UK Chancellor Confirms Introduction of 'Google Tax' 342
mrspoonsi sends this report from the BBC:
Companies that move their profits overseas to avoid tax will be subject to a "diverted profits tax" from April, the chancellor has said. In his final Budget before the election, George Osborne said firms that aid tax evasion will also face new penalties and criminal prosecutions. The so-called "Google Tax" is designed to discourage large companies diverting profits out of the the UK to avoid tax. "Let the message go out: this country's tolerance for those who will not pay their fair share of taxes has come to an end," Mr. Osborne said. In 2012 it emerged that internet giant Google avoided tax on £10bn UK revenue in 2011 by doubling the amount of money put into a shell company in Bermuda. Doing so helped it avoid £1bn in corporation tax. Under the new tax regime, companies with an annual turnover of £10m will have to tell HM Revenue & Customs (HMRC) if they think their company structure could make them liable for diverted profit tax. Once HMRC has assessed the structures, and decided how much profit has been artificially diverted from the UK, multinationals will have only 30 days to object to the 25% tax.
meanwhile (Score:5, Funny)
This is going to put many a libertarian in a hissy fit.
You know, your typical 100K/yr libertarian that has no chance of ever getting hit by a tax like this.
The typical libertarian who wants complete deregulation of *everything* but complains when Comcast is their only broadband choice.
Re:meanwhile (Score:4, Funny)
Look, I know libertarians will object to your comment, but I ask all of them to let the invisible hand do its work and correct you, rather than using their government regulation to down-mod you. Let's see that hand of the market make corrections!
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Regulations paid for and written by Comcast.
your hind sight is mistaken. (Score:2)
i think you are over glamorizing ma bell and not remembering clearly. there was almost zero innovation in the phone world while ma bell had everything. with the exception of the movement from rotary dial to touch tone dial... i can't think of anything.
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i think you are over glamorizing ma bell and not remembering clearly. there was almost zero innovation in the phone world while ma bell had everything.
On the other hand, everything just worked. When something broke you called repair service. They didn't try claiming that it was the long distance carrier's fault. They didn't threaten a huge fee if they came out and discovered the problem was in CPE. You didn't open your bill to find out that you'd been slammed and had a huge long distance bill from a company you'd never heard of. You didn't have to remember five digit access codes to select a long distance carrier.
Yes, the rates for Bell long distance h
Re:meanwhile (Score:5, Informative)
The typical libertarian who wants complete deregulation of *everything*
No, you've described an absolutist Libertarian. This is like saying the typical Socialist wants no privately owned possessions. The typical libertarian wants a lot less regulation than most developed countries have taken on.
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Meh, everyone loves to put nice labels on themselves and then try to dissociate from the bad aspects from them. Just like the "communists" who claim no country on earth is really communist. What China, Cuba and NK do is "just the opposite".
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The typical libertarian who wants complete deregulation of *everything*
No, you've described an absolutist Libertarian. This is like saying the typical Socialist wants no privately owned possessions.
Indeed. Appeal to extremes [logicallyfallacious.com] is a logical fallacy. Equating libertarians with anarchists, is as silly as saying that progressives are communists, or conservatives are fascists. If someone is for X, it does not follow that they are for an extreme form of X.
As a Libertarian, I think we should have less regulation than we have now. But I am in favor of regulations that reduce monopolies, and promote competition. I am also in favor of regulations that address market failures. For instance, the "free market"
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This is going to put many a libertarian in a hissy fit.
I'm pretty sure the right wing is called liberals and conservatives in Europe...
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No, in Europe liberalism tends to refer to social liberalism, not economic liberalism. Liberal policies tend to be centered around equality for every person, not around the american libertarian "just let the free market do it's thing". In general, their policies run completely orthogonally to being left/right wing.
You're right about the conservatives though.
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This is really kind of dangerous. It's a "we know it when we see it" kind of law. What if your company is HQ in Bermuda, and you operate an independent subsidiary in UK? How is this different from your company being HQ in the UK, yet purchasing services from a company in Bermuda?
The real problem is countries getting too greedy about profits all over the world, though. America wants to tax Apple for iTunes sales in Europe, and whines when Apple opens a European subsidiary that gets contracts and sells
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The typical libertarian who wants complete deregulation of *everything* but complains when Comcast is their only broadband choice.
