Unfortunately in order to simplify (indeed, "dumb down") their message to get popular support they prove their absolute lack of anything resembling policies, solutions or intelligence.

It's wonderful having slogans.

It's not so wonderful if your entire movement for revolution is based only on one-syllable tweet slogans.

Let me know if this group ever actually comes up with a reasoned set of policies they want implemented. I doubt that will ever happen, because it requires actual thought, actual intelligence and a vision beyond simple soundbites.

Incidentally the Egyptians ousted Mubarak without resorting to publicity stunts. If you seriously think student japes (or on the other hand simple destruction) are what's needed in this country to effect change then get a grip and realise perhaps that public support is not with you.

I guess they might occupy the offices of GMG if they want to draw attention to tax avoidance by trusts & corporates !

Not actually about high taxes (sorry, modern rightwing "teabaggers")

Snigger

Specifically Guardain & EMAP

http://www.guardian.co.uk/money/tax-gap-blog/2009/feb/02/tax-gap-guardian

"More debatable is the transaction to acquire Emap in a joint venture with Apax, which was structured to avoid stamp duty. GMG says the technique was explicitly accepted by HMRC. Others might think any step to avoid a tax by putting it through the Cayman Islands counts as tax avoidance, no matter how resigned the taxman is to it."

I was at Trafalgar Square in 1990 and whilst it was regrettable, it worked and Thatcher went the same way as the poll tax shortly afterwards....Keep on ramming home the message "We pay our taxes, why shouldn't they"? enough times, it'll work.

@liamnsw

Well done you beat me to it :-)

UkUncut are nothing more than a bunch of moronic lefties running around protesting about things they don't actually understand as the farcical protests regarding Barclays, Next and Vodafone demonstrate perfectly.

Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology.

A protest in the British colony of Massachusetts against the British government-imposed Tea Act. Not actually about high taxes (sorry, modern rightwing "teabaggers") but more about "taxation without representation". There was a standoff between protesters in Boston and the governor over tea ships docked there. After a meeting, a group of between 30 and 130 men boarded the ships and dumped all 342 tea chests in the harbour.

Actually, the people involved were led by those who had interests in smuggled tea, which they sold at inflated prices. The legally imported, taxed tea was cheaper than their wares, so it was about people who were profiteering from a black market wanting to preserve their profits.

Perhaps you could spend your space in the Guardian outlining

1. Whether you think the levels of debt and deficit are sustainable (displaying knowledge of the difference between debt and deficit)

2. If you feel the deficit needs reducing how you would do this. I assume you'll say tax the rich

3. How you would go about getting the extra tax (demonstrating some knowledge of any likely effects)

4. It would also help if you underline whether you are accusing people of tax avoidance (legal) and tax evasion (illegal). For example, having an ISA is tax avoidance, so I presume you don't have one of those and sit around thinking of extra ways in which you can add money to the exchequer.

Rather than chanting your intellectually vapid tribal slogans it might be useful for you to get to grasp with the figures. This article here would be a good start:
http://ftalphaville.ft.com/blog/2011/05/26/578626/why-the-british-economy-is-in-very-deep-trouble/?updatedcontent=1

Mention the name of the group to your average person in the street (as opposed to a dreadlocked, sandal-wearing tofu-muncher, or whatever "leftwing activist" brings to mind) and surprisingly, it's quite likely that he'll not only have heard of them, he agrees with what they stand for.

That is a matter of opinion, to say the least. But we do have it on your authority that a nice old gent who might have voted Tory but who was definitely carrying a copy of the daily Telegraph said something that, in part, the group in question might agree with.

Can't argue with that.

GermanicusRex - What drivel,and said with a predictable sneer.

I would be more supportive of UK Uncut if they had actually read the HMRC work on the tax gap instead of relying on work by crackpots like Richard Murphy.

I'm going to gloss over Rubin later becoming a stockbroker.

I'm sorry, but that would appear to be the most pertinent statement in this article.

I'll take these guys seriously when their protest heads up the Farringdon road.

R042- UK Uncut is all about solutions! They say we don't need the cuts forced on us by the government if we collected the tax owed to the British people by corporations who avoid billions in tax every year. Also, they point out that the bankers who caused the financial crisis are still getting massive bonuses- from taxpayer's money- so we should make them pay for the schools, hospitals and libraries which would benefit everyone.

Have a look at their website- probably the first time you will have done this, but hey, no-one's perfect. On it you will see lots of articles from people who have many creative and well-researched ideas about how to get this country out of the mess it's in through creating jobs and saving public services.

I'm looking forward to their national day of action tomorrow- transforming banks into hospitals to show how it's banks that need reform and the NHS that needs a bail-out. This isn't just a slogan- it's about getting our priorities straight as a nation.

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R042

Let me know if this group ever actually comes up with a reasoned set of policies they want implemented. I doubt that will ever happen, because it requires actual thought, actual intelligence and a vision beyond simple soundbites.

They don't need to come up with policies, that's the government's job. The stated reason that the government struggles to shut these loopholes is that the companies will threaten to move to a different country, and it's a threat to which the government doesn't really have a response.

Where groups like UKUncut come in, is they raise the public awareness to the practices of legal but against-the-spirit-of-the-rules tax avoidance, and gives the companies that threaten to offshore a dilema that didn't really exist before: if they offshore to avoid taxes, it will be flagged-up and they will lose business in the UK. It allows the government more negotiating points when planning business tax plans.

Get enough support among the public, and you end up with a situation where it is a company's direct financial interest to pay their taxes. Government can't do it without the public demanding it.

@Silverwhistle

Exactly. The Tea Party was all about profiteering from a virtual - and illegal - monopoly. The British were simply trying to break the smugglers' stranglehold. Like many seminal events in American history, the propaganda long ago trumped the truth.

Mr Paige - Bad example, I'm afraid.

A problem you have is with the self-glorifying,self-centred approach of some of your advocates in the media. They pose as allies, daring rebels-by-association, but are really only concerned with their media careers (posing as the voice of a generation, yadda,yadda). Their quest for personal fame tends to push the cause into the shadows, and by goodness they won't put their necks out. If their egos could be reined in, then stuff can get done.

How about you encourage them to make a clear and unambiguous statement of what they stand for, this time showing their workings.

GermanicusRex

Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology.

I'm sure you said you were an economics student, do you realise that the logical conclusion of that statement is that setting rates at zero would maximise tax revenue?

They already have become the anti-cuts Hare Krishnas.

Apart from supporters and armchair admirers they are the people known only for decorating London with their "Oppose all cuts" stickers. As such they seem like every other bunch of vaguely anarchistic unemployed student dropout mob. It wasn't the guys who tossed the tea into Boston Harbour that went onto lead America to independence, it was people with a coherent political philosophy that had practical answers for all the important issues of the time.

"Oppose all cuts" is only half an answer. Maybe even just a quarter.

You know what else it needs to do? It needs to stop talking shite.

Example: the day of the royal wedding, there was a mini-riot in Kelvingrove Park, and the police were bottled by pissed up hooligans.

Cue UK Uncut shouting about the whole thing being caused by heavy-handed police tactics, when it was categorically nothing of the sort.

I support UK Uncut and what it is doing, but it needs to stop devaluing its work by coming out with bollocks like this.

Benulek

How about you encourage them to make a clear and unambiguous statement of what they stand for, this time showing their workings.

Surely the basic principle is companies paying more taxes would mean fewer cuts were necessary? I'm not accusing you of this, but it is irritating when people say that corporate tax couldn't make up the whole deficit, as if it is only worth doing if it clears the whole thing.

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In the mid-90s the Tolley’s tax guide was two volumes. It is now five. If you lot knew anything about ‘complex systems’ you’d understand that the chance of a system failing are the square of its complexity. You can relate this to a country’s tax code. The more rules, the more potential loopholes. Osborne’s recent budget closed some loopholes, most of which developed from St Gordon of Kirkcaldy.

You can’t on one hand complain that Alliance Boots has its headquarters in another country (and consequently pays its corp tax in that country), AND at the same time complain about Barclays’ ‘low’ tax bill that was recently in the news, given that the corp tax bill it has paid is in relation to the business that has its HQ in this country (i.e. the retail and investment banking business that operates in the UK) – that is, unless you are suggesting that any company that operates in the UK should pay its worldwide tax liability to the UK exchequer. You are trying to develop a ‘narrative’ based on falsehood, that big companies routinely ‘don’t play fair’ and deprive the UK exchequer of what you consider to be legitimate tax revenue.

You might not like the arrangements that Philip Green and his wife have in relation to their tax affairs. Personally, I don’t either. But last time I looked the law doesn’t get made by the ‘court of public opinion’ ( copyright H. Harperson re Fred the Shred’s pension) and we don’t arbitarily confiscate people’s wealth because ‘they haven’t played fair’.

"your average person in the street ... surprisingly, it's quite likely that he'll not only have heard of them, he agrees with what they stand for."

Want to bet?

I do not consider that UK Uncut is either original or efficient and I believe that some of what they criticize shouldn't be, but so what? That's no reason to sneer at them. As to their having alternatives or not, does anyone else have any? I mean, am I supposed to believe that a CiF commenter somewhere in Basildon or Barnsley holds the key to Britain's salvation? I'm glad they DON'T have the arrogance to think they have credible answers to be honest.

Their job is to bring people's attention to subjects they find worthy and that's their right, as long as it doesn't involve violence. Long may they run.

I'm sure you said you were an economics student, do you realise that the logical conclusion of that statement is that setting rates at zero would maximise tax revenue?

Um.....no, because a tax rate of zero means no taxes. I hope you were joking

The violence was regrettable, but it brought the countrywide opposition to the tax to a head and hammered home the message that it was a step too far, even for Thatcher. She was forced out later that year.

That was nicely done.

Implying that Thatcher was forced out as the result of the Poll Tax riot without actually saying it.

Presumably, because you are fully aware that she was in fact forced out because of her opposition to the ERM.

Uncut are classic infantile leftists full of sound and fury signifying nothing. Guy Debord could well be an ideal mentor; a drunk who topped himself!
This time next year the Uncut mob will have returned to their bed-sits and Che Guevara posters and be wondering whether dreadlocks and animal rights are trendy again. It's tragic watching oldsters sucking up to Uncut, like watching a drunken uncle bopping to the new Lady Gaga album.
No one is obliged to pay a penny more in tax than they are legally obliged to and that applies to corporations. In fact corporations have a legal duty to their shareholders to minimise their tax payments by all legal means.

whizgiggle
27 May 2011 1:34PM
Benulek How about you encourage them to make a clear and unambiguous statement of what they stand for, this time showing their workings.

Surely the basic principle is companies paying more taxes would mean fewer cuts were necessary? I'm not accusing you of this, but it is irritating when people say that corporate tax couldn't make up the whole deficit, as if it is only worth doing if it clears the whole thing.

It's also irritating when people pretend that an uncompromising pursuit of tax avoidance wouldn't have significant knock-on effects, regardless of how the situation is evaluated from a moral perspective. Have UK Uncut factored into their calculations the expected effects for tax receipts of companies relocating their headquarters or withdrawing entirely?

GermanicusRex:

Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology

Sooo, your quite content that 'Sir' Phillip Green pays himself a £1.6B salary, avoids paying taxes, and uses sweat-shop labour to make his billions?

1980stown
27 May 2011 1:26PM

R042- UK Uncut is all about solutions! They say we don't need the cuts forced on us by the government if we collected the tax owed to the British people by corporations who avoid billions in tax every year. Also, they point out that the bankers who caused the financial crisis are still getting massive bonuses- from taxpayer's money- so we should make them pay for the schools, hospitals and libraries which would benefit everyone.

Have a look at their website- probably the first time you will have done this, but hey, no-one's perfect. On it you will see lots of articles from people who have many creative and well-researched ideas about how to get this country out of the mess it's in through creating jobs and saving public services.

