The Observer lies to us

The IMF’s analysis does something to redress the balance, making two important points. First, it says that tax systems should have become more progressive in recent years in order to help offset growing inequality, but have actually become less so.

Second, it finds no evidence for the argument that attempts to make the rich pay more tax would lead to lower growth. There is nothing especially surprising about either of the IMF’s conclusions: in fact, the real surprise is that it has taken so long for the penny to drop.

That isn’t what the IMF said at all. Rather, that those with less than averagely progressive tax systems could probably have more progressive tax systems without great damage. Also, that those with low end top tax rates could probably have higher.

The UK is currently neat exactly average on both counts. Thus it is not true that the IMF has said that Britain could or should have higher tax rates or more progressivity.

They’re lying.

This is also casuistry:

With a nod to the work of the French economist Thomas Piketty, the fiscal monitor also says that countries should consider wealth taxes for the rich, to be levied on land and property.

Land and property taxes are not the same thing as wealth taxes. Don’t, ever, pretend that they are.

Fun question

Why does this matter?

Catalonia’s separatists looked increasingly isolated as the region’s biggest bank announced plans to leave and political pressure rose in both Madrid and Barcelona to bring the standoff to a head.

“It’s very sad what we are seeing, the departure of extremely important companies from Catalonia,” Economy Minister Luis de Guindos said at a press conference in Madrid on Friday. “This isn’t the fault of the companies. It’s clearly the fault of irresponsible policy which at the end of the day generates uncertainty and anxiety.”

Corporate tax is paid to the central government, isn’t it, not the regional?

Hmm, this might not be the best idea

Graduates aged in their 40s and above who benefited from a free university education should pay a retrospective tax to help fund the current generation of students, a new report has suggested.

Researchers at the UCL Institute of Education have set out proposals for a new “all-age graduate tax” that could be used to bring down tuition fees that currently cost students up to £9,250 per year.

Retrospective changes just aren’t a good idea really.

Those who received hip implants back when the NHS did them promptly should now pay an extra tax to pay for the NHS to do hip implants promptly today?

Goodbye to the rule of law then, eh?

The commission will take on the task of drawing up a tax that could be levied on purely online companies such as Google and those that deal in hardware such as Apple but which are also viewed as paying too little in tax.

You’ll pay tax just because we think you should pay more. Rather than a set and settled system where anyone can know how much they should pay.

Good thing we’re leaving really.

So, my plan works then

Incomes increased over the past financial year as wages rose more quickly than pay, aided by the rising income tax threshold.

The average household’s disposable income – after tax, benefits and inflation – rose by 1.8pc to £27,200 for the financial year 2016-17, the Office for National Statistics said.

Given that it really was me (although, agreed, not me alone) with that raise the damn tax allowance argument I guess my plot to make the Brits better off worked then, eh?

Whut?

Some executives working for these extremely profitable tech companies are feted for their acts of philanthropic generosity. But why don’t they do more to stop crime on their platforms, as well as paying their fair share of taxes, which would allow the government to hire more police officers?

How venal do these rapacious companies have to be before we act?

Mike Barton is chief constable of Durham Constabulary

A Chief Constable is complaining that people obey the tax laws?

Sigh

The argument against the idea is contained within the very piece recommending it.

In the UK, official statistics suggest around £77bn is passed on in inheritance each year (tax avoidance means the real amount could be even higher). That’s money that no living being has a moral claim to, according to standard justifications of wealth inequality and private property. Were that money redistributed by the state, it would cover the cost of adult social care several times over. It could plug gaps in NHS, education and police funding. It could provide the kind of comprehensive welfare state that meant nobody had to worry about their family after they passed away – because there would always be a safety net.

OK, 100% inheritance tax. Why not?

The idea that we should be able to pass on our life’s accumulated wealth to descendants is deeply embedded. It appeals to the fundamental biological urge to protect your offspring and propagate your genes.

Because human beings don’t work that way.

