Taxes - what taxes

[doodab]

Yep.

And shouldn't the Tories be aiming to make the UK a low tax economy that attracts international trade instead of threatening businesses with all sorts of investigations? Look at the competition over here in Euroland; overtaxed, overregulated and generally falling asleep.

But what is a low tax economy? One where the individual faces > 50% marginal tax rates while corporations pay half that?

Is it even true that a lower tax economy attracts more investment and grows more? Personally I think that is a myth pedalled by people who stand to benefit from paying less tax on something that they would do anyway. Brazil and India both have higher corporation tax than we do, yet they are growth economies. The US have 40%. Did that stop intel, microsoft, google, facebook or starbucks from starting their businesses there?

Actually according to this table, Europe as a whole the lowest corporation tax rates in the world. Perhaps cutting them further isn't the answer?

Corporate tax rates table | KPMG | GLOBAL

[AtW]

Exactly and Starbucks pay their taxes according to where they make their profits.

Starbucks UK was a loss making operation for 7-9 years apparently

Well, loss making after exceptional items were taken into account - shifting all profits to low tax jurisdictions.

If you are now saying that Global companies should have entirely separate companies according to which country they are in then that is a different matter.

They already do - Starbucks is a UK Ltd.

Before you do argue this then you will find that many of the economies of scale that drive companies to become global operations will be lost.

Fine, I am pretty sure plenty of UK coffee companies will take their place to sell £3 coffees.

If you are going to argue for a "cost/profit per country" then you will also need to argue for the removal of the concept of globalised brands.

Global brands make it cheaper for them to sell same tulip in many countries - develop once and sell many times, only reasonable they pay taxes on extra profits they make this way in those foreign countries.

Starbucks brand has been developed in the USA and that investment has enabled it to sell products in foreign countries. Once you start playing your game then you will start having to unravel and quantify the intangible costs of developing a business.

If foreign subsidiary is losing money for years then close it down as loss making operation - Gateway (PCs) did it.

[tomtomagain]

No it wouldn't generate more tax ... that's not the point. It would massively simplify the situation though and remove the incentive to avoid it and free up the human-resources who currently add no real value to society ( i.e. the people wasting their time dreaming up new schemes )

The situation we have at the moment is an enormously complex tax code that makes avoiding it easy for example by "Buying" the right to use your own brand from a foreign subsidiary.

Companies are only a construct that allows society to have a better standard of living. i.e. we club together to efficiently make stuff that others value.

So why put an artificial cap on that construct? We don't tax charities or the public sector ... but we do tax people who work for both directly.

Of course as you say, some would still try to avoid paying their personnel level of taxation ..... but it should be easier to spot them and close down any loop-hole.


There are plenty of little "tax havens" that are set up with low or zero corporate tax rates ( the Isle of Man ) ..... just turn the UK into one great big tax haven!

[tomtomagain]

......... And it would really annoy the French.

[Mich the Tester]

......... And it would really annoy the French.

whs

[sasguru]

But what is a low tax economy? One where the individual faces > 50% marginal tax rates while corporations pay half that?

Is it even true that a lower tax economy attracts more investment and grows more? Personally I think that is a myth pedalled by people who stand to benefit from paying less tax on something that they would do anyway. Brazil and India both have higher corporation tax than we do, yet they are growth economies. The US have 40%. Did that stop intel, microsoft, google, facebook or starbucks from starting their businesses there?

Actually according to this table, Europe as a whole the lowest corporation tax rates in the world. Perhaps cutting them further isn't the answer?

Corporate tax rates table | KPMG | GLOBAL

There you go spoiling perfectly good imbecilic rants with the facts.
Again.

[VectraMan]

I'd set the corporate tax rate to 0%. Then there would be no need to minimise it.

Why should we tax company profits? It just limits employment and growth.

Just tax dividends, salary, benefits in-kind and consumption.

What is the point in trying to take 20% from a company in the UK when instead the company could retain the money and use it to employ others and to invest in whatever it does?

WHS. Corporation Tax makes no sense, and yes you'd have the problem of dividends being taxed overseas, but is that not fair enough if that's where the investors money comes from?

You'd solve a whole load of problems by doing away with CT and treating dividend income as normal income. IR35 being the obvious one. The only people that would really lose out is the accountancy profession.

[tomtomagain]

Not only would you not need all those hundreds of corporate tax accountants also you would not need all those hundreds of corporate tax inspectors.

And there you have the rub.

It's not in the interests of the tax avoidance OR tax collection industry to simplify the system.

[AtW]

Corporation Tax makes no sense

Why not?

There is pretty decent dividend tax credit, so it's not like it's double tax on same money.

What really makes no sense is removing free tax allowance to those who earn more than certain point - only a sneaky chunt can come up with such a thing - higher income tax is one thing, but robbing taxpayer of free allowance is BS.

[vetran]

Low taxation does generate more tax.

If you don't put the brakes on you go faster.

Small Government, Big society.