I'm looking forward to their national day of action tomorrow- transforming banks into hospitals to show how it's banks that need reform and the NHS that needs a bail-out. This isn't just a slogan- it's about getting our priorities straight as a nation.

Priceless turning banks into hospitals?. And when you pay the people working in the hospitals where will they put their wages, how will they pay their bills, who'll provide pensions, how will they get a mortgage or a loan for a car to get to work. Where will they keep their savings. How will the scanner made by Siemens in Erlangen Germany be paid for. Cash? Sterling? they don't take Sterling only Euros and who's going to provide finance so that you can pay for that over 10 years instead of cash on the barrel.

Should you really be using the internet without parental supervision?

whizgiggle

Surely the basic principle is companies paying more taxes would mean fewer cuts were necessary? I'm not accusing you of this, but it is irritating when people say that corporate tax couldn't make up the whole deficit, as if it is only worth doing if it clears the whole thing.

Who exactly do you think pays "corporate" taxes?

There's a Yes Men -type character named "Toby Young" who is doing some good work, I think.

Surely the basic principle is companies paying more taxes would mean fewer cuts were necessary? I'm not accusing you of this, but it is irritating when people say that corporate tax couldn't make up the whole deficit, as if it is only worth doing if it clears the whole thing.

Not necessarily. Part of the reason a multinational will do parts of its work in a country will be based on the tax regime. If taxes are considered too high, it may decide that it will move away rather than pay the additional tax. This means job losses, so you lose the tax from income, VAT from its workers which may be greater than the amount gained through an increase in corporation tax. Or, in the alternative, they will stay but deal with the increased corporation tax by cutting elsewhere - for example jobs.

I have a great deal of sympathy for those losing their jobs, but the narrative that it is all simply the fault of dirty bankers and all we need to do is raise taxes and we will in a land of milk and honey is eye wateringly simplistic. The world is much more complex than that. We actually need a total rethink on tax in this country with a move away from rewarding speculation and punishing work, but that would involve us to throw off the shackles of the neo-feudalism in which we live. This certainly isn't going to happen whilst the left think occupying buildings and chanting slogans is actually going to change anything.

We live in a society of the spectacle, which the media feed on and reproduce for our entertainment. What groups such as UK Uncut must do to catch the attention of the news providers is to create an even bigger spectacle. In other words, you can only do the same thing for so long before you lose the attention.

I don't think you understand Situationism at all. It certainly wasn't about catching the attention of news providers!

'

@wheatie: "ho exactly do you think pays "corporate" taxes?"

He's a lefty - he thinks that the 'rich corporation' pays. Why let reality get in the way of his delusions?

I was at Trafalgar Square in 1990 and whilst it was regrettable, it worked and Thatcher went the same way as the poll tax shortly afterwards...

Is that what you think happened? Thatcher went, but the poll tax was renamed "council tax" and exists to this day.

Expletive
27 May 2011 1:45PM
GermanicusRex:

Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology

Sooo, your quite content that 'Sir' Phillip Green pays himself a £1.6B salary, avoids paying taxes, and uses sweat-shop labour to make his billions?

That's it there in a nutshell. If you actually wanted to collect more tax and spend more on services you'd want rates lowered and the tax code simplified. The net result would be more tax collected, less avoided and evaded. But you can't get your head out of the trench of envy. You care more about trying to get back at people like Green than you do about getting more of his money.

I'm sure you said you were an economics student, do you realise that the logical conclusion of that statement is that setting rates at zero would maximise tax revenue?

that's the same bollocks logic that says that if you bring in £100bn in tax when the rate is 40%, you'd bring in 150bn if the rate was 60%. It's perfectly clear what GermanicusRex is saying, it is that there is an ideal point where you can maximise tax revenue, and above and below that level of tax you will either fail to collect enough tax because the rate is too low, and above that rate people will take more steps to avoid it (one of which is not bothering to go to the effort to earn the taxable profit in the first place).

I'm just a cog in the system. I won't personally, directly, benefit if the corp tax halves or doubles (I don't own a company or significant amounts of shares). So why do you think I'm in favour of keeping taxes low and spending in check? I'm one of several million who voted for the tories, and at least some of the lib dem votes were from people with low-tax tory leanings who voted that way tactically. Do you assume we are all £100k a year people with their tax arrangements arranged outside of the PAYE system?

GermanicusRex - What drivel,and said with a predictable sneer.

strummered

Oh look another pithey one liner with nothing of note added to the debate.

How nauseatingly predictable.

Incipient protest groups wishing to draw attention to their particular cause would do well to take note of the Fathers4Justice protests.

Purple powder thrown in Parliament, motorways bought to a grinding halt by activists climbing gantries, Cafcass offices having their doors painted purple and, best of all, Batman on the balcony of Buck House defying armed police while showing the extent of peoples anger with a disreputable legal situation.

All peaceful, no violence, no one hurt and until the organisation fell apart applying huge amounts of pressire to the authorities to bring about change.

The collective delusions of groups like UK Uncut never fail to amuse me. Pray tell, if acting like a twat in the name of some trendy cause has failed to ever make a difference to anything in this country previously, what is so different now?

Telegraph-reading man hits the nail on the head. The problem is, the majority of people probably DO agree that corporations should pay their taxes properly if everyone else is expected to (EvilTory, you actually doubt that?!). UK Uncut seems to think otherwise, which is frankly quite bizarre; what it is ever more bizarre is that they think that inconveniencing the very people they need on side (your average consumer/commuter) is somehow going to make a difference?

The comment about Rubin becoming a stockbroker - no no no, do not gloss over it, this is exactly the problem, because it demonstrates what people see in protestors: privileged kids who don't live in the real world and whose 'opinions' are based solely on what is trendy, who will betray these principles as soon as they have to start thinking about a mortgage and a pension.

Benulek:

Have UK Uncut factored into their calculations the expected effects for tax receipts of companies relocating their headquarters or withdrawing entirely

Yes they have, because if you are talking about companies such as Top Shop, BHS, or Boots, then the amount of tax revenue that they are feeding back into the treasury is relatively tiny in comparison to their income, and as a proportion of their generated income, is less than other similar sized companies. The same argument you are making has been used in favour of keeping our 'top' bankers in their positions, even though they have already demonstrated their incompetence.

So what if they up-sticks and leave? - They're a liability anyway.

It's a testament to it's effectiveness as protest that 245 years after the Boston Tea Party ended, people in the UK are still trying to pretend that it wasn't a legitimate protest action, or that it was motivated primarily by smuggling, etc. So good example, Paige.

Or maybe it isn't, since it's apparent that many still dont get the message, and rationalize because they fail to understand why the colonists would want to rebel.

@Karl1976

To be fair the inflation in the number of Yellow Books is more down to the rewrite programme than anything else. Turning ICTA into effectively six acts - ITEPA, ITTOIA, ITA, CTA09, CTA10 and TIOPA10 has bulked up the books massively!

Not that I'm complaining - much easier to read than the old style legislation.

I too was going to question Germanicus Rex.

Pretty obviously a 100% tax rate will get very little tax paid. Equally obviously a 0% tax rate will not get much tax paid either. Equally equally obviously there is some point in between at which a tax take is maximised. Maximum take is not the only goal, of course, you also want equity, encouragement for future enterprise and security of supply of tax income. Also the optimum tax rate/s will vary over time with changing circumstances.

I think that an Income Tax rate starting at about 25% and rising to about 55% won't dissuade enterprise and will cover decent social security and pensions. (Coupled with Inheritance Tax of 20% starting at £500k and Corporation Tax/Dividend tax starting at 10% with a closing of loopholes for offsetting debt.)

What I don't think meets any of the goals of tax collection is little secret, possibly illegal, deals between the head of Inland Revenue, Hartnett, and the Finance Directors of big companies, behind closed doors with noone from the Revenue present who will admit to expertise in corporate taxation. And that's what we get, time and again.

I agree to some extent Jonathan, though I think it was worthwhile of UK Uncut to return to the actions it is best known for after Fortnum & Mason. I see this weekend as UK Uncut's way of saying, 'we're still here, and we're not stopping.'

Bigger and better stuff would be good, and I'm sure it will happen eventually. The enthusiasm is certainly ther, I think.

It'd be really good to use this thread to debate how UK Uncut could up its game in the future. It's a shame the uual suspects have descended, to spout inaccuracies, slanders, cliches, and bitterness. It's boring.

@Expletive

You clearly have no knowledge of how a company's corporation tax computation is put together.

"Income" per the accounts often bears little resemblance to what is actually taxed - ask the Guardian when they sold off the chunk of Autotrader!

GermanicusRex

Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology.

I'm sure you said you were an economics student, do you realise that the logical conclusion of that statement is that setting rates at zero would maximise tax revenue?

whizzgiggle

Strawman. Nowt more.

Taxation levels directly effect government revenue, set it too low or too high and you will decrease revenue. GCSE level stuff.

Expletive
27 May 2011 1:56PM

So what if they up-sticks and leave? - They're a liability anyway.

I'm sure that argument will be very appealing to the people they employ.

GermanicusRex

27 May 2011 1:20PM
Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology.

That is a the theory of the Laffer curve. It is an economic theory held by some economists. I don't think even they would agree that your rather oversimplified generalisation is an empirical fact.

However I'm pleased to see your concern for maximising revenue, and trust you agree that HMRC clamping down on tax avoidance and tax evasion is a good thing and will increase tax receipts.

Perhaps we will indeed see you on the next UKCut demo aimed at tax cheats

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Mention the name of the group to your average person in the street (as opposed to a dreadlocked, sandal-wearing tofu-muncher, or whatever "leftwing activist" brings to mind) and surprisingly, it's quite likely that he'll not only have heard of them, he agrees with what they stand for.

You need to get out more.

entered Vodafone's flagship store and sat down

surprisingly, it's quite likely that he'll not only have heard of them, he agrees with what they stand for.

Typical left wing hypocrisy!

Oh come on, it's Friday.

Do the Graun now routinely hand over their op-eds to the YTS kids to do? This immature rubbish is only matched for naivete by the open borders twaddle elsewhere.

Mention the name of the group to your average person in the street (as opposed to a dreadlocked, sandal-wearing tofu-muncher, or whatever "leftwing activist" brings to mind) and surprisingly, it's quite likely that he'll not only have heard of them, he agrees with what they stand for.

I am not disputing that people might agree with the cause of UK Uncut, but I remember reading the results of a recent poll which suggested that the actions of UK Uncut had no effect at all on consumers' perceptions of Vodafone, Topshop etc. So in terms of actually hitting these companies where it hurts (i.e. the profit and loss account), UK Uncut is a big fat failure.

Guy Debord was right.

Cheered me up anyway.

Jeez, how dumbed down is this?

You're talking about (lame, dated) PR stunts. Not about how UKUncut might develop a reasoned, plausible 'manifesto' that might attract mainstream support because it offers a credible alternative.

Come back once you have a couple of Nobel Prize winning economists on board, when you've learned to tie your shoe laces, when you can walk and chew gum at the same time.

Because until then, you're just wasting everybody's time, and it will backfire on you.

@R042

Incidentally the Egyptians ousted Mubarak without resorting to publicity stunts.

We live in an accountable democracy, where raising awareness of issues can sometimes get them dealt with.

Egyptians were living under a brutally oppressive regime, which they wished to overthrow.

Should we rise up on mass, overthrow parliament and build our democracy from scratch everytime a government enacts unpopular policies?

EllsBells

I agree to some extent Jonathan, though I think it was worthwhile of UK Uncut to return to the actions it is best known for after Fortnum & Mason. I see this weekend as UK Uncut's way of saying, 'we're still here, and we're not stopping.'