Well, this is a UK law and I don't think we have Comcast here (unless some eejit has let them buy a stake in BT or Virgin Media).
Strangely, although the amount of regulation in the UK and EU is already enough to give a US libertarian complete apoplexy, we do mostly get something resembling choice when it comes to internet and phone service providers. Not brilliant, but the more I hear about the US mess, the more I appreciate what we have...
(Apologies to the good people of Kingston-on-Hull, of course).
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If Comcast is your only broadband choice (which, BTW, it almost certainly isn't, since there are usually DSL, satellite, and cell options) it is due to them having enjoyed a government-created monopoly.
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The typical libertarian who wants complete deregulation of *everything* but complains when Comcast is their only broadband choice.
If you're going to complain about Libertarians you need to at least pick a better example, ISP monopolies are very much a symptom of regulations.
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This is going to put many a libertarian in a hissy fit.
Why ? Allowing companies to exploit loopholes is not libertarianism.
There is one thing that regulators and libertarians have in common : they want everyone to play by the same rules. For libertarians, that's no rule at all, for regulators, that's unbreakable rules. Allowing loopholes is probably the last thing both camps want.
Re:meanwhile (Score:5, Insightful)
Really? And it's never because Comcast either bought the competition OR pushed them out of business out of unfair competition?
Never ever ever?
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Libertarians get upset about everything. This makes them pretty much everybody who perceives their ox is being gored, or their dogma run over.
I've never known small-'l' libertarians (like myself) to get upset over everything, nor anything practically approaching everything. What's actually happened and accumulated over the years is the discrediting and demonization of the one political philosophy that, if implemented, would prevent the US from inevitably collapsing under its own weight. That philosophy is "the government we need to protect civil rights and institute necessary regulations, but not more than that, and whenever possible actually u
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Re:meanwhile (Score:5, Insightful)
No, Libertarians piss off both the left and the right. That's how we know we are correct.
By that definition, Scientology and ISIS sure got everything right, too.
Re:meanwhile (Score:5, Informative)
You realize that almost always the reason there's only one cable company is because of regulation, don't you?
Not true. In a competitive market, costs tend to approach the marginal cost. That means that fixed costs (like the cost of trenching and laying cable) are sunk costs, and may not be recovered. So once one company has run cable into an area, there is little incentive for another company to do the same. Competition will just ensure they both lose. So cable service is a natural monopoly, where the first mover has a huge advantage.
An unregulated market will NOT fix this problem. It will make it worse, either through explicit or tacit collusion. One solution is to decrease the fixed cost, by trenching just once, and installing a wide, publicly owned, conduit. Then allow any bonded company to pull cable through the conduit. This can cost less than 1% of the cost or retrenching, and greatly reduce the barriers to entry.
It is very important to understand that an "unregulated" market, and a "competitive" market are not the same thing, and are often opposites. The government should promote competition, and sometimes that means more regulation, not less.
Re:meanwhile (Score:5, Insightful)
It is very important to understand that an "unregulated" market, and a "competitive" market are not the same thing, and are often opposites. The government should promote competition, and sometimes that means more regulation, not less.
The real problem is regulatory capture and the revolving door between the regulating agencies and the industries they're supposed to be overseeing. I think we need laws stating that anyone who has ever worked for an industry, and their immediate families and their known business associates, is not allowed to work in any capacity for a regulating agency, and vice-versa. The penalty should be ten years imprisonment with the general prison population, and the law should include a $50,000 bounty for the police officers, prosecutors, and any informants who successfully convict anyone guilty of this crime.
If that sounds harsh, consider the harshness of living under a government that no longer represents its people.
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That has its own set of consequences, though. Your rule would have the side-effect of guaranteeing that anyone working in the regulatory agency will be completely ignorant of how the industry they're regulating works.
Re:meanwhile (Score:4, Funny)
No change there, then.
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I think we need laws stating that anyone who has ever worked for an industry, and their immediate families and their known business associates, is not allowed to work in any capacity for a regulating agency, and vice-versa.
