Ritchie promises to keep lying

We have been used to talking about tax avoidance as a focus for the UK Tax Justice campaign for a long time now. Companies like Google, Amazon and Starbucks have become well-known for the attention that they have received, and around the world these companies are now amongst the best known tax avoiders as a result.

Agreed that they are regarded by many as tax avoiders. And that this is a result of the activities of people like the Murphmonster and the UK Tax Justice campaign. And Ritchie is now announcing to us all that he’s going to continue on with the same tactics about tax evasion.

Well, Hurrah! for that then, eh?

For with regard to Amazon being a tax avoider. As I’ve pointed out to him before, and as he then spluttered about, Amazon doesn’t really make much in the way of profits and that’s the reason that it doesn’t pay much in profits tax. To the point that, under his version of unitary taxation Amazon actually overpaid UK Corporation Tax recently. It is somewhat difficult to describe that as tax avoidance. And then there’s Starbucks of course. As even Vince Cable agreed, they weren’t in fact making a profit even when you added all the royalties etc back in. And not paying profit tax when you’re really not paying a profit is, well, it’s difficult to call that tax avoidance.

But Ritchie managed to do so. So, what his actually statement of today is is that he’s going to start lying about tax evasion in the same manner that he’s been lying about tax avoidance.

Hurrah! aren’t we blessed etc?

30 comments on “Ritchie promises to keep lying

  1. Ritchie has already told lies on evasion: he refuses to acknowledge that tax evasion in the cash economy is accompanied by benefit fraud. If his tax gap figures have merit (and they just must, mustn’t they) then official estimates of benefit fraud are way too small.

  2. “tax avoiders” – also known as “companies that obey the law”

    What a colossal self-important fool that man is

  3. C’mon Tim, even the G20 says that profit shifting is a problem and something must be done. Obama declared his intent (yesterday I think) to stop multi-billion American companies buying cobblers in county Carlow to be their tax base.

    This is ultimately a debate about what the law should be, not what it is, and the law is going to move in the direction Ritchie wants to see. To say it shouldn’t because Ritchie would be ad hominem, even though the guy is completely ignorant.

    Maybe if more taxable stuff generated in our western, high-tax countries was actually taxed here rather than in some shithole which the company has nothing to do with other than funnelling billions in and then out a few minutes later, we could reduce tax rates for everyone.

  4. That last point Is acknowledged in the “OECD action plan on base erosion and profit shifting”: When tax rules permit businesses to reduce their tax burden by shifting their income away from jurisdictions where income producing activities are conducted, other taxpayers in that jurisdiction bear a greater share of the burden.

    Honestly,even the arch-capitalist vanguard of globalization thinks this is a problem, it’s no mere leftist wet dream.

  5. BinG

    It may be right or wrong. However, if a business obeys the law as it is then Ritchie doesn;t have the right to the abuse he heeps on it. But then he really is ignorant isn’t he.

    Clarissa

    No he won’t; he’s bullshitting.

  6. Ironman, I agree completely. But this is far more about Ritchie being an incompetent rhetorician than on the wrong side of history.

  7. BiG,
    I agree, but Richie is part of the problem.

    Tax “avoidance” by multi-nationals is a problem, and one that should absolutely be recognised on the right. For a start, it gives those able to indulge an advantage over those who can’t.

    Richie and his ilk are a hindrance because:

    1) Right-thinking people will naturally try and argue the other way, and it all gets a bit tribal (not entirely his fault)

    2) Demonising the likes of Amazon does nothing to solve the problem. Companies have a duty to follow the law, but also to minimise the tax they pay (it is, after all, just another cost).

    So, demonising companies that obey the law set by the governments we elect is simply saying, “look at me, I’m just so lovely and caring”. It’s loathsome.

    There is no easy answer to this by any means, and lies, bullshit and general moralising won’t make it amy easier.

  8. Maybe if more taxable stuff generated in our western, high-tax countries was actually taxed here rather than in some shithole which the company has nothing to do with other than funnelling billions in and then out a few minutes later, we could reduce tax rates for everyone.

    I’m not convinced this would produce the result people think it would. I am sitting in a colossal skyscraper which serves as the HQ of a giant European multinational, and which pays considerable taxes to the government here. Yet it has not a single operation here: all the actual, meaningful production is done overseas. From what I can tell, all we do here is bullshit each other and hold meetings.

  9. He’ll get nowhere with his quest to get the same attention for evasion as has been gotten for avoidance by Google/Amazon etc because he doesn’t realise why Google/Amazon etc got the attention that they got.