Yes, after attacking Fortnum & Mason, UK Uncut's raison d'etre was revealed to the world. It's not about 'fair tax' but about sad little socialists trying to foment class war and attacking people not because they don't pay tax, but because they're rich. It's not an answer to the deficit, or to paying off the debt.

Bigger and better stuff would be good, and I'm sure it will happen eventually. The enthusiasm is certainly ther, I think.

It'd be really good to use this thread to debate how UK Uncut could up its game in the future. It's a shame the uual suspects have descended, to spout inaccuracies, slanders, cliches, and bitterness. It's boring.

How about we use this thread to get UKUncut to explain how it would balance the UK's books?

just dropping in briefly to try and address some comments.

starting at the bottom @sithepi - i'm not sure where you get UK Uncut seems to think otherwise - surely they do believe that corporations should pay their taxes properly if everyone else is expected to

@cellarman - yes, good example

@bluelabour - how low would taxes have to be in Britain before the ultra-wealthy stopped trying to avoid them? seems to me that there'll always be some tropical island somewhere offering a more favourable rate.

@mrjoe - the council tax is a bastardised hybrid of the poll tax and the old rates

@forgetfulcat - i know. let's never speak of this again

@30percenter 'We actually need a total rethink on tax in this country with a move away from rewarding speculation and punishing work, but that would involve us to throw off the shackles of the neo-feudalism in which we live' - how do you propose to do this without groups like UK Uncut raising awareness?

more later

GermanicusRex:

Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology

Sooo, your quite content that 'Sir' Phillip Green pays himself a £1.6B salary, avoids paying taxes, and uses sweat-shop labour to make his billions?

Life is too short to bother explaining to you just how wrong you are.

Greens wife is a foreigner and as such is not liable for UK tax or do you think we can tax every person on the planet?

You will to need show how Green is avoiding taxation in order for me to reply.

As obtuse as it sounds working in third world sweat shops is actually better than the alternative for people in the 3rd world people are queueing up to work in them. I realise you cannot comprehend this but the fact remains. A few decades ago South Korea and Taiwan were the sweatshops now they are richer per capita then we are, its called economic development.

Webcorex2

It's a testament to it's effectiveness as protest that 245 years after the Boston Tea Party ended, people in the UK are still trying to pretend that it wasn't a legitimate protest action, or that it was motivated primarily by smuggling, etc. So good example, Paige.

It certainly was motivated by smuggling but that didn't stop it being a legitimate protest action against both the purported monopoly which had been given to the East India Company and Lord North's stubborn decision to retain a (fairly token) tea tax merely to reserve (Westminster) Parliament's right to tax the colonies.

But if you genuinely believe that everybody who took part in it did so for purely philosophical reasons, then you have a far rosier view of human nature than i have:-)

Or maybe it isn't, since it's apparent that many still dont get the message, and rationalize because they fail to understand why the colonists would want to rebel.

Interesting that you (and the author) should cite an anti-tax riot (actually ... two of them, if you include the "poll tax") in support of an organisation which calls for more tax to be collected.

GermanicusRex

Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology.

What facts? If you are referring to the Laffer Curve, there is no empirical evidence as it is not possible to identify with certainty where on the curve an economy is at any particular point in time.

Laffer is mis-used by people who think that it shows lower tax rates mean higher tax receipts. This is of course not always the case as there are other, more significant, factor in the economy, which affect tax take. Laffer also attempts to show that if tax rates are reduced too much tax take falls but right wingers never mention that part.

If Laffer was real, and by that I mean that changes in the tax regime affect human behaviour, then it would be applied to all forms of taxation, but you never hear right wingers saying alcohol and tobacco duties should be reduced as smuggling from France and Belgium reduces our tax revenues of those duties.

No matter how 'simplified' the tax system was, without lobbying for removing inter-national tax-havens and fundamental law changes, including removing 'non-dom' status 'Sir' Phillip would still keep his companies registered under his wife's name in Monaco, and still be smug tax-avoiding gangster. Oh, and yes I think Phillip Green should be exiled or imprisoned (with hard labour) for his company's use of sweat-shop labour alone.

Join the real world son. How are you going to tell sovereign states how to manage their tax systems? If you were making an argument for the re-introduction of capital controls, then we'd be entering the realms of the plausible. If you were talking about banning imports from countries considered to be using child labour you'd have another point (but a problem managing it - I'd also further argue it is for sovereign states to enforce their laws) But no, you have basically got a bee in your bonnet about the rich and how they are all dirty. I used to be left wing myself but I left, mainly due to prats like you and the realisation that the numbers simply don't add up.

EllsBells

"It's a shame the uual suspects have descended, to spout inaccuracies, slanders, cliches, and bitterness. It's boring."

Boring! Yes. I'm bored out of my mind by people pretending that UK Uncut's actions are going to make any difference, just like all the other "peaceful ideological resistance" groups who don't seem to have got the message that this stuff doesn't work.

It's like watching the sandal scene in Life of Brian - chumps arguing with other chumps over words, phrases, ideas and fun-filled activity days, while everyone looks on wondering how they can possibly believe in all this shit while mountains of evidence to the contrary stare them straight in the face.

JonathanPaige

starting at the bottom @sithepi - i'm not sure where you get UK Uncut seems to think otherwise - surely they do believe that corporations should pay their taxes properly if everyone else is expected to

But "everybody else" pays corporate taxes too.

Only people can pay taxes. Whilst a corporation is treated as a person by means of a legal fiction, it can no more pay tax than can a tree. All a corporation tax is is a disguised tax on ordinary people.

Which people?

First in line will be its customers, by way of higher prices.

If the market place is too competitive to pass the whole tax on to the customers, then the next in line will be its employees, by way of lower salaries.

Last in line will be its shareholders - who will include those who have saved for pensions (in the case of larger companies).

Jonathan Paige

"sithepi - i'm not sure where you get UK Uncut seems to think otherwise - surely they do believe that corporations should pay their taxes properly if everyone else is expected to"

No fella, you've got the wrong end of the stick.

I'm not saying UK Uncut don't believe that corporations should pay their taxes - clearly they do, as that is their raison d'etre.

What tickles me is that UU think that the general public don't agree with this point, and that's why their ranks are yet to be swelled with millions of ordinary people (decorators, plumbers, shop assistants, single mothers, high wire linesmen, etc) as opposed to the usual collection of people who would join any pressure group provided it was vaguely opposed to something the government had said.

It's not, it's because ordinary people have more important things to do than occupy shops and put stickers up.

Expletive
27 May 2011 2:03PM
BlueLabour:

No matter how 'simplified' the tax system was, without lobbying for removing inter-national tax-havens and fundamental law changes, including removing 'non-dom' status 'Sir' Phillip would still keep his companies registered under his wife's name in Monaco, and still be smug tax-avoiding gangster. Oh, and yes I think Phillip Green should be exiled or imprisoned (with hard labour) for his company's use of sweat-shop labour alone.

Cart before horse again. Why do tax shelters and tax havens exist? And why do people bother to use them. Why do they hire tax accountants and business engineers. Quite simply because the tax code punishes people that don't.

Even small businesses now need to hire tax accountants because the system of allowances and offsets is complex and if they get it wrong they will lose money or be fined by HMRC.

Remember Ken Livingtone's idea about the buses. 10p flat fare. Fill the buses up and increase revenue. That is how tax is. At the moment people find tax complex and expensive they try to avoid it and because it is complex there is plenty of wiggle room to do that. Some try to evade it. You need to set Tax levels at rates where people almost can't be bothered to avoid it. Like the 10p flat fare they are happy to climb aboard the bus rather than thinking if they could get a mate to come along with them and split the fare it would be cheaper by Taxi.

ArbuthnotPedant

I want a simplified, hard-to-avoid tax system. The by-product of that will be a maximising of revenue, because the tax code will make it harder to avoid. How difficult is that to see?

But that's not what UKUcunt are about, is it? UKuncut gave the game away with their infamous Fortnum and Mason press release, "because they gave x to the Conservative Party in the 1980s or 1990s". Its only now that the 'bad guys' are in charge that we hear a peep from all these bloody hard-left muppets.

I'm not 100% convinced that the tories are doing the right thing by reducing spending, and they sure aren't doing a winner on their communication skills. A tiny tiny bit of me wishes it was Darling, Brown and Balls having to mop up this crap, whilst Polly tells us how 'it has to be done as there is no alternative, we just have to pinch our noses and tolerate it in the name of the glorious progressive(tm) revolution"...

sorry mods, I just did a Jeremy Hunt there...

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BlueLabour so your going to try and get more people onto already overcrowded buses , while what could go wrong with that idea !

@30percenter 'We actually need a total rethink on tax in this country with a move away from rewarding speculation and punishing work, but that would involve us to throw off the shackles of the neo-feudalism in which we live' - how do you propose to do this without groups like UK Uncut raising awareness?

Uncut is raising awareness about the wrong thing and are totally misguided. The problem this country has is excessive amounts of tax on the wrong things. There is nothing wrong with low corporation tax - we need businesses to set up here to supply jobs and give us the tax to fund our welfare state.

Since 1997 the following has happened (I want to say I think the Tories would have done the same, so this isn't a big anti-Labour rant)

1. Wages went up 50%
2. House prices tripled
3. Council tax doubled and in same cases tripled

This is on top of a situation where the poor are taxed (an obsenity in itself) and are often dependant on government subsidy. VAT is deeply regressive. Further to this we have an absence of new council housing, meaning that private landlords are being gifted property by the govt through housing benefits. We also have a taxation system which rewards speculation through a lower tax rate than that on income.

We therefore need to move away from these methods of taxation (ie abolish income tax) and derive tax through getting at rent seeking. The problem in this country is the addiction to money for nothing rent seeking and short termist attitudes. We need a balanced, sustainable economy. UK Uncut just wants more of the same big govt mess.

greendragonreprised: "you never hear right wingers saying alcohol and tobacco duties should be reduced as smuggling from France and Belgium reduces our tax revenues of those duties."

Perhaps you don't meet many right wingers? Or libertarian types? In some circles, I assure you, it's a commonplace saying.

UK Uncut has achieved a quite astonishing level of prominence in a shockingly short amount of time.

That's just not true. Say UK uncut to a bunch of regular people and most of them will say "Who?". I've heard of them, but only via CIF articles. Their protests at the end of last year were only memorable for how pathetic they were. In Manchester the protesters kept loosing each other amongst the shoppers who outnumbered them by hundreds to one. People were walking past the protest all day, completely oblivious of it.

In Manchester the protesters kept loosing each other amongst the shoppers who outnumbered them by hundreds to one.

"Giles, Giles! Yah, over heah, over heah!"

greendragonreprised

If Laffer was real, and by that I mean that changes in the tax regime affect human behaviour, then it would be applied to all forms of taxation, but you never hear right wingers saying alcohol and tobacco duties should be reduced as smuggling from France and Belgium reduces our tax revenues of those duties.

Erm ... yes you do.

What facts? If you are referring to the Laffer Curve, there is no empirical evidence as it is not possible to identify with certainty where on the curve an economy is at any particular point in time.

What are you talking about? Every single tax take of every single sovereign nation at a set level of taxation is empirical evidence. There are a myriad of studies by various academics, think tanks, and policy makers. Google it.

Laffer is mis-used by people who think that it shows lower tax rates mean higher tax receipts. This is of course not always the case as there are other, more significant, factor in the economy, which affect tax take. Laffer also attempts to show that if tax rates are reduced too much tax take falls but right wingers never mention that part.

Laffer is dismissed by those that politcally do not like the information that it shows

If Laffer was real, and by that I mean that changes in the tax regime affect human behaviour, then it would be applied to all forms of taxation, but you never hear right wingers saying alcohol and tobacco duties should be reduced as smuggling from France and Belgium reduces our tax revenues of those duties.