The downside to this idea is that you would be left with pretty much only two groups of people available for a regulatory agency: people who don't know anything about the field that the agency is responsible for, and new graduates whose only knowledge of the field is from their time in college. The FCC needs people with telecommunications knowledge, the EPA needs ecologists and chemists, etc. If you disallow anyone who has worked in the industry, you aren't left with much.
So what's the right answer? Damn
Re:meanwhile (Score:5, Interesting)
You realize that almost always the reason there's only one cable company is because of regulation, don't you?
That is not even close to true. Regulation is partly responsible for why there are so few companies laying wires, but lack of regulation is what is holding back more companies from selling services which use those wires.
The United States is almost the only country in the OECD which does not require the owners of broadband physical infrastructure to sell access to independent providers on a regulated wholesale market. This is almost the only reason our broadband speeds are so much worse and our costs are so much higher than other OECD countries. If we treated our broadband line like we do our telephone, electric, and gas lines, there would be plenty of competition. And using dozens of European countries as an example, the quality of our physical infrastructure would not suffer if this changed.
Local governments do enact regulations and fees which make building our physical infrastructure more expensive, but that would be even worse if the local governments didn't exist. Having to deal with hundreds of individual property owners per neighborhood instead of one local government per township would make it near impossible to build our infrastructure. We can at least try to reign in corrupt government.
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What happens is vacations, housing, and any number of other perks get thrown in under "business expenses". Conventions in Hawaii? Crashpads in 5 different cities? Expense it!
Re:meanwhile (Score:5, Funny)
Re:meanwhile (Score:4, Informative)
Can't do that in Australia as we have Fringe Benefits Tax. Anything, including business lunches or business cars parked at your private home are considered personal income and if paid by the business are taxed at very high rates.
Re:meanwhile (Score:5, Insightful)
A consumption tax is inherently regressive. Those with smaller incomes must use a larger proportion of it on consumption. The wealthy will spend a comparatively tiny fraction of their income on tax and continue to amass vast piles of money.
I'd prefer to see an approach where the corporate income tax is abolished and replaced by higher capital-gains and dividend taxes on the owners
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Consumption tax doesn't have to be regressive. Look into the FairTax plan. It provides each household a "prebate" on the taxes they will pay on their necessities each month.
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Nice theory. 'til the GOP gets into power and decides that anything but a box to live in is luxury and shouldn't be in this "prebate" thing.
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A consumption tax is inherently regressive.
Which is why if you were going to do something like that you'd need to make it a spending tax not a consumption tax. Buy groceries, taxed, buy stocks, taxed, buy clothing, taxed, buy plane trips to Aruba, taxed, buy medical care, taxed, buy rental properties, taxed, etc. etc. I still don't think it's a great idea but that at least fixes the regressive part.
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I dunno... it might work, if we taxed everything that was bought and sold, including stocks and other financial instruments, but you know that'll never happen.
Re:meanwhile (Score:4, Insightful)
BEcause it taxes the poor and middle class more at the expense of those who could afford it most. It is inherently wrong, morally and unjust.
Re:meanwhile (Score:5, Insightful)
Maybe in America, but here in Europe, tax is seen as the wheel to steer the ship of state, and social engineering is seen as important to maintaining a state in which the police do not shoot (many) people, and they don't (often) shoot back.
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Er, can you justify the notion that European tax policy has anything to do with police shootings? That sounds like bollocks to me. And I'm European. Fact is, all governments everywhere use tax to engage in social engineering with plenty of disastrous consequences ...
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I think the logic is more or less along the lines of: more taxes -> less poverty and income inequality -> less crime -> less police shootings.
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The dependence on campaign funding negates the idea that everybody has one vote and each vote is as important as the other.
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Re:meanwhile (Score:5, Informative)
Flat tax is a fail, consumption tax is a fail, not taxing inherited wealth is a fail. When you get drafted to protect their money, let me know how you feel in the trenches, and when you get out and can't find a job.
Perhaps your one of the many that believe you will be filthy rich someday so you dont want to be taxed. Good luck, go back and learn some math in school, because you forgot how to do percentage chances.
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You know..there aren't THAT many super wealthy in the world that this applies to...