    Murphy, the narcissist that his he, thinks that the attention was because of him. It wasn’t. It was because the British and our media are pre-disposed to being angry about big companies doing nasty things. The anti-tax-avoidance industry helped to flag up something to be angry about, but it was UKUncut, not Murphy, who took the matter mainstream.

    Murphy gets all his evasion from the ‘black economy’. To the extent it actually exists it’s either proper criminals who we don’t know, or the cash-in-hand merchants who we do, and who the public tend to sympathise. There are no big-name hate-figures to put on the front page of the Groan, or drag before Multi-Millionaire Tax Avoider Lady Hodge and her band of drum-beaters. There is no story here.

  10. I am not convinced that recognising profits in our ‘high tax’ jurisdiction rather than some ‘shithole’ (some people really are ignorant fuckers) would reduce tax rates for everyone. Evidence of Tax incidence suggests that wage rates/employment levels and therefore tax take from payroll taxes are reduced by high CT rates. Ergo higher tax rates.

  11. Starbucks…weren’t in fact making a profit even when you added all the royalties etc back in.

    Tim, you like to repeat this, but for corporation-tax purposes it’s not true. I wrote up the numbers here.

  12. Hi PaulB

    OTOH, a balanced position would be to allow some of the royalties. Disallowing them completely does seem a little excessive, given that the use of the Starbucks name obviously has value. From memory, HMRC reduced a 6% royalty rate down to 4.7% for tax purposes.

  13. Christie

    Aah yes but, as Ritchie can tell you, .HMRC is completely under the thumb of the silent neoliberal conspiracy that secretly controls us all. In fact every little thing that has ever happened with which disagrees o’s the neoliberal conspiracy.

  14. “Maybe if more taxable stuff generated in our western, high-tax countries was actually taxed here rather than in some shithole which the company has nothing to do with other than funnelling billions in and then out a few minutes later, we could reduce tax rates for everyone.”

    Not only pernicious bullshit and untrue but the exact opposite of the truth.

    The leftist mantra -“If only everybody paid what they should then taxes for us all would go down” is a hoot that displays zero knowledge of the psychology of thieves and psychopaths. Once you meekly hand over whatever your wannabe masters decree they will spot you for sheep and the demands will go up cos’ they know they are dealing with mugs. The only thing that stops thieving (outside of fighting back in whatever form) is when there is nothing left to steal. Like an alki or drug addict the state will stop only when there is nowt left to take.

  15. @Mr Ecks,

    Actually I, unable to offshore my salary, do meekly hand over every cent that my lord and master demands, as do 99% of the population. I’m quite aware that, should the offshoring of certain types of income by 1% be made more difficult, the temptation will be for the lord and master to increase expenditure, rather than reduce tax rates.

  16. > actually taxed here rather than in some shithole which the company has nothing to do with

    Let’s say, for the sake of argument, that every tax haven is a shithole. (You know, like Monaco.) What would be one way for their governments to make their countries a bit less shitty or holish or both? Well, I suppose they could try to bring a bit of money into the country somehow. They’d need to provide some sort of incentive to foreigners to bring their money in, and then they could tax it a bit, or maybe just let their businesses charge service fees for dealing with the money. That would work, wouldn’t it?

    As I’ve said before, I’d like to see the government of one of these tax havens fight back against these protectionist bastards. A couple of adverts on British TV with pictures of roads and schools and hospitals, with a quick explanation of how a tiny country can afford to build such things by outcompeting larger countries’ tax regimes.

  17. @ Squander 2
    Bermuda.
    There are, and have been for dozens of years, so many people queuing up to move to Bermuda that the government will only grant work visas if the employer can demonstrate there is not a single Bermudian competent and available to do the job.

  18. @BiG

    C’mon Tim, even the G20 says that profit shifting is a problem and something must be done.

    Tim can answer for himself bu that way I see it is Tim has ever denied that shifting happens but he’s always argued that it is is either specifically allowed or not specifically disabled.

    The G20 are saying that it is happening and the rules need changing. Fair enough, laws/rules/regulations rarely keep up with the changing nature of business.

    What Tim and most has always objected to is that Ritchie doesn’t care what the laws/rules/regulations say or don’t say, he wants to rule by fiat.

  19. Posing as a huge fan, I’ve been trying to get The Great Man to explain to me why the use of dividends is avoidance (of NI), while Partnership profits are not, even if they have the same affect.

    I’ve had a number of “answers” but no answers.

    There is clearly a case to be made for tax reform, etc, but RM’s incessant rudeness and because-I-say-so logic is absolutely fucking mental.

    One thing I have learned is that you can get the most absolute tosh posted on his blog so long as you’re on side. No sense of the ridiculous whatsover

  20. Jack C:

    Employment income is subject to both primary NI (paid by the worker who receives the cash) and secondary NI (paid by the employer).