Taxation and benefit levels do strongly effect peoples behaviour and to think otherwise denies human nature but seeing as though many of the left wing policies need to do this in order to be implemented it is not surprising.

@sithepi

As a reporter, I've been covering most of the UK Uncut events, and I can tell you that exactly what it isn't is 'the usual collection of people', if by that you mean SWP members and the like.

As for the 'ordinary people' having more important things to do, surely it's more that the group only began seven months ago. I suspect more 'ordinary people' are willing to join in than you think.

If Laffer was real, and by that I mean that changes in the tax regime affect human behaviour, then it would be applied to all forms of taxation, but you never hear right wingers saying alcohol and tobacco duties should be reduced as smuggling from France and Belgium reduces our tax revenues of those duties.

I think you'll find that HMRC are fully aware of how much revenue they lose from duty-avoidance: They will also apply similar logic: Too low and they won't collect enough, too high and the sales of counterfeit fags up the holloway road will go through the roof.

The same logic, I believe, is applied by the Met with regard to drugs busts: Keep enough on the streets so that the price stays relatively low, the quality relatively high, and the turf wars to a minimum, without having the stuff available on every street corner...

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"I was at Trafalgar Square in 1990 and whilst it was regrettable, it worked and Thatcher went the same way as the poll tax shortly afterwards....Keep on ramming home the message "We pay our taxes, why shouldn't they"? enough times, it'll work."

Is it only me that sees the contradiction here?
Up until the Poll Tax only ratepayers contributed to local services that were used by all residents - how was that ever fair?
Part of the reason for the Poll Tax was that everyone should contribute but, as usual, the great unwashed didn't like the idea of paying towards getting the street cleaned or maintaining libraries or leisure centres.

"you never hear right wingers saying alcohol and tobacco duties should be reduced as smuggling from France and Belgium reduces our tax revenues of those duties."

Its true though. Booze Cruises and Baccy Runs would drop to a fraction of current levels if tax of Alcohol and Tobabcco where cut to a reasonable amout.

All over regulation and over taxation does is fuel black markets.

Expletive:

Sooo, your quite content that 'Sir' Phillip Green pays himself a £1.6B salary, avoids paying taxes, and uses sweat-shop labour to make his billions?

This is a typical comment and demonstrates the casual ignorance of fact, tax law and business demonstrated in most of UkUncut's pronouncements.

Sir Philip Green doesn't get a £1.6bn salary. He gets a £2 million (or so) salary on which he pays about 52% income and nat insurance in the UK.

His wife, who OWNS the company, is not a British resident, she lives in Monaco and so pays Monaco taxes. As a shareholder in Arcadia she received a £1.6 billion dividend a few years ago.

I disapprove of Mrs Green moving to Monaco, but it isn't as yet illegal to stop British citizens moving abroad permanently. And when legally resident abroad you pay taxes in the country you reside in.

@Karl1976

I think you'll find that HMRC are fully aware of how much revenue they lose from duty-avoidance

Oh no you can't be right, it is well known on the pages of the Guardian that HMRC are a bunch of idiots that can't collect tax from bankers bonuses (when they are published in the papers), corporate profits (when they are published in the financial statements) and just let Vodafone off £6bn tax bills because they are a jolly good bunch of chaps.m I mean everyone writing on here are more a tax expert that anyone at HMRC.

Karl1976
27 May 2011 2:27PM
sorry mods, I just did a Jeremy Hunt there...

I think you should copyright it swiftly and licence it to the youth wing of UKIP.

JonathanPaige
27 May 2011 2:09PM
just dropping in briefly to try and address some comments.

@bluelabour - how low would taxes have to be in Britain before the ultra-wealthy stopped trying to avoid them? seems to me that there'll always be some tropical island somewhere offering a more favourable rate.

The issue isn't the ultra rich. Though I know you are fixated by them and you are right they are highly mobile if they want to be. It may seem odd but their wealth isn't that much money in tax terms. There are not that many of them that would make a significant difference. Even if you took all of Abramovich's money (he's Russian mind you). He According to Forbes list owns a net wealth of £13.4 billion. Even if he had that in cash and you took it off him that's a one off payment. It's all gone.

alright let's be sensible and say he earns 1 billion a year 7.5% net return on his 13bn and let's take all that. That's only a £1billion. How many Abramovich's are there in the UK. Not very many is the answer. Clearly you won't fix the tax gap by targeting the super rich even if you could.

The tax gap is going to be fixed by the net effect of lower taxes on people where the avoidance strategies are more difficult and less worthwhile. More difficult because the tax code leaves less loopholes and wiggle room. and less worthwhile because the rate is lower.

One of my bug bears I have is that my teacher friends and I know full well that if you want to increase the number of kids getting grades A to C for their GCSEs then you focus on moving the kids who are likely to get D grades to improve slightly so they get a C and the C's that are near the bottom so that they stay C's.

Annoying isn't it. But that is how you increase overall grades and that is also how you get more tax. You move the millions of people and businesses at the margins of adopting avoidance because is easy and worthwhile and by making it less easy by simplifying the tax code and less worthwhile by reducing the rates you move them into paying that tax rather than avoiding it. Net result is more actual tax collected.

You can quite simply plot this on a graph tax take v tax rate. All the experience shows that there is an optimum of maximum tax take and after that as tax rates rise the tax take (actual tax collected) falls off, actually becomes less.

In answer to your question, that is where the tax rate needs to be.

@JonathanPaige

@sithepi

As a reporter, I've been covering most of the UK Uncut events, and I can tell you that exactly what it isn't is 'the usual collection of people', if by that you mean SWP members and the like.

You are a journalist not a reporter. A reporter is one who reports what he sees and leaves it up the the reader/viewer to decide what it means. A journalist is one who interprets what he sees and presents his own views on what it means.

The primary reason for targeting Fortnum & Mason was tax avoidance.

Also, @sithepi, if UK Uncut bores you so much, why did you leap to comment on an article about them as soon as the opportunity presented itself?

@richesrant

you are right. you have to be a complete .... to be a member of UKuncut.

Actually, the people involved were led by those who had interests in smuggled tea, which they sold at inflated prices. The legally imported, taxed tea was cheaper than their wares, so it was about people who were profiteering from a black market wanting to preserve their profits.

That's a very interesting point, Silverwhistle. So who is really behind UK Uncut? Who is pulling the strings? What are their motives, I wonder?

kikithefrog

Perhaps you don't meet many right wingers? Or libertarian types? In some circles, I assure you, it's a commonplace saying.

It's true that a choose my company carefully, but a consider myself a libertarian albeit one of the left rather than the right.

WheatFromChaff

Erm ... yes you do.

Where, pray tell. Every time I've suggested reducing the price of booze and fags to the level of the continent I've been told by right wingers it would result in the end of civilisation.

GermanicusRex

What are you talking about? Every single tax take of every single sovereign nation at a set level of taxation is empirical evidence.

It sounds like you don't know what evidence is. Unless someone could calculate with absolute certainty the point on the Laffer Curve that an economy is on at any point in time and the point it would be on after a proposed changed it is simply wrong to say that there is empirical evidence of the validity of Laffer. All it shows with certainty is that the tax take a 0% is the same as it is at 100%; everything else in between is open to debate.

Taxation and benefit levels do strongly effect peoples behaviour and to think otherwise denies human nature but seeing as though many of the left wing policies need to do this in order to be implemented it is not surprising.

In extremis this is true but moving a tax rate up or down a few percentage points makes no difference.

JP

"I suspect more 'ordinary people' are willing to join in than you think."

You don't know any 'ordinary people' then.

I'll refer you to my friends who live in East London and who thought that AV was going to win because they were all voting for it. I've repeatedly tried to explain to them that trendy liberal views are not shared by the general population, but it takes something like the hammering that AV took to prove it to them.

And even then, CiF is hosting articles all about how AV only lost because of post-election Lib Dem perfidy, which didn't make any sense to me considering that the people I knew who felt most betrayed by the LDs were all still voting in favour of AV.

Like I said, it's a collective delusion.

@sithepi: No, I don't doubt that. What I doubt is whether what wheatie so neatly covered a couple of posts further on - who actually, ultimately, pays the taxes on corporations - is understood by the left.

EllsBells

Well, I fancied a bit of a fight and saw this as an opportunity to do so while maintaining a veneer of legitimacy via the use of political slogans and pretending that any violence or aggression was caused by somebody else.

Shit, turns out I am into peaceful protesting after all.

VIVA LA REVOLUCION!

randstad
27 May 2011 2:29PM

BlueLabour so your going to try and get more people onto already overcrowded buses , while what could go wrong with that idea !

No, it's an analogy. It was a GLC policy before Maggie binned them and I am using it to make a point about how you increase take up and revenue at the same time as lowering fares. Most people on the left know the policy worked. The buses were empty back then because the fares were expensive and poor value. Lowering the fares made it a no-brainer to take the bus. In fact my three flat mates and I used to take a cab from Millwall to Mile end because the combined taxi fare was less than the combined bus fare. The result for London transport was they got precisely no money whatsoever from us for that journey. But at 10p (this was back a while) and despite the obvious convenience of the cab, it became a no brainer to use the bus. Net increase in revenue for London Transport was 40p. So they cut the rate and increased their revenue because avoiding the bus fare no longer made sense. It was cheaper to pay the lower fare.

And yes the buses became crowded because everyone else did it as well and it cost LT hardly anything because the bus was running anyway.

GermanicusRex

27 May 2011 2:36PM
.........
Laffer is dismissed by those that politcally do not like the information that it shows....

Be careful what you wish for, or you will be including yourself next.

You started off by saying

Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology

Laffer's theory works both ways. It points to a desired optimum yield by moving rates one way or another - up as well as down.

It must follow that Laffer's theory envisages that some tax rates are sub-optimal and could rise and still raise more revenue.

But then you might not like taxes going up. And then you might dismiss Laffer as not suiting your political argument

Another reason to see you out on the March on Saturday.

UK UNCUT are absolutely right. Unless we do something about tax avoidance and evasion, we will lose our public services.

We lose around £120bn per year, and conservative and labour governments have not yet tackled it. The present government is making it much worse.

Look at these:

http://citywire.co.uk/new-model-adviser/tax-evasion-costs-treasury-15-times-more-than-benefit-fraud/a378274

http://www.bbc.co.uk/news/business-11927299

http://www.taxjustice.net/cms/upload/pdf/Development_Journal_-_CSR_to_the_Bottom_Line_-_SEP-04.pdf

@bluelabour i'm not convinced that there are millions of people out there avoiding taxes. i think that for most of the population there is no option except to pay your tax bill. referring to your graph of of tax take v tax rate, what exactly is 'all the experience'? As i understand it, taxes in the UK had a much higher top rate in the 1970s, and still are in countries like Sweden and Denmark. Are you saying there is a lower rate of actual tax collected there?

@ellsbells

Sorry it's taken so long to reply. Just to clarify, I don't think that Uk Uncut's strategy of occupying banks has been unsuccessful - far from it. What I am saying is that it will only hold the attention of the mainstream media for a certain amount of time. How much UK Uncut needs the attention of the MSM remains to be seen. Perhaps it will grow or evolve enough that coverage becomes an irrelevance.

Yawn, the prudes are obviously out in force today. I can't believe an inoffensive, tongue in cheek play on the headline was removed. Or has a perfectly routine surgical procedure and become a dirty word since I went to work this morning?

As I am usually on here decrying the naivety of UKUncut and pointing out that they have been attacking the wrong targets (Vodaphone does pay its UK taxes) I thought it politic if I suggested a genuine tax avoidance loophole that they should target.

It is relatively simple in the UK to avoid paying stamp duty when you buy a house. Very simply instead of buying it yourself, you set up an offshore company that you own, it buys the house and the company doesn't have to pay stamp duty. The company can then sell the house back to you at purchase price, again all tax-free.

