can protect front-line services. Front line services are those that we expect the local authority to provide because of market failure. Now I'm sure we can point the finger at the  council where they have an ambassador for left - handed Japanese jellyfish (there you go Simone) or even the chronic over-staffing and vast swathes of useless middle-management or even, why not, the roles that are simply a political indulgence rather than a service that are necessary services to those who cannot pay themselves or, moreover, should not be expected to pay themselves.

It may be nice to have a cycling coordinator (I made that up as an example) and other such jobs but are they really necessary and surely better to save that money and allow the tax-payer to choose the things they like rather than give their money to the state and let it decide what is best for the individual.

[Bowden Guy]

So, you can choose between 55% and 100% of total income tax revenues for the "top 10%"'. What's it to be, Andy? Perhaps Dave would also like to contribute? (Doesn't hold breath.....)

[Bowden Guy]

Andy, thank you very much for not answering my question. The 10%\55% I referred to in my previous post does, of course, refer to PAYE earnings,  as you well know.

[Dave]

So far, the cuts have simply removed some of the fat within local authorities. The 'nice to have' services rather than essential services, there are still a lot of these 'nice to have' roles left.

I do however, believe that we should all be left with as much of our earnings in our pocket in order to do what we choose.

'Nice to have' - it's a good phrase, and you can equally well apply it to keeping the money in your pocket rather than paying it to the government - that money is also 'nice to have'.

So as we are fortunate enough to live in a democracy, we have a choice of which of these 'nice-to-haves' we want most.  Do we want to live in a civilised environment, with libraries, and with parks that still have swings for the children, with care for the elderly which lasts for longer than 10 minutes per visit, being treated in A&E without waiting for hours on a trolley, having decent rail and bus services, having roads and pavements kept in good condition, where people are not so desperate that they have to resort to food banks?   Or are we going to give up and accept that even though we are one of the wealthiest countries in the world, these are luxuries that we can't afford?   

I know what I will choose. 

[andy+kirsty]

Boden Guy - this sort of thing -

http://www.independent.co.uk/news/business/news/vodafones-84bn-tax-avoidance-bonanza-nothing-for-taxpayers-in-verizon-deal-while-bankers-share-500m-in-fees-8794169.html

or this

http://www.ibtimes.co.uk/uk-tax-gap-widens-austerity-lack-avoidance-law-1466606

Also, the top 10% or earners invariably don't pay through PAYE and so the chance of them paying 55% is slim, such as this 

http://www.thisismoney.co.uk/money/news/article-2089892/How-bosses-paid-tax-cleaners.html

To the others -

My partner was once in the upper, then very upper, tax bracket for a short while. I didn't begrudge it, it was a civic duty, much like any other civic duty. (Tax payer doesn't mind paying tax shock!!)

Sadly I don't think I will ever get the opportunity to pay so much tax, but, in my work I do see people really struggling with things, going to school hungry with holes in their shoes, living in high rent low quality housing with very little prospect of improvement, and often ask myself if this current system is working. I believe the answer is no.

Do I believe that the markets hold the answer, I know the answer is no.

Do I wan't the whole system overhauled so it is fairer to those who earn little and places a greater burden on massive corporations? Yes.

Do I trust any of the current political parties to do this? No.

Genuine question - what do you all think?

[simonesaffron]

Hold on yourself Andy,

You're completely wrong there.

I admit that in the past I may have blamed the; Rumanians, Irish, Indians, Welsh, Australians, Man City, Duke Fame, The Council, David Cameron, The Scottish Nationalists, Nick Clegg, Santa Claus, My login is Vendetta and that neighbour of mine that goes to work on a motor bike at 6am Monday to Friday.  But I HAVE NEVER blamed the BULGARIANS.   

That is a lie.