What is wrong with inheritance? You think the family farm should not be able to be handed down from father to son, without taxing it into oblivion? This thing being abolished doesn't just hurt the rich like you wish it to...it hits the middle class too. Why should parents not be able to will their lives work, homes and all to their childre
Re: meanwhile (Score:3)
Of course you realize that over 99% of "family farms" are completely unaffected by estate taxes.
But please, continue pandering to the "good ol' fashioned hard workin American farmer." It plays well in the media.
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Well, you are right, that the true family farm is a fraction of the great thing it used to be, sadly.
But the idea is still the same....in broader terms, the family business.....and upon death, those are often taxed so badly that the offspring often have to sell the business as that they couldn't afford to pay the inheritance taxes on it to keep it and run it and keep it in the family.
We're talking small busin
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Because people who have no money and nothing to lose lob off your head and take yours.
Little hint before you reply: Policemen don't tend to be in the 1%.
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That's simply human nature. When you take away everything from me and the price to survive is your life, I'm willing to pay.
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Those with smaller incomes must use a larger proportion of it on consumption.
10% is 10% no matter what the purchase price is, the Proportions are the same.
The only way where they get out of balance is where corporations can purchase larger quantity and get a lower sale price per unit then the smaller consumer for a given item.. So you will not be removing the buying power element, but even then you are capturing the taxes and doing it based on money changing hands.
What they could do is like in some 3rd world countries where 'rich people' (usually foreigners) pay more when they go to the shops!
The 'white face tax' really does exist; I'd get my wife (a local) to go get prices then I'd go along to the shop for the same product and be asked 10x the price she was asked. (Then I'd set her on them and she'd tear them a new orifice where no orifice existed before.)
Re:meanwhile (Score:5, Insightful)
OK, I'll try to put this in simple terms and math for ya.
Let's assume you're making $1000/mo and you need $900 to live. If you pay a 10% tax, you're left with just $900, which means:
* barely affording enough to live, and most important:
* no money left for "consumption"
Which is bad, because that extra money is what drives tourism, hobbies, and all other sorts of activities you do to "enjoy your life". "Barely affording enough to live" is basically the same as communism.
Now let's take Mr. CEO making $1M/mo and needing $100K/mo to live. Take 10% off him and he still has $800K at the end of the month. Which he will, most likely, put in the bank (or stock market) for even more money (probably money they will loan to Average Joe who can't afford a new car).
You see: not everyone is equal. A wealthy person has *more* spending at the end of the month (bigger house, more power, employees), but still has money to spend. Barely Living Joe has much less spending, has to sacrifice a lot of luxuries. And yet, they both are paying "10% tax".
In other words: a flat tax "hurts" the poor much more than it hurts the rich.
A simple image to put it as an example: http://ctworkingmoms.com/wp-co... [ctworkingmoms.com]
Now, again, why do you want Average Joe to have more cash in hand at the end of the month? Because Average Joe is much more likely to *spend* that money, which drives the economy, rather that putting it in a bank.
Re:meanwhile (Score:5, Informative)
Simple:
there are MILLIONS of each Average Joe for every Mr. Rich CEO out there. And, combined, they will SPEND more money.
Is that a difficult concept to grasp? Give Average Joe more money to spend, and HE WILL SPEND IT. And look! It will end up in Mr. Rich CEO's bank account anyway! Because he'll be selling more.
The rest of your comment is just stupid rambling I won't bother addressing, because you're so incredibly dense, obtuse and unwilling to accept any idea other than your own.
Re:meanwhile (Score:4, Insightful)
For a more graphic example: What makes the economy "move" more?
1 million Average Joes buying a six pack?
or
1 Rich CEO buying a $50K Rolex?
Consider how many people you need to produce 6 million cans of beer, distribute them across the country, put them in shelves, sell them, etc.
And how many people are involved in IMPORTING one watch from England and putting it in a shelve, and selling it?
Are there more walmarts, or boutique stores that sell Rolexes?
Again, as I said, Mr. Rich CEO will, most likely, invest his money. The bulk of that money just goes into the ridiculous "full circle" financial system that allows DEBT to be considered an ASSET.
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Oh for goodness sake, this is economic illiteracy.