There is a cost involved in setting up an offshore company so it doesn't make sense buying a £250,000 house but it makes financial sense for anything in the £1 million plus bracket.

So all these very rich foreigners buying all the £5 million + houses, or the £20 million flats in One Hyde Park, probably don't pay a penny in stamp duty.

That's something unfair that should be campaigned against. I'd be willing to join a march against this abuse of the tax system.

very briefly now

@generian - with respect, no. there is no such thing as an objective report (or reporter). everything is subjective. you may have noticed that a report in guardian on the same events will be different from one in the telegraph. or a report on the bbc differs from sky or al-jazeera. everyone has a bias.

@Shinsei

Now that is the sort of things we should be protesting against.

Personally I would massively restrict all non-resident ownership of property esp as people seem to see London as the hiding place for all their dodgy money and the place they can flee to when chickens come home to roost! Would keep London prices affordable for residents.

@generian - with respect, no. there is no such thing as an objective report (or reporter). everything is subjective. you may have noticed that a report in guardian on the same events will be different from one in the telegraph. or a report on the bbc differs from sky or al-jazeera. everyone has a bias.

Just because the dividing line between reporting and op-ed has been ever more egregiously violated doesn't mean that objective reporting is impossible to aspire towards or even to achieve.

Karl1976

But that's not what UKUcunt are about, is it?

Heh

JonathanPaige
27 May 2011 3:04PM
@bluelabour

i'm not convinced that there are millions of people out there avoiding taxes. i think that for most of the population there is no option except to pay your tax

Then you are mixing up avoidance with evasion. There are few actual evaders and that is a criminal offence any way and I am all for spening some to make some by going after them every bit as aggressively as they do benefit cheats (if not more) but plenty of avoiders.

The reason that the tax system is complicated is that it is used as social engineering. You hear it all the time, minimum alcohol price (to stop binge drinking) fuel escalator (to reduce emissions) ISA and pension wrappers (to encourage saving for retirement) Cigarettes duty (to reduce smoking).

So we are all dragged into avoidance schemes set up by the government. Take cigarettes. Nearly 10% of fags sold in the UK have avoided that duty because the high rates have discouraged smoking and made it worthwhile to smuggle fags. It doesn't help health either because those fags have god know what levels of toxins in them even compared to legitimate fags.

There is a point at which that smuggling activity and the willingness of people to buy illicit fags is reduced by the reduction in cigarette duty. Quite simply (and I am all for the smoking ban and am a non/anti smoker) the tax rate on fags is not optimised for revenue but for public health image management reasons.

If you want max tax take then we need to stop this sort of nonsense.

GermanicusRex:

Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology.

Great News. The recent reduction in corporation tax will result in a bigger tax take.

Good old empirical evidence!!!

Jonathan Paige:

i'm not convinced that there are millions of people out there avoiding taxes.

You think all the hundreds of thousands, if not millions, of people who work largely cash-in-hand as minicab drivers, plumbers, electricians, handymen, painters, hairdressers, childcare, ebay traders, car mechanics, gardening, weekend car boot salers, antiques dealers, stall down the market, doing some after school tuition, doing your daughters' wedding photos for £300 all declare all their income.

Really ?

Why do you think every week on The Apprentice tradesmen get asked for a discount "for cash" ?

Has anyone here ever not paid for some product or service knowing full well it wasn't going to go through the books ?

JonathanPaige

I realise that you are a mere wage slave, be it a reporter or a journalist, and that it is more that your job's worth to comment on the corporate tax affairs of your employer.

However it would be useful sometime if an executive of the GMG would say on here what their position is concerning the GMG's tax affairs.

The longer this continued silence persists, the more I come to think the position must be morally indefensible

greendragonreprised

Erm ... yes you do.

Where, pray tell. Every time I've suggested reducing the price of booze and fags to the level of the continent I've been told by right wingers it would result in the end of civilisation.

You must know some very strange right wingers.

Adam Smith Institute;

Institute of Economic Affairs;

Freedom Association.

That enough to be going on with?

JonathanPaige:

what exactly is 'all the experience'? As i understand it, taxes in the UK had a much higher top rate in the 1970s, and still are in countries like Sweden and Denmark. Are you saying there is a lower rate of actual tax collected there?

I hope I'm wrong, but I get the impression that this is new to you.

I do not claim to be any sort of expert, but Wikipedia has a reasonable discussion at the time I write this. Of course being Wikipedia it might change, but for what it's worth: link to Wikipedia page on the Laffer curve

There are different Laffer curves for different taxes and different countries, and effects are often highly subject to debate - for instance a tax is rarely raised or lowered in isolation - it might happen as a result of a crisis, or one tax might be raised and another lowered at the same time.

The other one you need to look at is Tax incidence.

JonathanPaige
27 May 2011 3:04PM
@bluelabour

As i understand it, taxes in the UK had a much higher top rate in the 1970s, and still are in countries like Sweden and Denmark. Are you saying there is a lower rate of actual tax collected there?

Yes!

But they focus their spending on beneficial items like education, don't have large populations left behind by rust belt industries. In the case of Norway they have massive oil revenues, in general plenty of land and are parked next to the biggest consumer market by spend in the world the EU. So not comparable.

France is a better example. If you ever lived in France as I have then the sheer level of evasion let alone avoidance is staggering compared to the UK.

GermanicusRex

"Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology."

Interesting that this old saw should be wheeled out. Where is this "empirical evidence"? I think you are referring to work around the Laffer Curve (http://en.wikipedia.org/wiki/Laffer_curve). If you have a look you will see that it is not as simple as" less tax more revenue", it is actually a case of there being an optimal tax rate which is less than 100%. Also, you will see that some research, that is "empirical evidence", shows that the optimal tax rate might be as high as 70%. So we have some room for maneuver - particularly for the tax dodging offshore corporates who are paying single figures on their profits.

It appears that you certainly were not letting facts get in the way of your idealogy.

Wouldn't you say?

It's always interesting to see which articles garner the most rightwing vitriol. An interesting pattern emerges where the first comments are consistently negative, often followed by more balanced views. I often suspect astroturfing. In any case, don't let the bastards get you down! Take it as a compliment: they must feel threatened, otherwise they would ignore UKUncut and this article.

I was at a UKUncut protest and I have to say, the shopping public were very supportive and interested. I didn't have to hand out leaflets, the shoppers approached me and asked for them! Ignore the trolls - the public are indeed supportive.

And let's not forget, David Cameron wanted Big Society. Well, this is giving him his Big Society in a humourous and thoughtful manner. Good luck UKUncut!

To quote Mises:

"All those not familiar with economics (i.e., the immense majority) do not see any reason why they should not coerce other people by means of force to do what these people are not prepared to do of their own accord."

shinsei

27 May 2011 3:19PM
......You think all the hundreds of thousands, if not millions, of people who work largely cash-in-hand as minicab drivers, plumbers, electricians, handymen, painters, hairdressers, childcare, ebay traders, car mechanics, gardening, weekend car boot salers, antiques dealers, stall down the market, doing some after school tuition, doing your daughters' wedding photos for £300 all declare all their income.

Thankyou for reminding us that fiddling your taxes is not the sole province of the rich, and that clamping down on it would not be wholy progressive.

But two things to keep it in context:
HMRC's estimate of losses due to the Shadow Economy accounts for only a small proportion of the total tax gap; and DWP estimate of benefit fraud is one seventh of the tax gap.

WheatFromChaff

You must know some very strange right wingers.

Adam Smith Institute;

Institute of Economic Affairs;

Freedom Association.

That enough to be going on with?

Thanks for that. I'm genuinely pleasantly surprised at what I read on the links. Odd that none of their suggestions on this have ever been taken up by those in power of either party.

shinsei
27 May 2011 3:19PM
Jonathan Paige:

i'm not convinced that there are millions of people out there avoiding taxes.

You think all the hundreds of thousands, if not millions, of people who work largely cash-in-hand as minicab drivers, plumbers, electricians, handymen, painters, hairdressers, childcare, ebay traders, car mechanics, gardening, weekend car boot salers, antiques dealers, stall down the market, doing some after school tuition, doing your daughters' wedding photos for £300 all declare all their income.

Really ?

Why do you think every week on The Apprentice tradesmen get asked for a discount "for cash" ?

Has anyone here ever not paid for some product or service knowing full well it wasn't going to go through the books ?

You are right and loads of businesses are at it. I know the cafe owner near me that is oft seen buying stock in Lidl and paying cash (cheap but not as cheap as the cash and carry) Why? Because that stock isn't on the cash and carry receipt. As he sells the meals he makes with cash that can't be traced through the books.

eg he buys enough stock from C&C to make 100 portions of Lasagne. and pays cash for ingredients for 50 portions more from Lidl. Sells 150 portions for £5 each making £750 in revenue but he can take £250 quid straight out of the till and into his back pocket and even if the tax man went over his business with a fine tooth comb they'd never know?

Happens every day. Mind you that's evasion. Like shinsei says 20% off for cash is not uncommon at all.

Can you see these pillocks waving a banner proclaiming that NATIONALIZATION
was the only hope for Britain..........just as Attlee did in the 1940's....pigs might fly

I'm looking forward to their national day of action tomorrow- transforming banks into hospitals to show how it's banks that need reform and the NHS that needs a bail-out.

Should be a lot of fun for not particulalry well-paid bank clerks trying to do their jobs and ordinary working people trying to get some money to do a bit of shopping on their day off.

greendragonreprised

Where, pray tell. Every time I've suggested reducing the price of booze and fags to the level of the continent I've been told by right wingers it would result in the end of civilisation.

I think you will find that most of arguments made against reduction of Tax on Booze and Fags b right wingers are moral arguments not economic ones. Namely that the plebs can’t be trusted not to drink themselves to oblivion and thus we need high taxes on vices to protect us from ourselves.

@Germanicus

Whilst I agree in principle with the idea of a ‘laffer curve’, it isn’t provable by evidence in a scientific sense. There are too many different things happening in an economy, and too many differences in tax rates, duty rates and other incidental taxes which have an impact to say that a personal tax take and a corporate tax take can be called ‘evidence’. Correlation is probably the best one can hope for.

Hell, if I had a say in tax regime I’d pay everyone in the country a flat salary of £5k a year (plus 3k for first child under 18, 2k for second child, 1k for third child, then no more). Set the lower earnings limit at 0, with a 25% tax rate, and the upper earnings limit at 40k at 40% and keep the 150k threshold but at 45%. No out-of-work benefits, the only means tested benefit you can get is for disability, and the only other supports you can get are for housing (and only for a limited period if you don’t have dependents). You’d also be liable for your own council tax (deducted at source). Abolish NI as a separate tax. Corporation Tax at exactly the same rates and thresholds.

That way, work always pays more than no work. If you choose to be idle, or you can’t find a job for a period of time, you’ll be kept at a subsistence level.

Thus if you had a 15k a year job you’d pay 3.75k in tax, so your take-home would be £16,250. If you have a 50k a year job you’d pay 14k in tax, so your take-home would be 41k. The tipping point for personal taxation actually being ‘contributory’ would be £20k. It’s not dissimilar to the present position, but without all the bloody complicated and expensive to administer tax credits.

There’s also no need to set yourself up as ‘a company’ (and run the IR35 gauntlet) as there’s nothing to be gained from doing so.

Sorry, I digress...

everyone has a bias.

Yes, JP, but a good reporter/journalist is professional enough to be able to hide it when writing a news report rather than an opinion piece.

DrJazz

Great News. The recent reduction in corporation tax will result in a bigger tax take.

If a lower rate attracts more businesses, more businesses will then be paying tax and so more tax will be collected. Is it really that complicated?

UK Uncut has achieved a quite astonishing level of prominence in a shockingly short amount of time.

Recuperation? After all they helped the biggest Trade Union March in a very long time to be reported as a failure, without any reference to the actual event.