    Partnership profits suffer only primary NI (albeit at a slightly lower rate).

    Dividends suffer neither.

    So using dividends can be seen as avoiding primary NI, which using an LLP doesn’t.

    Where you have an individual working, you have three possible structures and four possible NI regimes:

    1) Sole trader: pays primary NI only

    2) Partnership (or LLP with a sleeping partner, if you want a separate legal entity that isn’t a company): pays primary NI only, exactly as in (1)

    3a) Company, with profits extracted as dividends: no NI at all

    3b) Company, with profits paid out as salary: both primary and secondary NI

    The interesting thing is that, if you take a sole trader as your base case, a partnership or LLP makes no difference but a company is a way to either double your NI bill (broadly speaking) or eliminate it altogether.

  21. @ Jack C

    One thing I have learned is that you can get the most absolute tosh posted on his blog so long as you’re on side. No sense of the ridiculous whatsoever.

    Like this one…

    Very well done for your campaigning generally, and well done for turning the tables on Tim Worstall, or Tim Worst-of-All as I like to call him!, by highlighting one of his articles here.

    What I like is the way you stick to the big picture, driven by hope, morality, decency, morality and decency. The trolls like to feel clever with their facts and real-world projections, but you see things as you feel they should be, and not as they are in grubby, complicated reality.

    Truly you are a vivid beacon of hope in a sea of neolibrul oppression. Keep On Keeping On!

    🙂

    And lots of recommends…

    (Apologies again for the earlier indiscretion..)

  22. Jack C

    The use of dividends is avoidance when Philip Green and his wife do it

    It is not avoidance when Ritchie and his wife do it.

    Hope that is clear

  23. What’s funny, PF, is that every other post here reads as banal as the one you quote. Just SMFS in himself is a fucking cartoon. I understand the schoolboy urge to “get one over” on a particular regulation in someone else’s patch, it’s easy, and we’re all giggling furiously.

    john77 and s2 fall into amassive trap about tax havens. The locals are shit upon and get a paltry nod towards a democracy.

    It’s people like worstall that are serial, ignorant liars. You don’t have a fucking clue.

  24. Hi Arnald,

    OK, ignoring the trivial humour distraction (!), please help me out here:

    – How is SMFS a “fucking cartoon” (I couldn’t even find a post of his above)?

    – How did john77 and s2 fall into “massive” traps about tax havens? I sort of get what you are saying about the locals, even if I don’t necessarily accept it, but surely that is not your argument against Bermuda / tax havens?

    – How specifically is Tim a serial, ignorant liar?

    I apologise if I sound ignorant, I am simply interested to understand it better? And, as you know, you would not be alone, there are plenty of people here who tell Tim / others all the time that they are talking utter and complete nonsense (and most usefully WHY they are talking rubbish), that’s actually the point. Anyone can play, whatever the viewpoint, so if it’s all clearly wrong, please, explain, I’m actually keen to understand?

  25. PF,
    I have no idea how that post got through … it rather proves a point (or, indeed, my plug for Socialist Nationalism).

    Arnald,
    I wasn’t just being facetious. Murphy’s weakness is that he simply cannot contemplate opposing points of view, and is preposterously rude into the bargain.

    Tax reform or tax justice, call it what you will, is fiendishly complicated, not least due to globalisation and our position in the EU. I don’t think his attitude helps.

    Two recent examples:

    1) Partnership profits: on these, he is absolutely black and white. The letter of the law says x, so avoidance is impossible, will of the elected government, blah blah. Read his posts on the subject; you’ll think you’re reading Worstall.

    2) Headline: The Tax Gap, 120 billion and rising

    Someone suggests that the gap is actually falling

    Answer: the point is the 120 billion. That is the issue, etc

    So someone else points out that the headline is incorrect.

    Answer: It is rising

    You can’t argue with that sort of mindset.

  26. Arnald,

    > john77 and s2 fall into amassive trap about tax havens. The locals are shit upon and get a paltry nod towards a democracy.

    I don’t think I said a damn thing about democracy, so I’m not clear on how I got it wrong. I was talking about wealth. Even if you were right, you’d be forgetting the key question: compared to what? The question isn’t: are the locals treated well by their country by some absolute standard? The question is: are the locals better or worse off than they would be without all that wealth coming into the country?

    But of course you’re not right anyway. Here’s Wikipedia’s list of the main tax havens. It contains Jersey, Luxembourg, Singapore, New Zealand, and Switzerland: jurisdictions whose locals are shit upon and get a paltry nod towards a democracy? Hardly. Yes, there are some other tax havens that are probably less nice to live in. It looks like some countries are better for their citizens than others whether they’re tax havens or not.

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