Which is a pretty shit hot reason why not. To the extent that we’re doing any designing at all we’re trying to aid humans in being human, not anything else.

Country by country reporting won’t change this in the slightest

A French court handed Google’s parent company, Alphabet, a reprieve from a 1.11bn-euro ($1.27bn) tax bill on Wednesday in a major victory for the tech giant.

The decision comes after six years of fighting with the French tax authority over back taxes it claims are due from the tech firm for the years 2005 to 2010.

The French tax administration argued that Google had to pay taxes in France because the California firm and its subsidiary in Ireland have been selling a service for inserting online ads to clients in France for years through its Google search engine.

But the Paris administrative court noted that the subsidiary, Google Ireland Limited, doesn’t have a “permanent establishment” in France via the company Google France, also a subsidiary of the US group Google Inc.

I’ve already done the “I told you so” piece. And do note that country by country reporting doesn’t change this in the slightest. Under the standard international tax treaties sales from outside the country pay tax where the sales are booked, not where the customers are. It is only when there is a permanent establishment in the country that everything comes under that taxing jurisdiction.

There is no dodging here, this is not an abuse of the rules, it’s following them as they are written. As HMRC has been known to point out, this is just how the system works.

Umm, how does this work?

Uber was last night accused of exploiting a loophole to avoid paying millions in tax that helps it undercut rivals.
It was claimed that HMRC has missed out on about £40million in VAT from the controversial taxi app thanks to the legal but highly controversial tactic.
Ride-hailing apps are meant to pay 20 per cent VAT on booking fees they collect from drivers on each fare. But Uber avoids this by treating its 40,000 UK drivers as separate businesses, as most earn less than the £85,000 a year threshold for VAT registration.
This enables the American firm to offer cheaper fares than both traditional taxi firms and rival app-based services, while depriving the Treasury of millions of pounds in tax.

Forgive me because I don’t understand this claim. The booking service is offered by Uber. Why would it make a difference if each of the drivers was VAT registered or not? It’s still Uber offering the booking service, no?

Uber collects an estimated £200million a year in fares, meaning HMRC could be losing out on at least £40million a year in VAT, according to calculations by Reuters.

Ah, so the claim is that the total fee should be Vatable. Which it isn’t, is it? This is Tom Bergin again. Which does actually explain:

Uber avoids having to charge British value added tax on its booking fees by treating each driver as an individual business and then billing drivers across EU borders from its Dutch subsidiary, using an EU VAT provision called the “reverse charge”.

The rule lets businesses sell goods or services to other businesses across EU borders without paying VAT. There is usually no loss of tax revenue, because the importing business collects VAT from its own customers.

But since Uber drivers mostly generate less than the 85,000 pounds a year sales threshold to register for VAT in Britain, they don’t have to collect it.

Gett and mytaxi both bill their drivers from companies within Britain. As the reverse charge does not apply to domestic sales, that means that unlike Uber they must charge drivers VAT.

It is upon just the Uber fee, not the total amount. OK, great.

So Tom, who is it who is not paying this VAT? It’s not Uber, is it? It the driers who aren’t paying it.

But then Bergin likes Dame Margaret, Lady Hodge, and has even been known to speak of Lord Snippa Spud approvingly. So tax incidence isn’t going to be one of those things he gets right, is it?

Is Phillip Inman really this stupid?

But, more importantly, working for a PAYE employer will be considered a mug’s game compared with running a small company and paying 19% corporation tax. Even under Labour, someone earning £80,000 could swap a 45% tax rate for a 26% corporation tax rate.

There is tax to be paid again when the money is taken out of the company you fool.

The Tories meanwhile will make the situation worse by increasing the personal threshold further, taking even more people out of the tax system. Such a move will disempower future governments from helping the lower-paid through the tax system.

Yes, yes, he is this stupid. If we stop taxing poor people now then we can’t stop taxing them in the future.

The Australian tax dodge case

All most fun. And proof that criminals are idiots of course. The only surprising thing here is that Daddy was a senior tax officer.