Which of course was joyous, diverse, with co-mingling between committed anti-cuts trade unionist with colleagues, families and friends from all over the country Marching together.

Instead wall to wall news coverage of A tiny minority doing a bit of spray painting, sitting on the floor of a shop and later doing a bit of bin pushing over-ing. Then being herded and arrested by the police without the police even breaking a sweat. You can't buy that kind of positve media message or maybe you can? who runs/coined/started UK Uncut TM?

nhsworker:

I was at a UKUncut protest and I have to say, the shopping public were very supportive and interested. I didn't have to hand out leaflets, the shoppers approached me and asked for them! Ignore the trolls - the public are indeed supportive.

That's because most people hate unfairness. UKUncut tells the "man or woman in the street" (who don't read the business pages of broadsheets) that Vodaphone has avoided paying £6bn of taxes.

Of course the shopping public are going to be outraged.

What UKUncut don't do is point out that they are only guessing Vodaphone hasn't paid £6bn, and that they have no evidence for this, and that HMRC (the people who should know) says Vodaphone hasn't avoided any UK taxes.

The shopping public are also usually outraged when reading Daily Mail stories of single mums with six kids getting a £400,000 house and a 50 inch telly.

@ArbuthnotPedant

Thankyou for reminding us that fiddling your taxes is not the sole province of the rich, and that clamping down on it would not be wholy progressive.

But two things to keep it in context:
HMRC's estimate of losses due to the Shadow Economy accounts for only a small proportion of the total tax gap; and DWP estimate of benefit fraud is one seventh of the tax gap.

Really

HMRC estimate of inaccurate return from individuals is £5.8bn but could be up to £10.8bn (so people who decalre some income but not all)
Estimate of ghosts £1.3bn up to £3.9bn (people who delare no income)
Estimate of moonlighters £1.8bn to £3.6bn (people who declare one job but not another)
Estimate of SME tax evasion £2.6bn up to £5.1bn
Estimate of VAT evasion £15.2bn

These are the components where the grey economy hides and total £26.7bn of the £42bn annual tax gap, and could be another £12bn higher.

Compare this to the individual avoidance estimate of £1.4bn to £2.1bn or the lasrge company avoidance estimate of £2.9bn.

Maybe you need to reconsider that it actually isn't just the rich, and you can see that by looking at what categories of people HMRC taregts with amnesties, the most recent being doctors and plumbers where there is massive evasion.

greendragonreprised

Thanks for that. I'm genuinely pleasantly surprised at what I read on the links. Odd that none of their suggestions on this have ever been taken up by those in power of either party.

It's because they are an "easy" tax to levy - incurring far less fallout, politically speaking, than raising income tax - and the smuggling hasn't (yet) made a significant enough dent in the revenues raised to warrant attention.

@shinsei

Absolutely spot on.

randstad

BlueLabour so your going to try and get more people onto already overcrowded buses , while what could go wrong with that idea !

Nothing. They then leave their cars at home, making way for an even better, further expanded bus system, which is far less polluting - it's a virtuous circle.

It would really be great to see the Yes-Men do one on Piper Alpha!
I lost a couple of mates in that disaster.

An article about the YES Men would be a better way to explain things...

shinsei:

Let's say you're right about that particular example. It still wouldn't invalidate UKUncut's general principle. Also, I never used the word "outraged". People weren't outraged. They were just generally supportive of the idea that such awful cuts wouldn't be necessary if we closed tax loopholes and clawed back some of the billions we gave to the banks.

@SoundMoney

Nothing. They then leave their cars at home, making way for an even better, further expanded bus system, which is far less polluting - it's a virtuous circle.

Whilst a nice idea in principle, I am not sure that you could run more buses on some routes in London without turning them into bus parking lots! The only real answer is more high rise aprtments closer to where people work, meaning less commuting.

@nhsworker

Let's say you're right about that particular example. It still wouldn't invalidate UKUncut's general principle. Also, I never used the word "outraged". People weren't outraged. They were just generally supportive of the idea that such awful cuts wouldn't be necessary if we closed tax loopholes and clawed back some of the billions we gave to the banks.

Shinsei is right about that example, but you are right that we could close a lot of tax loopholes and improve the tax collection system. We all need to stop paying for things in cash, that wuld be a great start. When I wanted to get some building work done, every single quote I got included a big discount for cash.

As for the billions to the banks, at the moment it is self funding, i.e it is having no effect on the deficit and hence no effect on the cuts.

speedfriend:

The trouble is that UKUncut don't believe HMRC's estimates of the tax gap. They think, based on work by a trade union think tank and a former accountant, that instead of being £40bn it is nearer £150bn.

And, obviously, the difference between HMRC's figure and their figure is entirely fat cat/super rich tax avoidance.

@Shinsei

I have unfortunately read the work done by Richard Murphy for the TUC on the tax gap and it represents half an hour of my life I will never get back. Its main calculation is based off the fact that if £15.2bn of VAT is being avoided, then an amount of profit attached to this is also being avoided, and that accounts for the big increase in the tax gap. Pretty spurious and equivalent to sticking a finger into the air. The report of course fails to draw the conclusion that VAT evasion is mostly by self employed/small business not the rich and hence even the big tax gap they come up with, must be by the same people (not to mention the fact that GDP must be under stated by £250bn odd!!!)

The Tax Research blog is worth a read for entertainment value!

nhsworker:

Let's say you're right about that particular example. It still wouldn't invalidate UKUncut's general principle. Also, I never used the word "outraged". People weren't outraged. They were just generally supportive of the idea that such awful cuts wouldn't be necessary if we closed tax loopholes and clawed back some of the billions we gave to the banks.

Apologies for suggesting you used the word outraged.

I'm all for closing tax loopholes. As I mentioned upstream I suggested the stamp duty loophole that should be closed and would bring in 100s of millions.

But what tax loopholes are UKUncut demonstrating about ? The companies you target aren't using tax loopholes. You are completely mistaken and unfair about Vodaphone. And you don't, as far as I am aware, demand a change to the law so that UK citizens resident in foreign countries should pay tax back to the UK (as seems to be your beef with Mrs Green).

Banks ? Well, we all think banks behaved badly and bankers don't deserve their bonuses. But are banks really avoiding taxes. The reason Barclays didn't pay much tax this year is because it made a loss the previous year and every company in the UK, from the smallest to the largest, is allowed to offset profits against previous losses. You aren't seriously suggesting that tax loss carry-forwards is a tax loophole you want rid of. It would bankrupt the country overnight if you did.

And I doubt this is explained in UKUncut literature. You just add to the popular banking resentment with unevidenced or false accusations. And how do High St bank staff feel about being pariahed in this way. They aren't responsible for the incompetence of Sir Fred Goodwin.

Here's another tax loophole you should campaign against. The fact that private equity funds are allowed (I won't go into all the technical details why) to take income but declare it as a capital gain, and thus avoid paying 50% income tax but instead only 28% capital gains tax.

This tax loophole was actually introduced by Gordon Brown (whose best friend after Ed Balls, was Sir Ronnie Cohen, a private equity billionaire) and in those days capital gains tax was even lower (10%).

And tax loophole number three you could deal with. And this is the biggie.

The entire structure surrounding trusts.

I'm at the limits of my knowledge of tax law here, but as I understand it the wealthy put their assets into a trust that their beneficiaries (ie their children and grandchildren) can draw on as they need to in the decades ahead. The income from the trust is taxed as it is released but the capital and re-invested income is protected from capital gains tax and inheritance tax.

Thus the wastrel children and grandchildren of a successful and hard-working entrepreneur live in houses owned by the family trust and have their school fees paid by their family trust and get an allowance so that they can hang around Notting Hill and pretend to be DJs or photographers or jewellery designers.

All effectively paid for out of a large tax-free family pot.

.

And tax loophole number 4

Non-doms should pay more than the current £30,000 levy.

Roman Abramovitch pays £30k to HMRC, council tax, VAT on his shopping purchases and excise duties on his petrol, fags and booze.

And that's it. He isn't required to pay any income tax or capital gains tax or inheritance tax.

Look at the Sunday Times Rich List. They are all non-doms.

Tax them for the pleasure they get in basing themselves in the UK.

@Shinsei

Tax them for the pleasure they get in basing themselves in the UK.

More like Tax them for the protection they get in basing themselves in the UK.

The only problem with this idea is that it has been the influx on non-doms that has kept the London housing market and Sterling strong

Alan - this is hardly NYT standard - it reads more like a juvenile, 70's polytechnic undergraduate rant.

@speedfriend:

The only problem with this idea is that it has been the influx on non-doms that has kept the London housing market and Sterling strong

.

I'm not suggesting that my tax loophole suggestions don't have negative consequences but if I was involved with UKUncut these are the areas that I would target.

They are issues that are largely popular, achievable, cheapish to implement, not involve international agreement and can be dealt with simply via legislation.

When are they protesting outside the offices of GMG?

Or do they only protest against the employers of 'ordinary people', like retailers.

What about protesting against the 9000 public sector workers earning more than the PM? Let me guess guardianistas, its because they are worth it.

How protesting against the public sector workers who are paid by the taxpayer to work full time as trade unionists.

The taxpayer does not want higher taxes and punitive punishments against wealth creators.

You are out of step, like you were on AV, the Royal Wedding etc

My problem with Uk Uncut is the fact that they only surfaced once the economy tanked and cuts were required.
I don't think that this lot ever gave a tuppeny toss about tax avoidance until it suddenly dawned on them that their own lives would be affected by cuts to benefits, grants or public service jobs.
Self-centred and egotistical !

This year, the Yes Men worked with US Uncut to put out a press release as General Electric, picked up by AP, saying the company would return its entire 2010 tax refund of $3.2bn to the US Treasury. As a result, GE's market value briefly slumped by $3.5bn.

Sigh, GE didn't get a tax refund of $3.2B from the Treasury. Would you please correct this, as it will look like the protesters are financially inept dullards.

(GE does carry forward losses from previous years to offset against profits, like every other business in the world).

ArbuthnotPedant

I would always argue for lower taxes as it promotes economic activity but not to the extent that it detracts from worthwhile and needed government programs but this point of taxation level is a great deal lower than the levels we have today.

High taxation, bureauracracy, red tape, unending unemployment laws all are disincentives to economic activity and prosperity but that is all we get from government as they are all about power and building their own empires. A perfect example of this was the banking bailouts, Northern Rock and HBOS should both have been told to find a private sector buyer or go bust, that was the economic thing to do unfortunately the decision was made by politicians so we got the politcal solution not the economic one so we are now lumbered with zombie banks with biliions of toxic debts and worthless assets on their books.

unending unemployment laws

unending employment laws....!

Still no edit function :(

"Before the hoax was discovered, Dow's stock lost $2bn in value. GE's market value briefly slumped by $3.5bn."
And let us hope that the people whose pension funds had invested in these stocks were abke to smile at the antics of these pretend revolutionaries as after working for 40 odd years they ended up with nothing to show for it.

@shinsei

And tax loophole number three you could deal with. And this is the biggie.

The entire structure surrounding trusts.

I'm at the limits of my knowledge of tax law here, but as I understand it the wealthy put their assets into a trust that their beneficiaries (ie their children and grandchildren) can draw on as they need to in the decades ahead.

Trusts are a very useful vehicle that has existed since ancient times.

It is the legal saperation of ownership (Trustee) and Setlor (often also the beneficiary).

And the need for trusts has always been to protect ones assets from tyrannical governments who'd confistcate the wealth of their citizens.

UK Uncut are stupid fools who don't know history or whose side they really are.

@xxxl

Sigh, GE didn't get a tax refund of $3.2B from the Treasury. Would you please correct this, as it will look like the protesters are financially inept dullards.

