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February 2015

This is interesting

A campaign to pardon nearly 50,000 men convicted under a 19th-century law for homosexual activity is being delayed amid concerns in Whitehall that a small number of paedophiles could be included.

The problem being that under the old law no distinction wsa made, as we would now, between over 16s and under 16s. Ang given the current paedo craze, well, umm…..

However, there’s something quite different here. The argument being put forward is that as these men did nothing morally wrong under current law therefore they should be pardoned. Well, test that assertion how you like.

But doesn’t that mean that anyone at all convicted under a law that we no longer have deserves a pardon? We no longer have conscription thus all who avoided or evaded deserve a pardon? We no longer have Schedule A (is that the right phrase for income tax on the imputed rental value of an owned home?) so those convicted for evading it get a pardon?

Where does one stop with this?

So this sex work thing is largely an economic phenomenon then

More than 70% of UK sex workers have previously worked in healthcare, education or charities, while more than a third hold university degrees, according to one of the largest surveys of the industry ever undertaken.

The academic research, carried out by Leeds University and funded by the Wellcome Trust, also reveals the pressures that lead people to enter the sex industry, with one respondent saying she could not keep up her mortgage repayments while earning £50 a day as an NHS care assistant.

The study of 240 sex workers – including 196 women, 28 men and 12 transgender people – focused on those who were not trafficked or coerced into selling sex but had chosen to do so, and most worked from within premises rather than on the streets.

Of those surveyed, 172 (71%) had previously worked in health, social care, education, childcare or charities. The second most common former area of employment was retail, with 81 people (33.7%) having worked in the industry.

Not that the usual suspects will take a blind bit of notice of this. People feel they don’t have enough money, they go and do something they may or may not like doing but they want the money more than they dislike that action.

And the difference between this and any other job is what?

I look forward to Polly complaining about this

Migrants coming to the UK are putting pressure on its sewerage system, the party’s immigration spokesman has said.

Ukip immigration spokesman Steven Woolfe stressed the party was not anti-immigration or anti-immigrant.

But he argued that the number of incomers had put strain on infrastructure such as schools, hospitals and the sewerage system.

Because of course Polly has, more than once, said that the way to count the number of people in an area is to look at the strain on the sewage system, not the electoral roll or the census.

Goose n’ gander n’ all that.

Ritchie fails to note that the domicile rules works two ways

If you want to know why the domicile rule survives despite the very obvious abuses it permits ….

It survives because the tax profession and banks make money from it.

And they are the people who are too close to writing too much tax law.

And so this abuse of most people in the UK goes on.

As ever he’s failing to note that the domicile rule works two ways. Sure, it means that some income of people resident in the UK is not taxed in the UK. But it also means that some income (or assets) of people not resident in the UK is taxed.

It’s the balance of these two that is important, not just the first one.

Imagine that we had a purely residence based system. That would mean that we get tax on the worldwide incomes of the current resident but non-doms (dependent upon how many of them stay, of course). But we would also not get tax from those who are UK domiciled but non-resident (Hiya! not that my putative tax payments would offset Abramovich’s). The rules on things like CGT (at least used to be), UK sourced income and IHT are rather in HMRC’s favour for those who are non-resident and yet still domiciled.

Further, it’s not entirely clear how the balance works out. There’s however many tens of thousands who are non-doms. But there’s millions who are domiciled but non-resident (all those pensioners in Spain would almost certainly qualify).

It would actually be fascinating to know whether the non-dom rules actually make a profit for HMRC or not. Two different calculations.

1) Does revenue lost to non-doms outweigh revenue gained from non-resident but doms?

2) Now rerun this with some reasonable assumptions about how many non-doms would stay on a purely residence basis.

My guess would be that 2) would be HMRC profits and 1), well, I think it might be a close run thing.

On net neutrality

The USA has handed the Federal Communications Commission, via the “general conduct” rules, a massive amount of control of and discretion in the way in which ISPs handle Internet traffic. It presumes that the FCC has the actual best interests of American consumers at heart, and is intelligent and foresighted enough to apply the rules to that effect. Given the past history of government agencies in customer service and in being effectively captured by the industries they are supposed to regulate, this seems… unwise.

But McDonald’s hasn’t avoided any tax

According to British charity War On Want – which tackles poverty around the world – McDonald’s opened a Luxembourg-based offshoot called McD Europe Franchising Sarl in 2009, to deal with royalty revenues paid by franchises using its brand. This happened ‘immediately after’ a policy change in the country which allowed these kinds of intellectual property firms to pay lower taxes on income.

