Yup, usual stuff. Entirely ignores that corporation tax is largely bourne by the workers, not the shareholders, and certainly not by the company itself.
Trots out his known to be wrong estimate of tax avoidance. This is fun too:
These big companies\’ tax rate will fall from 28% to 24% over the next four years – a move that seems generous, but quickly becomes ludicrous when it is appreciated that the effective tax rate of the largest companies in the UK is now 21%. This means that over the next four years, it is likely that their effective tax rate (that is, the rate they really pay) will fall to 17%.
And he\’s wrong there for the same reason that his estimate of tax avoidance itself is wrong. For of course some (according to taste, most, nearly all, a tiddly bit, but certainly not Ritchie\’s insistence that none of it is) of this difference between the headline rate and the actual rate is because of the various allowances that Parliament builds into the tax law.
And part of the deal over corporation tax being lowered as the headline rate is that those allowances are reduced as well. So this change will actually lead to a shrinking of the tax gap as Ritchie measures it.
Just seems odd that he\’s not celebrating what he\’s working so hard to achieve.
But the biggie?
This is all about profits that Vodafone made in Germany. And according to Ritchie\’s plans for the corporate taxation system, such profits should be taxed where they arise, where the economic substance of the transaction is.
So, if RitchieWorld were to be consistent there would be no money owed at all to the UK Treasury.
Ain\’t that interesting?