I don't really see what needs to be corrected. is it the wording you have a problem with? would you prefer 'rebate' or 'credit'? the AP story ran it as 'refund'.

@edwardmonton: Yes. I wondered about that. then I realised that UK Uncut don't give the proverbial about investors making losses - just as long as they don't make profits (of which, like all lefties they basically disapprove). I hope that they get sued, because I do believe it is actually illegal to do that sort of thing.

''What use is it to accept responsibilites when talkin', walkin', noddin', tossin', nothin' gets solved?''
''Most of us are tryin' to be Optimistic but end up Pessimistic and its no use sulkin'?''
''Political Parties are competent in organising polls and elections but only 2.6 Parties get to Govern, don't be suprise they are those among themselves, the some lot of them more or less ?''
''Our voices and opinions are notin' but wispers and petty gestures, they need our votes, but in the end we have no say about them signing contracts, Deeds, or Pass Acts and regulations, and ain't we just like Ping Pong Balls to the MP's and Lords who have let British People down time after time?''
''If those who ain't able to solve economic crisis, provide citizens the basic needs and standards, it would be an honourable gesture to step down and would certainly be British Interest and like to see the colliasion disolved and let people the freedom, let True Democracy and talk nothing of leading the world as British have lttle say and are taking side like America who once fought the Independence, lets not talk history but our future in out own hands?''
''Theres no honour in exploitation, oppression, and cattling individuals which are an embarrassment upon those who does.''
''Godspeed!''

@GermanicusRex

Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology.

There is no empirical evidence for any macro-economic theory because you don't have a control group. There may be qualitative arguments that increasing taxes doesn't necessarily increase the tax take, but unless you can show us the equation of the Laffer curve, you don't have a quantitative argument.

Without that, saying "lower taxes and revenue will increase" is just guesswork because you don't know which point on the Laffer curve we are currently at.

This is why economics is called a "social" science - it can't meet the standards of hard science.

You UKUncutters would have more credibility if you weren't using a known tax-evading organisation for all your PR.

EvilTory:

"I realised that UK Uncut don't give the proverbial about investors making losses - just as long as they don't make profits (of which, like all lefties they basically disapprove). I hope that they get sued, because I do believe it is actually illegal to do that sort of thing."

LOL, and if you will, FFS.

Lefties are not against profits. They are against the privatisation of profits and the nationalisation of losses.

Let me explain; it'll help you.

See, over the past 10 years the banks produced 50m a year in taxes, which was nice. When they went bust, it cost us 850bn. I'm sure you can do the math. Now, the difference between a Leftie and a Rightie is this:

A Leftie doesn't think a loss of 350bn is good business.

FluffyToes:

"You UKUncutters would have more credibility if you weren't using a known tax-evading organisation for all your PR."

And you would have more credibility if you had an opinion, instead of just balloon-bursting on behalf of Tory Central Office.

Also, FluffyToes, didn't you notice that most of the people posting on this thread are uberTories who love the banks and hate the citizenry?

Let me explain; it'll help you. See, over the past 10 years the banks produced 50m a year in taxes, which was nice. When they went bust, it cost us 850bn. I'm sure you can do the math. Now, the difference between a Leftie and a Rightie is this: A Leftie doesn't think a loss of 350bn is good business.

Its not about left and right. The "banks" also employed alot of people who paid tax and used alot of services which are taxed. So in effect they paid alot more tax than you suggest.

Having said that the damage they did without being held to account is appalling.

There is no empirical evidence for any macro-economic theory because you don't have a control group. There may be qualitative arguments that increasing taxes doesn't necessarily increase the tax take, but unless you can show us the equation of the Laffer curve, you don't have a quantitative argument. Without that, saying "lower taxes and revenue will increase" is just guesswork because you don't know which point on the Laffer curve we are currently at. This is why economics is called a "social" science - it can't meet the standards of hard science.

The level of tax revenue depends on how many are paying and how much they each pay. As you tax more various legal tax avoidance schemes become viable and also after a point more and more people will start using various illegal means to avoid paying tax. As you lower tax there is less avoidance but eventually your tax take collapses. The difficult task is to find the right balance in an economy that is continually changing while still providing the essentials the market alone would not provide.

On the subject of UKUncut, I think it is doing very well indeed as a collective. It just needs to keep fighting the good fight whilst ignoring the Tory astroturfers.

It's a movement that can run and run; perhaps by developing a political movement around its core arguments, it can garner even more support? Millions are sick of the same old Tory and Labour ******s. We need alternatives.

OpenComment: good posts, although one small point is that tax avoiders will avoid tax whether your take is low or high. They should not be allowed to. If they flee the UK in tears because we expect them to pay their way, then sod 'em. There are lots of things wrong with 21st century capitalism, but one of the good things is that, if a company f*cks off, another one will take its place in the market.

that's the same bollocks logic that says that if you bring in £100bn in tax when the rate is 40%, you'd bring in 150bn if the rate was 60%. It's perfectly clear what GermanicusRex is saying, it is that there is an ideal point where you can maximise tax revenue, and above and below that level of tax you will either fail to collect enough tax because the rate is too low, and above that rate people will take more steps to avoid it (one of which is not bothering to go to the effort to earn the taxable profit in the first place).

I understand the laffer curve, the point is that many commenters simply operate from the starting position that we are already taxing beyond the optimal point. It's an unsupported claim. If it isn't, it would be nice if they would provide some support for once.

as the comments seem to be slowing down a bit, maybe I could take this opportunity to make some observations.

shinsei's comments on stamp duty are worth repeating, i think:

It is relatively simple in the UK to avoid paying stamp duty when you buy a house. Very simply instead of buying it yourself, you set up an offshore company that you own, it buys the house and the company doesn't have to pay stamp duty. The company can then sell the house back to you at purchase price, again all tax-free.

There is a cost involved in setting up an offshore company so it doesn't make sense buying a £250,000 house but it makes financial sense for anything in the £1 million plus bracket.

So all these very rich foreigners buying all the £5 million + houses, or the £20 million flats in One Hyde Park, probably don't pay a penny in stamp duty.

That's something unfair that should be campaigned against. I'd be willing to join a march against this abuse of the tax system.

and i think the size of the grey economy needs closer investigation too. if it is on the scale suggested (£26bn a year, i think) then it seems many people feel they have no moral obligation to pay taxes - presumably everyone assumes everyone else will pick up the slack.

@whizgiggle

the point is that many commenters simply operate from the starting position that we are already taxing beyond the optimal point. It's an unsupported claim. If it isn't, it would be nice if they would provide some support for once.

yes, i'd be quite interested to see this too.

We are fiddling while Rome burns. The author's solution is to add another fiddler?

zanzibar

"See, over the past 10 years the banks produced 50m a year in taxes, which was nice. When they went bust, it cost us 850bn. I'm sure you can do the math. Now, the difference between a Leftie and a Rightie is this:

A Leftie doesn't think a loss of 350bn is good business."

I'd regard that as evidence that 'lefties' have no idea what the net cost of the bank bail out is likely to be(latest estimate is about 2% of the quoted figure) and probably don't understand that a guarantee is not a cost but a liability risk.

@ZanzibarLafayette

OpenComment: good posts, although one small point is that tax avoiders will avoid tax whether your take is low or high.

Its not so black and white as that, there is a gradient.

The higher you raise taxes, the more profitable it becomes to avoid it.

@JonathanPaige

and i think the size of the grey economy needs closer investigation too. if it is on the scale suggested (£26bn a year, i think)

Very optimistic, a lot of it is sale of tobacco and alcohol and drugs mainly.

Also, just because it is estimated at 26 billion £ doesn't mean you can get the tax revenues from it too. As a lot of that will be for products that don't have a legal market or the demand is not elastic.

JohnathanPaige:

re Shinsei's comments, I entirely agree. It is strange that the Conservatives, like Labour, love to entice wealthy foreign businessmen to the UK, always assuming that the UK will somehow benefit.

We all know that it ain't necessarily so. It depends what they buy, and how.

federalexpress:

"I'd regard that as evidence that 'lefties' have no idea what the net cost of the bank bail out is likely to be(latest estimate is about 2% of the quoted figure) and probably don't understand that a guarantee is not a cost but a liability risk."

Nobody knows what the cost will be, least of all the plutocrats who support the banks against the citizenry and believe that the economy is more important than the human beings being crushed by it. But then, I'm a Lefty, and I would say that.

JohnL0cke:

"The higher you raise taxes, the more profitable it becomes to avoid it."

Indeed, but I'm sure most tax-avoiding parasites would avoid it even if it was one pence per million.

@ZanzibarLafayette

JohnathanPaige:

re Shinsei's comments, I entirely agree. It is strange that the Conservatives, like Labour, love to entice wealthy foreign businessmen to the UK, always assuming that the UK will somehow benefit.

I'd rather have one wealthy immigrant than 100 poor immigrants that will abuse the welfare system and bring their dependents too!

@ZanzibarLafayette

federalexpress:

"I'd regard that as evidence that 'lefties' have no idea what the net cost of the bank bail out is likely to be(latest estimate is about 2% of the quoted figure) and probably don't understand that a guarantee is not a cost but a liability risk."

Nobody knows what the cost will be, least of all the plutocrats who support the banks against the citizenry and believe that the economy is more important than the human beings being crushed by it. But then, I'm a Lefty, and I would say that.

The real cost is the asset guarantee multipled by the probability that the assets of the nationalised banks (house prices mainly) are lower than the liabilities (savings deposits and stockholder value).

So we shall wait and see, but the number is very likely to be a fraction of the maximum number you've quoted.

So if I were you, I'd refrain from such propaganda.

"The higher you raise taxes, the more profitable it becomes to avoid it."

Indeed, but I'm sure most tax-avoiding parasites would avoid it even if it was one pence per million.

Not at all, i'll give you a simple example of buying cigarettes - if the duty is too high more people would either buy it illegally or stock up on duty free as much as possible.

If the difference is £1 per packet, I won't really bother but if it is £3 then I might consider it seriously.

zanzibar

"Nobody knows what the cost will be, least of all the plutocrats who support the banks against the citizenry and believe that the economy is more important than the human beings being crushed by it. But then, I'm a Lefty, and I would say that."

Sorry but I'm not letting you off that easily.

If no-one knows what the cost will be, why assert it is £850 billion?

Here's the very latest calculation, some 15 billion Euros.

http://www.bloomberg.com/news/2011-05-25/france-s-taxpayers-profit-from-banking-bailout-chart-of-the-day.html

The banking sector is still in urgent need of reform but unfortunately for you, I am the poster on here who pursues those who, whether through ignorance or intent, attempt to pass off all our fiscal problems on the bailing out banks.

You need to find another reason, perhaps the correct one ....

JohnL0cke:

"I'd rather have one wealthy immigrant than 100 poor immigrants that will abuse the welfare system and bring their dependents too!"

Whoops - showed your true colours there, LOL. What makes you think the UK gets ANYTHING from wealthy immigrants? And what makes you think it is immigrants abusing the welfare system and not a bunch of English WASPs? Oh, I see. The Mail again, eh?

"So we shall wait and see, but the number is very likely to be a fraction of the maximum number you've quoted."

I hope so, I really do. But then, economic forecasts aren't always right, are they?

"i'll give you a simple example of buying cigarettes"

Plenty of people got their fags in France before the cost went through the roof. A bit like saying that if we reduced the price of things enough, there'd be no theft. I take your point, but I think mine's equally valid.

federalexpress:

"The banking sector is still in urgent need of reform but unfortunately for you, I am the poster on here who pursues those who, whether through ignorance or intent, attempt to pass off all our fiscal problems on the bailing out banks."

LOL, why "unfortunately"? I have absolutely no problem with you turning your formidable intellect on the problem of identifying the true reason for the crash. Be my guest. It's what everyone should be doing. I must admit though, I find it strange that you are spending so much time and energy defending the banks though. Aren't there bigger victims in all of this who could use your help?