Sure, if you don't believe investment is actually a thing or that it helps build the economy, I can see why you think Mr Rich is useless and Joe Sixpack is the rock on which all success is built. Then it's just a small step towards thinking that as Mr Rich isn't usi
Re:meanwhile (Score:5, Insightful)
Again, the point of my original comment still stands: Slashdot Libertarians are defending the ultra-rich, as if they have any remote chance of becoming that rich.
It's just amazing.
Hey dude, wake up... the day you'll be as rich as Buffet you'll be able to skew laws in your favor anyway. Don't worry about that.
I don't know what's up with people defending the likes of Warren Buffet or any other guy who got rich by pure financial speculation. I'm not a marxist, and I have some money in investment funds. I just don't believe people who are that disgustingly rich should be given any mercy when it comes to taxing. They have all sorts of schemes NOT to pay taxes (like, precisely what this article says: sending their money abroad).
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It's consumption tax. I can have all the income i want and not pay taxes on it. I pay taxes only when i want to use the wealth I've accumulated.
If i want to pay less taxes then i spend less. If i want to live in luxuries then i pay more.
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So if I say "fuck you, America" and buy abroad, it's kinda like living tax free. yay!
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Then why have income tax? Then there should ONLY be a sales tax. However, what this opens up is exactly what is going on... Move money over seas where there is little to no regulation/tax and now you can operate virtually tax free. Foreign countries and the corporations win. Sounds like a bad idea to me.
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Agreed. Also it is too easy for businesses to avoid taxation, even after this change.
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Would be nice if we started taxing the supply side a little bit. If the recent economy situation showed us anything then that there's more than plenty of money available on the supply side, it's the demand side that can't fulfill its duty in our economy.
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WTF?
What kind of "Libertarians" do you know?
And what does the GOP have to do with anything in this context?
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Libertarians are all about themselves before everyone else.
No, you're confusing them with socialists. "You have stuff and I don't. Give it to me!"
Arbitrary (Score:2)
The arbitrary nature of this opens up a whole lot for corruption and mistakes. It would be much better if they can establish a
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hah, and "actual calculations" open the possibility of "creative accounting"...
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For public companies perhaps a flat corporate tax on market valuation...?
That's actually pretty clever.
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Everyone will take a piece of the pie... until there is no more pie.
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My curiosity is about how they will tell the difference between a company buying a widget, and a company moving money overseas. Maybe companies will start hiding the profit by selling paperclips to themselves...
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Q1: So, are you a tax dodger? (Score:2)
FTFS "companies with an annual turnover of £10m will have to tell HM Revenue & Customs (HMRC) if they think their company structure could make them liable for diverted profit tax"
If you're diverting tax, wouldn't you choose a loophole that doesn't trigger this? Your accountants are either complying with tax law or their breaking it. It's a bit like asking if you have any firearms or explosives in your carry on luggage - if you're doing it on purpose, you're not going to tell the screener.
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easiest way is to break the company into shells each making a max of 9,999,999 and not look back. at an added tax rate of 25% as the summary says it would be simple math to show that the added paper work for inter-company billing and accountants would be cheaper than paying the tax (especially if they automate it).
They need to move to a flat consumption tax for products and services, get rid of all theses random income crap and just keep it simple. When money changes hands, tax it.
So, dumb question(s)... (Score:5, Interesting)
But is the 25% tax lower than what they'd pay if they hadn't diverted profits? Equal? More?
To actually discourage diversion of profit, wouldn't the penalty have to be higher, or at least equal to, what they're avoiding?
And does anyone not think that this will lead to tech companies having field trips to Hollywood to learn their style of creative accounting?
Re:So, dumb question(s)... (Score:5, Informative)
Last year the rate they *would* have paid on those profits, if left in the UK, was 21%, so yes it's (somewhat) punitive.
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Corporation tax is typically 20% https://www.gov.uk/corporation-tax-rates/rates and so yes it is more than they would have had to pay.
and yes, this is a semi-futile move on behalf of the HMRC, because the bean counters have already worked out how to avoid it, but c'est la vie.
