Paul Waine wrote:Hi HBH, you will have to excuse me on the "combined" response, I was in a rush to get out to work. Just back home now, after a very enjoyable evening: "A very expensive poison" by Lucy Prebble. Excellently written and staged at The Old Vic (near London Waterloo, for any not familiar with London theatres).
I'm unsure why you are referencing "average household budgets" and "national economies" - I make no link between the two. However, if you are arguing that "austerity" was wrong, the truthful answer is "what austerity?" There was no "big cut back" in Government spending; deficit expenditure has continued every year since 2010, that's why the national debt has continued to grow. Yes, there's been adjustments and re-prioritizing - and this was all necessary. Bad economics was the path that Gordon Brown had set the country on - "no more boom and bust" - unfortunately, GB led us to "bust." "There's no more money" was the truth.
It's bad economics to measure everything from the peak of a bubble. The summer of 2008 was that peak. If we measure from a few years earlier, let's say 2004 or 2005, then trend lines look a lot better - and personal wellbeing is also a lot better. Why measure stuff when it's all froth?
I like the idea of "reasonable debate" - and I hope that no one feels that I'm insulting them.
Yes, we disagree. I'm surprised why you think I am "pessimistic bordering on defeatist." I'm an optimist by nature. I'm not "defeatist" on a government not being able to increase taxes.....whatever other countries do. I feel there is a fair share of someone's income that the government can "demand" is paid in taxes - and there is a level above this level that is neither fair nor achieves the government's aim of "plucking the golden goose" without too much hissing and the death of the goose. If a country is "civilised," "cultured" and "balanced" then many people will choose to live there and be content to pay their fair share in taxes. On the other hand, if the state is "too ambitious" then the people who feel themselves to get the "worst of the bargain" will look elsewhere and settle somewhere where they feel "more fairly treated." I am referencing personal income tax rates.
You mention taxes on corporations and why do companies continue to trade in one country or another. The answer is straightforward, companies organise their operational presence according to the optimisation of their operational costs - be that a manufacturing presence, or a service centre presence, or a legal structure presence. (Why is London one of the world's major financial centres? why are a number of the major accountancy and legal firms in London, why is Jaguar Land Rover manufacturing in Midlands and in Central Europe? why is Nissan in Sunderland. Why does Airbus manufacture wings in Bristol and North Wales and other aircraft parts in other European countries?). The same companies then locate their market presence based on where their markets. i.e. their customers are? And, they organise their taxable presence according to internationally agreed tax laws - and their corporate activities that establish their corporate "permanent establishment(s)." (I've done some of this stuff in my career, I've passing understanding of PE tax rules, transfer pricing, thin capitalisation and similar - but, I'm very, very far from being an expert). So, some finance companies choose to locate around Dublin, because RoI offers favourable tax deals. Similarly, Microsoft has based their European headquarters in Dublin for favourable tax treatment. And then, along come all the "new" giant technology companies, Amazon, Facebook, Twitter (I guess) - and the international tax rules were set up long before the internet and this new technology existed, so these new companies "follow the rules" and we don't like it.
Enough for tonight. I've got work again in the morning.
- I'm afraid austerity was real.
- I don't understand why you'd want to tie a governments hands by saying no more than forty percent of a person's income should be taxed away (is this in the Bible or something?). Already we do that, so people paying back student loans could be paying sixty percent out of their salaries - or are you going to lump that in with mortgage and credit card payments? It's like that 19th Century argument that property is sacrosanct. The argument has to be considered holistically. If I'm being taxed at 90% on my income over £1 Million, I might feel disappointed, but it's not going to kill me. At the other end of the spectrum, people do actually die as a result of public services being underfunded. Seven hundred deaths of homeless people in the last year, for example. From a moral standpoint - especially when you get into the stratosphere of wealth - there is no argument for people hanging on to more of what they've earned, when other people in the same country have a lot less. You can argue that these people don't care about anyone else, and are mobile - and I say there's nothing wrong with the country taking punitive measures against such people - deny them access to our markets (once we have our sovereignty back we can do this), tax their passports and foreign earnings, and I'm sure there are people with more able imaginations than I have that could come up with other incentives to get people to pay in.
- with multinational corporations the best way to prevent them avoiding tax is for countries to work together. I hope that even though we're leaving the EU, Britain works with the rest of the EU to accomplish this.