@shinsei

And tax loophole number 4

Non-doms should pay more than the current £30,000 levy.

Roman Abramovitch pays £30k to HMRC, council tax, VAT on his shopping purchases and excise duties on his petrol, fags and booze.

And that's it. He isn't required to pay any income tax or capital gains tax or inheritance tax.

Look at the Sunday Times Rich List. They are all non-doms.

Tax them for the pleasure they get in basing themselves in the UK.

I have been following your posts and whilst you are clearly a man of sense, you have this one wrong. It really is not as simple as you make the case to be.

Firstly, it is not only your domicile which solely indicates your liability to taxation. Your residence and ordinary residence are also determinants.

Secondly, as a non-dom you are required to pay tax on UK assets or income. To use Abramovich as an example, whilst I am not fully privy to his financial deals, certainly when Chelsea FC starts to make a profit he will be fully liable for taxation on those profits. Not to mention, remittances to the UK can be eligible for taxation.

Finally, there really isn't that much scope for increasing the non-dom levy. Whilst the exact numbers of non-doms is not publicly known, respectable estimates range from between 100000 to 150000. Do you really think they are all Ashcrofts or Abramovichs or multi-gazzilionaires?

You would be really surprised about the number of perfectly ordinary people who work internationally who find themselves becoming non-domiciled to the UK. We're not talking jetsetting internationals, we're talking engineers, IT contractors etc earning less than 6 figure salaries. Whilst tinkering around with the levy may bring a marginal gain to the Treasury, there really ain't no pot of gold at the end of the rainbow.

Not to mention, heavy handed approaches to altering the levy will further undermine confidence in UK Tax policies. For a small gain, ultimately you may risk doing far more long term damage....

@ZanzibarLafayette

"I'd rather have one wealthy immigrant than 100 poor immigrants that will abuse the welfare system and bring their dependents too!"

Whoops - showed your true colours there, LOL. What makes you think the UK gets ANYTHING from wealthy immigrants?

Because poor / unskilled people don't start companies or employ people.
They are at a net loss to the taxpayer.

This is why a country like Switzerland has a strict immigration policy and only lets in people who they think would be a net gain.

"So we shall wait and see, but the number is very likely to be a fraction of the maximum number you've quoted."

I hope so, I really do. But then, economic forecasts aren't always right, are they?

No but quoting the maximum number without understanding it will be lower than that in reality is intellectually dishonest.

"i'll give you a simple example of buying cigarettes"

Plenty of people got their fags in France before the cost went through the roof. A bit like saying that if we reduced the price of things enough, there'd be no theft. I take your point, but I think mine's equally valid.

There was far more tax avoidance going on when the marginal rates were upto 90% in the 70s in the UK.

This is what caused the emergence of tax havens like Jersey, and Cayman islands.

What's the point in working if 90% of it was being taken away from you?

zanzibar

"I find it strange that you are spending so much time and energy defending the banks though."

I certainly don't. That's just another false conclusion you've jumped to. I regard them as a cartel that needs breaking.

On the other hand, I also think it is important to cut through all the bullshit around this issue. Our problems, fiscally at least, have been caused by the recession, not by the bank bail out. That in turn was triggered by the banks, but they were not the cause of it. Over leverage is the root cause, on the part of public, government and business.

Why does this matter? Because if you don't understand the problem, or mis-diagnose it, as you and so many on here do, how can you possibly expect to find the solution?

@ GermanicusRex.......I don't care they should still pay, it's the principle!

Oh please don't encourage these morons.

On their website it hilariously claims that £95bn could be found by tackling tax dodging. You can't take seriously anyone who makes such absurd claims.

Not only that, even if it was true it wouldn't really help. Taking a further £95bn out of the economy in tax to pay off debt would cause about as much unemployment and recession as the same amount of public sending cuts.

These children have no interest in getting their facts right or in arguing for a coherent alternatve to the government's economic policies. Their brainless amateur dramatics aren't achieving anything.

Re; No 2 on your list ..erm ..the violence was absolutely NOT regrettable ... pity we hadnt used more in those vicious years ...

Boring! Yes. I'm bored out of my mind by people pretending that UK Uncut's actions are going to make any difference, just like all the other "peaceful ideological resistance" groups who don't seem to have got the message that this stuff doesn't work.

Peaceful protestors have recently overthrown 2 dictatorships, and are in the process of removing many more.

How about you go back to sleep grandad, it seems a little effort is beyond you.

A case in point .... the supposed right-wing voice of the majority could only muster 350 people to their rally for the cuts. Meanwhile, disabled people, many of them in wheelchairs managed to bring over 20 times the numbers.

If mass peaceful protest does not work, then why does the government do everything in it's powers to dissuade people from doing it ... you know the answer

"Once inside, they threw hundreds of dollar bills down on to the trading floor and watched the frenzy below as the bankers fought each other to grab them."

Well, that would be hilarious if true. Unfortunately, it seems to not be. From the article's own link to this story:

"Immediately, the group of pranksters began throwing handfuls of one-dollar bills over the railing, laughing the entire time. (The exact number of bills is a matter of dispute; Hoffman later wrote that it was 300, while others said no more than 30 or 40 were thrown.)
Some of the brokers, clerks and stock runners below laughed and waved; others jeered angrily and shook their fists. The bills barely had time to land on the ground before guards began removing the group from the building, but news photos had been taken and the Stock Exchange "happening" quickly slid into iconic status. "

Nothing there about the stockbrokers scrambling to pick up the bills, is there? The only other place I could see making this claim was Wikipedia, which likewise failed to source the claim. I would hope that Paige has a little more journalistic integrity to have simply repeated something from Wikipedia, without even checking Wikipedia's references on that claim no less?

UK Uncut? Yes, I vaguely recall them. Just as I vaguely recall Laurie Penny's much-vaunted student uprising. Not much of this reaches the West Country, thankfully - much better left to all you London types.

Mention the name of the group to your average person in the street (as opposed to a dreadlocked, sandal-wearing tofu-muncher, or whatever "leftwing activist" brings to mind) and surprisingly, it's quite likely that he'll not only have heard of them, he agrees with what they stand for.

That was my experience at the March for the Alternative on 26 March. I was at a coffee shop close to Fortnum & Mason when I got talking to a man, in his late 70s, on a trip to London.

Thank you for confirming what I wrote above. London is not the rest of the UK. You need to get out more. I suspect that if you asked anyone in our local market down down here about UK Uncut, they would never have heard of them. Their impact down here is nil.

Not much of this reaches the West Country, thankfully - much better left to all you London types.

It has to start somewhere,
It has to start sometime.
What better place than here,
What better time than now.

Start the West Country branch yourself Cornelius, the power to do it, is in your hands.

thea1mighty

As a fellow west country resident, I can say he may well be right unfortunately. People here don't seem to care about anything in particular. Too many here are retirees looking for a quiet place to wait for death, so activism doesn't get much of a look in.

Saying that, there are actions planned in Exeter and Plymouth today

@thea1mighty 28 May 2011 10:28AM

Wrong guy. The cuts are absolutely necessary. Government debt is nothing less than deferred tax, and I do not see why my newly born grandson should take the rap for the moron Brown.

@whizgiggle 28 May 2011 11:46AM

Maybe beside the seaside - not here in the thriving Somerset market town we live in, where Labour don't even bother to campaign.

CorneliusLysergic

Wrong guy. The cuts are absolutely necessary. Government debt is nothing less than deferred tax, and I do not see why my newly born grandson should take the rap for the moron Brown.

But he'll pay either way, it's just through loss of services rather than loss of income, and this is the fundamental unfairness in the tax/cut distribution that has been chosen: it affects the poorest disproportionately. I'd happily pay more tax to make sure your grandson had a better society to look forward to.

I've been thinking about the nature of our currency recently, and since our fiat currency is debt, doesn't that require borrowing for there to be an economy? If every single person and organisation paid off their debts wouldn't the whole thing collapse?

GermanicusRex

UkUncut are nothing more than a bunch of moronic lefties running around protesting about things they don't actually understand as the farcical protests regarding Barclays, Next and Vodafone demonstrate perfectly.

Empirical evidence proves that if you lower tax rates government taxation revenue rises, but hey why let facts get in the way of ideology.

Empirical evidence has shown beyond any debate that free market fundamentalism/unrestrained capitalism doesn't work! In case you think it was all New Labour's fault(it was partly), take a look at the US, Ireland, Spain, Greece, etc etc
Right wing ideology is well past its sell by date. UK uncut are, I believe, suggesting we try something different - and starting with sharing out the vast wealth of this country a bit more equitably.
You need to try reading a bit more literature than the Telegraph and Daily Mail!

@MrJoe

Is that what you think happened? Thatcher went, but the poll tax was renamed "council tax" and exists to this day.

The poll tax was based on the number of people living in a property, no matter what the size.

Council tax is not.

I thought I should clarify that minor detail for you.

Wow, there are plenty of astroturfers on the CIF today!

If they have enough time to post so much, whilst being Tories (so obviously well off), they must be getting paid for posting! They certainly don't have enough work to do if not!

Glad to see others have cottoned on too. Thanks Guardian for giving a nice lesson in media management.

Good inspiration for the next generation of Yes Men (who have lost all hope of gaining employment, so have all the more reason to be politically involved).

If you can't see a future for yourself, now's the time to create the future you want.

Karl1976:

"You can’t on one hand complain that Alliance Boots has its headquarters in another country (and consequently pays its corp tax in that country), AND at the same time complain about Barclays’ ‘low’ tax bill that was recently in the news, given that the corp tax bill it has paid is in relation to the business that has its HQ in this country"

You forgot to mention that Barcalays has 180 subsidiary companies in the Caymans and other tax havens

To those furiously protesting that raising taxes in the UK would actually reduce revenues... Warren Buffett thinks the US deficit could be reduced by taxing the super-rich -- so just why would that not work in the UK as well?

Rock on, UK Uncut !! There are now a great many similar grassroots campaigns springing up around the world inspired by UK Uncut. They come over as decent, well-informed, concerned, unselfish people. What they are saying, without television advertising, is getting huge traction in Britain right now, because it is shocking and true, and the cuts are hurting so many people. That is causing the elite to become very angry and scared.

To recap from previous, intelligent Cif posters:

Bankers are selfish money grabbing pricks, who spend half their time trying to avoid taxes. We have a corrupt and dangerous financial sector. We have bailed them out, supported their shite business models and what do we, as taxpayers get in return - sweet FA. We should put one of these useless corporations against the wall by removing their cash. Generate support through an aggressive campaign through all possible avenues - internet, Facebook, Twitter, etc.

Apart from the decent posters, the Guardian public sphere is starting to look and smell like Barking creek outflow at low tide, with these putred right-wing comments poisoning the place. Most regulars have a very finely tuned troll detectorrunning. Most of the time it is actually fun hunting them out. it is the uniformity of much of that emanating from the right that often awakens suspicions. Pinning them down and watching them self destruct. There are also lots of right wing scumbags out there who aren't getting paid; they just love filling the world with bile. The aim is clearly to destroy the thread as a venue for progressive ideas to be chewed over. The Conservative party had a major cyber warfare unit hired during the last election. They have not closed down this project, it still operates from Milbank to this day.

What some people find extremely baffling is that these right-wing bigots are tolerated by the powers-that-be at Cif despite constantly offending against the talk policy. You get tiny groups of people -- three or four in any group -- running many dozens of sockpuppets in an obsessive, repetitive manner. Public relations firms like to try to shape the news, and not appear in the headlines themselves. What corporations could possibly pay for that, I wonder ?

@oneworldlemon

If I had the power to do so, your comment would be on the Guardian front page.

As for the sock-puppet armies, it is going to take great deal of imagination to slay them.