EU ambivalence toward taxes (Score:2)
On one hand, the EU wants to be more like the US: Create an EU internal market (http://en.wikipedia.org/wiki/Internal_market). Open the borders for trade and business. Let companies set up shop in a single EU state and sell to anyone in any other EU member state without having to do a mess of paperwork, currency conversions, or taxes (aside from VAT). On the other hand, some EU states see other EU states doing things to attract business, and they see their tax revenues going somewhere else, and they want
Re:EU ambivalence toward taxes (Score:4, Interesting)
Those things those other EU countries are doing to attract business are ILLEGAL under EU rules. The double Irish violates some pretty major EU rules and what Luxemburg was doing was grounds to throw them out of the EU.
What the EU has discovered is that a united monetary and economic union doesn't work when individual states get to set tax and spending policy. Something that people have been warning about since it was founded. Almost all the EU's fiscal problems can be tied to this problem. Greece violated EU rules (and lied about it) while spending far more than they were allowed to. Ireland allowed companies to setup business and declare themselves not tax resident anywhere. The overspending in Portugal, Spain, Ireland and others that caused the huge bailout and austerity was precisely because of this problem.
The funny thing is that none of the solutions they've taken are actually solutions. They are band-aids over the problem. Until the individual nations are willing to hand over some significant banking and monetary control to the EU they are going to continue to have these problems. A system where Greece can basically create debt for German citizens isn't a workable solution in the long run and you see the problems it creates right now, which is a deep resentment between member nations.
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Ireland kinda is our Bermuda. Nice taxes, crappy to live in, just the weather ain't so great.
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"He probably won't be able to enforce this rule in the long run and he knows it..."
If its put into law the companies will have no option but to pay up or close their UK operations.
Re:An election's coming, apparently (Score:5, Insightful)
He will do because its a big topic over here in the UK, and has been for a while.
Personally, I applaud Osborn for doing it - for once we aren't saying "hey, you know those rules we made for you to adhere to? Well, we have decided that there are these other 'rules' as well which we would like you to adhere to, and we will say nasty things about you if you don't. Are they legally binding I hear you ask? Well, no, but that won't stop us from thinking you should be restricted by our second set of 'rules'..."
Instead, we are actually getting something done about the rules under which companies should be paying tax. As a lot of people have said all along, fuck the spirit of the law, apply the actual law. If the law doesn't say what you want it to say, change it. Don't try and bully people into following your additional 'voluntary' rules which you want to make over and above the actual laws.
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He will do because its a big topic over here in the UK, and has been for a while.
He probably won't do, because the odds are very high that the Tories will be tossed out at this election. If you're going to elect a socialist government, you might as well vote for actual socialists.
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Labour were making the same noises about the same tax changes that Osborne just announced, so yes, it will happen.
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Osborn had to do something. The EU is moving to fix the problem and he doesn't like their solution, so this is an attempt to head them off. Plus the tabloids have been piling on the pressure. It's just before an election, he can make moves like this and then renege on them later, like they did before the Scottish independence vote. For anyone not keeping track, the first betrayal of that was about four hours after victory was declared.
The problem with budgets like this are that they are mostly electioneerin
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I would love to know what you think constitutes a betrayal after the Scottish independence vote...
Re:An election's coming, apparently (Score:4, Insightful)
I totally agree with you and you are absolutely wrong.
The "Google tax" law that Osbourne wants to enact appears to be little more than saying "any money stream we would like a piece of, we're gonna take". As far as I've been able to find out there really isn't much more to it than that. That's not a law, that's bringing back the reign of kings. It's been obvious for a long time now that the Tories have no coherent theory of how they want the global tax system to work. They just want more money.
It's not even clear why they need one. They already passed the General Anti Avoidance Rule (GAAR) which basically says "anything a reasonable person would find unreasonable is illegal", i.e. it suspends tax law entirely in the UK and replaces it with the whim of whoever is running the Revenue at the time. Given that they did the GAAR a few years ago already it seems they're implicitly agreeing that the arrangements of these companies is reasonable and legal but they want to undo it all the same.
The big problems this tax is going to run into are both legal and fundamental. The legal issues are that simply grabbing money in violation of the existing systems violates tax treaties. The UK is potentially setting itself up for a world of hurt if other countries decide it's now open season on British companies. Bear in mind the Tories have lowered corporation tax to attract companies from other countries to London. If, say, France, decides that a company is "diverting profits" out of France to the UK and pulls the same shit then the country could find itself ending up with less money than before, not more.
