If Ritchie says it it must be true then, eh?

And now, quite rightly, Andy Street of UK retailer John Lewis has hit back, saying that the government has to tackle multinational companies that pay little or no tax in the UK before they damage the economy. His warning is simple: he’s saying that multinationals involved in overseas tax havens will “outinvest and ultimately out-trade” businesses paying full taxes in the UK, risking driving them out of business.

Corporation tax fucks over businesses.

Might be worthwhile to think about not fucking over businesses, eh? By not taxing them?

30 comments on “If Ritchie says it it must be true then, eh?

  1. Corporations do, obviously, pay tax.

    The incidence of corporation tax is on people – shareholders, staff or customers.

    However, pointing out that Ritchie’s arguments are mutually inconsistent doesn’t mean that you actually agree with any of them in principle, never mind in detail. You can manage to be inconsistent in what you say, without any of it actually being correct (unless you are speaking about simple binaries – and very few things in real life are that simple.)

  2. This would be John Lewis that declared profits of £353.8m, but had a net corporation tax credit in their accounts (they pay half the profit in bonuses, allowable against corporation tax, and the remainder of corporation tax was wiped out by a credit against their pension scheme).

    If John Lewis paid appropriate corporation tax, maybe they have a complaint.

  3. Is it possible that Corporation Tax tends in the short term to reduce the sums available (to the CEO and his acolytes) for looting from the shareholders?

  4. All tax fucks over everybody. Or, all tax provides essential government services. Take your pick. There’s nothing special about corporationt tax, which it seems to me is the error Tim is making. The general thrust of these posts is that taxing companies is bad for the economy, but taxing something else, such as consumption, isn’t.

    Yes I know, tax incidence. All that tax incidence really does is give us an idea of first order effects; the economic agents closest to the point of taxation. But once you take into account second, third, fourth etc order effects, you realise that wherever you levy the tax, we all end up paying it, in aggregate terms. You can tax the brewery (corporation tax), you can tax the brewery workers (income tax), you can tax the pint of beer. Makes no real difference.

    The problem is this: you can have big government and big taxes, or small government and small taxes. You can’t have big government and small taxes, and it is simply pointless and disingenous to pretend you can keep the big government and big taxes but somehow make the big taxes hurt less by taxing, you know, that other guy, that guy over there, that “guy that isn’t me”.

    Levying taxes on particular classes of persons (“capitalists”, “proletariat”, “women”, “redheads”, whatever) shifts the pattern of consumption in a “cake is a fixed size” kind of a way. Lower taxes on the capitalists and raise them on the proletariat and, due to that first order effect, consumption patterns will shift. The economy will consume less brown ale and more Ferraris, or something like that. But in the aggregate, it makes no difference.

    Entrepreneurs don’t create growth; nor do workers, nor consumers, nor service providers nor stockholders. They all work together to do it. Tax any one of them, and you do the same harm in aggregate. So, big government and big taxes, or small government and small taxes. That’s the only choice there is.

  5. Taxes are believed both to have different efficiencies of collection and deadweight costs.

    Corporation tax is inefficient because most corporations are sufficiently large to take advantage of any relevant tax concessions or loopholes and many, in concert if necessary, are able to lobby the weasels by whom we are governed for special favours. Corporation tax is also considered to have a large deadweight cost, because it impacts out of proportion to its economic benefit on investment decisions.

    You may not believe the evidence but there is some there. Things are not as simple as “all taxation is the same – the only relevant consideration is the overall burden”.

  6. @Ian B

    “So, big government and big taxes, or small government and small taxes. That’s the only choice there is.”

    Or, as I desire, and suspect TW does also, “moderately sized government doing the things which nearly everyone wants and only government can do, paid for with just enough tax to cover it and a reasonable contingency”.

  7. @Ian_B: There is, of course, the transparency argument. If people think someone else is paying the tax they are more likely to be in favour of it.

  8. The decline of HMV is now ascribed to the Channel Islands lower VAT rate. A question asked if downloads might not be a factor. The definitive answer was that downloads did not replace hard sales.
    If you can believe Wiki this was a worldwide phenomenon. It has such facts as the declining sales of albums (151mn in 2006 to 123mn in 2008), declining CD sales and big rises in internet downloads. Record shops have closed all over the world without any help from the Channel Islands.
    Why does RM not just agree there were factors involved other than VAT rates?

  9. Not just CDs. And sure rising costs could be seen to be a factor in what was effectively a high street store.

  10. I think what Ian’s saying is there’s a difference between tax theory & what actually happens. You can alter taxation to make it less painful whilst raising the same amount & everything in the garden should be rosy. Except, in practice, along comes a politician who spots the level’s not quite at the unacceptable pain threshold any longer and’s determined to do squeeze a bit harder to fund some irrelevence. So we just end up in the same pain at a higher level in yet another iteration.
    Maybe there’s a world where tax efficiency is good. But in the one we’re in, arguing for tax efficiency is accepting the government can spend our money better than we can. Richie’s world where paying tax is a a virtue & every cent grabbed a blessing. If you believe government spending does more harm than good & we should be paying less taxes overall then you want the system to be less efficient, not more.

  11. You are increasingly shrill, Worstall.

    Rates of tax are democratically mandated.