Basics – set up as a payroll processing company. Gain contracts to do the work.

Then don’t pay the correct PAYE.

I mean, yes, there’s more, but that’s the basics.

At which point criminals are idiots. The taxman is going to come looking for this money at some point. So you don’t spend it on cars and properties and watches and so on. Most certainly not in the tax jurisdiction you’re ripping off you don’t.

Sigh.

Suitcases of cash in some jurisdiction with no extradition treaty is the way to go.

Oh, and skipping just as the first letters start arriving asking where the PAYE is.

I really don’t think so you know?

The Mail has been consulting Snippa again no doubt:

Last year, the tech giant was named as the biggest corporate tax avoider in the United States after booking $218.55 billion (£171.6 billion) of profit offshore last year.

The tech giant was able to save $65.08 billion (£51.1 billion) that it should have paid in tax thanks to its convoluted arrangements.

Annual profits were of the order of $40 to $50 billion. I really do seriously doubt that they dodged $65 billion in tax on that even at US rates.

The twats are attributing the accumulated amount over the decades to just last year.

Oooooh, super

The proposal also gets rid of almost all tax deductions, including those for state and local taxes. This creates a significant increase in tax for residents of high-tax states such as California and New York.

It’s been a huge distortion and removing it will cause no end of pain in those liberal strongholds.

Good. For people should pay the tax for what they voted for, shouldn’t they?

I approve

Tax Day Reading of Our Glorious Tax Code at IRS HQ in DC

This Tax Day, April 18, will see the first-ever public reading of our glorious Tax Code.

This riveting event begins at 7 a.m. in front of IRS headquarters in Washington, DC.

The good people of the Tax Revolution Institute will keep going until it is too dark to carry on, or they lose their voices.

The absurdity of the event is intended to match the 74,000-page absurdity of the tax code.

To witness this madness, go to the IRS building on Tuesday, April 18, located at 1111 Constitution Ave NW, Washington, DC — or watch live at TaxRevolution.us.

Sigh

Google paid £36.4million in UK corporation tax last year – despite making a turnover of £1billion.

Sigh

Liberal Democrat Treasury spokesman Susan Kramer said: ‘It is appalling that Google are still getting away with paying such a paltry amount of their total revenue back in taxes.

It’s a profit tax you ignorant git!

David Cay Johnston is ever so slightly biased here, no?

In 2005, Donald J. Trump married model Melanija Knavs, his third wife. That year, the real-estate mogul and newly minted TV star earned $153 million dollars, about $3 million a week. That’s far more than all but a tiny sliver of the U.S. population.

The newlyweds paid $36.6 million of that year’s take in federal income taxes, a rate of 24%, putting the Trumps in much the same tax league as any other two-earner professional couple making about $400,000 a year.

Or to put it another way, Donald Trump was paid that year like a member of the 0.001%, but he paid taxes like the 99%. And by at least one measure, he paid like the bottom 50%.

Average tax rate for the top 0.1 % in 2005 was 22.48%.

Between 5 and 10% (that couple on $400k, around and about) 12.61%.

It’s entirely possible to argue that US taxes aren’t high enough and all that. But arguing that Trump’s return here is anything out of the ordinary for his income bracket is, umm, well, misleading, nu?

The document offers a rare glimpse at how a super wealthy couple can manipulate and manage our complex tax laws to reduce their obligations far below rates paid by typical salaried professionals or even blue-collar wage earners.

But an average income tax rate of 24% is far above anything paid by typical salaried professionals or blue collar wages.

Tsk. And to get to the comparable number of 24% for that $400 k earning couple Johnston adds in social security….which isn’t income tax, is it?

The Trumps paid $31.3 million in AMT which, together with the regular tax, made their total federal income tax $36.6 million.

Viewed in terms of their positive income of almost $153 million the total Trump tax bill came to 24%. That’s in the range paid by two-income career couples who both work all year to earn about $400,000. The Trumps income was $418,460 per day.

Yep, that’s what he does, adds SS into that second tax bill.