The second problem is that what it means to "divert profits" is left undefined. How do you carve up a company like Google across national borders? When someone clicks an ad in the UK, is that profit made in the UK because that's where the user is? Or California because that's where the ad system was developed? Or Germany because that's where the datacenter is? Or Ireland because that's where the sale was made and where the advertiser sent the money to and had the contract? Or all of them? Currently the system is it's Ireland because that's where the company with which the contract was signed is.
It gets even more convoluted. What if a British user never clicks ads and so is a net loss for the company. Do you then offset all those users against the revenue generating ones? How much does it even cost to serve the search result to a British user? They're using global, shared resources, so do you divide up the global costs by population? By usage? How do you even calculate profit by product when it's all integrated, let alone by country? And how do you stop the red tape required to calculate whatever arbitrary metrics are used from becoming overwhelming?
How will they even collect that tax? What if Google and Facebook shut down their UK offices?
The Tories have answers to none of these questions. They have no thinking behind this deeper than "let's grab some foreigners money and use it to buy off pensioners". The Treasury admitted they are assuming zero businesses will pull out of the UK because of these changes. How this will impact the global tax system, the costs of it, the chances of blowback? Unstudied.
The whole thing is an astonishing abandonment of a system of rules and laws.
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Alright, if you're so keen on mob justice then go for it. Just don't go crying when someone plucks an arbitrary unfair number from the air and makes you pay it, on the grounds that they just don't like you. What goes around comes around.
Re:What's the value proposition? (Score:4, Insightful)
What's the value of the UK government to Google?
It prevents the Google offices and datacenters from being raided by SWAT teams in the early hours. A very valuable service.
Re:What's the value proposition? (Score:5, Insightful)
They provide a country in which Google can make over 10 billion pounds a year. That's something Google should pay towards helping, surely. It's not grabbing their money, it's taking back the money they asked for and were not paid, by Google moving some numbers around between banks, in a direct, purposeful attempt to keep as many of those numbers as possible, to the detriment to the markets in which they made said money.
But I guess bitching about governments is more fun.
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"Google" is ultimately just a collection of people and assets. The assets are inert objects, they just exist and don't owe anyone anything. The services the UK provides only apply to people living in the UK, and their employees who live there already pay for those services via their own income taxes, VAT, council taxes and many more.
If you accept the bogus logic that th
Re:What's the value proposition? (Score:4, Interesting)
Unlike Starbucks, who, at the very least need outlets in the UK to sell coffee here, Google could run everything from a single location anywhere in the world, yet still trade with any other country.
Except Starbucks UK Ltd can presumably buy their coffee from Sunbucks Bermuda Ltd (no relation, honest), and make a loss in the UK.
The fundamental problem with taxing corporations is that corporations are much smarter than governments. After all, if you were smart enough to make a lot of money in business, why would you become a politician?
Re:Down with hidden taxes (Score:5, Insightful)
Hidden taxes like corporate income tax really abuse the low income population. Alas, demagogues find it easier to pretend otherwise for personal political gain.
So how will taxing Google's profits abuse the low income population? Perhaps google will quadruple the cost of search in order to pass on the cost...
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So how will taxing Google's profits abuse the low income population?
Google will increase advertising prices to make up for the lost income, which will cause advertisers to increase prices to make up for increased advertising costs, which will cause the low income population to pay more for the things they'll buy.
Or, if they can't increase prices, their reduced profits will result in reduced dividends and stock price, so those low income people stashing away a few pounds a month in their pension fund will find it's worth less when they come to retire.
What do you think happen
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You don't understand. Many countries in the UK are competing themselves to death in being "tax-friendly" to extremely rich companies and individuals. Even American rock stars are "located" in the UK, the Netherlands or wherever they can avoid taxation the most. Off course, this contributes nothing to either countries. To make matters worse, it opens up the possibility of all kinds of incomprehensible constructs that may even be less legal. But who knows? You'd have to know all the laws and all the deals wit
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countries in the UK
I meant many countries in the EU. There, fixed that for me.
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They have a definition of "fair share of taxes". It's "giving all your money to the government, so we can blow it on public sector pensions and windmill subsidies".