    Murphy has stated that the EU tax laws exacerbate the behaviour you favour, meaning that you think corp tax should be reduced to nothing accordingly and with ugly gloating.

    Surely you’re on the same page here? You desire fair taxation to provide stable societies, so why promote tax competition between jurisdictions? It serves no other purpose than to reduce those jurisdictions by attrition.

    You only have to look at the quasi-independents like the Crown Deps etc. Zero corp tax has destroyed any thought of societal improvement. It was judged that ‘growth’ would need to be around 6% to cover the loss of corp tax. Why not have a look at the economic projections that zero corp tax jurisdictions?

    Imagine a jurisdiction that is based on finance being able to function with that goal – indefinitely.

    Hmmm the UK rings a bell.

    You would rather run a company like JLP down in favour of some dogma you learnt as a child?

    How is Portugal outside of your bubble?

  12. “Rates of tax are democratically mandated.”

    Yup. And so are all the various rules and allowances which allow, say, a company to HQ in Luxembourg but sell in the UK, or pay royalties to The Netherlands, or to claim tax deductions for overseas borrowing, or to remit dividends to foreign citizens living in foreign places without witholding tax.

    So what the fuck are y’all getting worked up about? The people have spoken.. they have spoken at the ballot box (and consitently voted for parties following comparable taxation agendas) and they have spoken in the marketplace (and continued to trade with companies irrespective of how much tax they pay.).

    Hooray. We can all go home now.

  13. Richard @ 3

    Ritchie has tweeted that he has examined the accounts of JL and found them to be paying ‘fair tax’ – i.e. none at all!

    I’ve asked him for the figures so we can compare them with the evil Amazon – silence so far.

  14. Arnold, why are you so fixated on corporation tax providing for societal improvement. It’s not a magic tax. There are lots of other taxes too.

    Are you picking on it because it’s the evil capitalists not paying their way?

  15. Don’t try to debate Arnald – please don’t encourage the prick…

    Arnald is not a prick, he’s a cunty-cunty-troll who lives in the tax haven paradise of Guernsey, which has a corporation tax of 0% for businesses, 10% for banks and 20% for regulated companies.

    Although I approved wholeheartedly of his living in Guernsey, he’s pissing on your back and telling you its raining.

  16. TTG
    Yes, democratically mandated, something to campaign about – not a done deal. Y’know, democracy. You libertarians have a real problem with democracy it seems. Most of Worstall’s posts rail against democracy. If you’re so worked up make a difference, yeah?

    Like Ukip?

    Jesus wept

    Sadbumlad
    You’ve never heard of campaigning, only unless it affects your sorry hole?

    Grow a pair, yeah?

    Galt
    At least you got my name right. \unfortunately you’re a dogmatic repeat-me-do with nothing to add. Debate; unnecessary

  17. Oh Galt didn’t get my name right, the jdub did.

    Yeah, I live in Guernsey, where the taxpayer is getting screwed because of a lack of corp tax. Seriously, do some research.

  18. “I live in Guernsey, where the taxpayer is getting screwed because of a lack of corp tax.”

    If being screwed as a taxpayer equates to 20% income tax, no VAT, no CGT and low council tax, then count me in for a good screwing.

  19. Jim, you know nothing.

    40 quid to see a GP. Try doing that on a Sunday where they get double. 30 quid for a blood test. A couple of ton for an ambulance.

    Schools that do worse than the UK worst.

    A town with most of it’s shops boarded up.

    If you’ve got cash, Guernsey is great.

  20. Try getting an appointment to see a GP on a weekday let alone at weekends. Try turning up at an A&E on a weekend in the UK and see what sort of ‘service’ you get. Oh, and while you’re in hospital, make sure you don’t get ‘accidentally’ put on the Liverpool Care Pathway and bumped off. Or catch MRSA. Or be killed by NHS negligence. State medical care is a laugh a minute I tell you.

    If I was paying as little tax as you do in Guernsey, I’d happily pay £40 to see the doctor if my health was at stake. My vet charges that to just look at my dog, so why would I baulk at paying the same for myself?

  21. “40 quid to see a GP.”
    Very reasonable. Here it’s £70. Which is what insurance’s for.
    “If you’ve got cash, Guernsey is great.”
    For “cash” read; spending you own money, not other peoples. First class socialist deterrent. If they take up burning environmentalists in the town square, might seriously consider a move.

  22. @Arnald:

    If you hate Guernsey so much pack up and move to the UK, then you can have direct and hands-on involvement in turning it into the workers soviet you so admire rather than just bitching from your sunny tax haven paradise.

  23. Insurance? Mother of two? How much do you reckon smart arse?

    Jesus weeps, Jim. Put the Daily Mail down FFS. Step away. I’ve had far worse service and experience in the Guernsey set up than I ever did in the NHS. Even in a run down hospital north of London. Sure it was hectic, but they did the job. In Guernsey you pay through the nose to see a ‘specialist’ and they diagnose it wrong. Nearly every time I’ve taken Arnaldette for the same thing, they’ve suggested some antidiluvian nonsense.

    So you can stick your prejudice up your arse.

    And why is it, Galt, that you think that any idea that isn’t Worstall’s means it has to be ‘soviet’ ffs.

    Sunny? Have you been here. I’m not the one that’s bitching from Portugal you disphit. And you call yourself John Galt. Hardly bitchy at all eh?

    Get real.

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