The company then routed billions in royalties from its European operations to the Luxembourg outpost, minimising its tax liabilities, the report said.

That same year, McDonald’s also shifted its European headquarters from London to low-tax Geneva, which was viewed as another attempt to reduce its liabilities.

….
The report found that McDonald’s Luxembourg branch registered revenues of £2.7billion over five years, but paid less than £12million of tax. If it had kept these royalties in Europe as ‘profit’, rather than diverting them through Luxembourg, it would have had to pay more than 60 times this amount.

And if it had kept its headquarters in the UK and paid British corporation tax on all the royalties it earned from its European subsidiaries, HM Revenue and Customs could have netted up to £818million extra between 2009 and 2013.

Even if McDonald’s had only paid UK corporation tax on the money it made from British royalties, the taxman would have received £75million more.

That money gets taxed when they take it back into the US. And they do take it back into the US. There’s no large untaxed offshore profits in the McDonald’s accounts.

While the schemes are not illegal, firms are coming under growing pressure to pay tax in the country they sell their goods – rather than where various headquarters are based.

That’s simply not the way that corporation tax works. Even HMRC tell us that.

And there’s a more serious point here as well. Whatever arrangement over royalties Mcd’s has with franchises it m,ust have the same arrangement with direcrtly owned stores. Because that’s how the tax system does work: on that arm’s length, transfer pricing basis. It would be illegal of McD’s not to charge itself a royalty.

Isn’t Chelsea Clinton the rich one?

The Clinton Foundation, which has raised nearly $2 billion since Bill Clinton left office in 2001, has long been seen as a potential source of embarrassment for Mrs Clinton as she prepares to run for the White House in 2016.

Yes, true, the money’s in the foundation, not Chelsea’s pocket. But the rules of these foundations are pretty porous. She’ll essentially have control of that money (and the income derived from it) for her lifetime and that control will pass on down the generations. The basic tax rule is that it must spend 5% of the endowment each year. But that 5% includes paying nice incomes to those that run it.

This isn’t Green QE

So, the Bank of England muses about climate change, central banks and greenery:

For example, should central bank monetary policy be charged with a green agenda? Should central banks take it upon themselves to encourage and support the formation of liquid environmentally-focused markets?

That’s just one of the ‘unconventional’ areas the BoE’s One Bank Research agenda — revealed by the Bank on Wednesday — is keen to explore in a bid to stay ahead of fundamental change affecting the economy and financial stability in the market.

One example given is climate change bonds. Another insurers and their reactions to extreme weather events. But then here’s Ritchie:

It was five years ago that Colin Hines and I created the idea of Green quantitative easing. It looks possible we may now get it.

Green QE is the idea that the BoE prints more money to spend on green things. And that isn’t one of the ideas under discussion. So, no.

Quite

Richard SJ Tol 10 hours ago

The arithmetic is really not that hard.

Greenhouse gas emission reduction requires government intervention.

Most fossil fuel reserves are owned by governments, and exploited by companies that are owned by governments or pay substantial royalties to governments.

Ergo, government would be the main victim of fossil-fuel reserves stranded by government.

Saving is not productive apparently

Can you guess who this is?

The first, and most obvious of those alternative answers is one that I have long suggested. This is to suggest that collecting only a part of the £120 billion tax gap is a way to do this. Such solutions do not, admittedly, happen overnight but I have not a shadow of a doubt this option is available. Money that should be used in accordance with the will of government is not being so at present: the aim of this policy is to reverse that. At present some of that money lost will be saved – and so not be put to any productive use

Savings are not put to productive use. My word. We can therefore demolish the entire financial system can’t we? Since we don’t actually need anyone to put the savings of the nation to productive use any more?

This is interesting too:

The fact is, almost any investment can make 1% rate of return to cover the cost of government borrowing,

Really? Any investment can make 1%? So no investment project has ever, before financing costs, lost money then? Concorde? Pets.com?

Sigh

Smoking in parks and squares should be banned to help people quit and stop young people seeing adults lighting up, experts have said.

Health officials say the move would allow people to enjoy clean air and exercise in the public spaces – and most importantly, dissuade others from taking up the habit.

Can we just fire these people instead?

Hodge the dodge

In a PAC hearing on Wednesday about the BBC’s property estate and the issues raised in the recent National Audit Office report into how the corporation has managed it, Hodge asked director general, Tony Hall, trustee Nicholas Prettejohn and managing director of finance and operations, Anne Bulford, “what on earth” the BBC had done signing up to a property deal with something that she claimed was “clearly a tax avoidance scheme”.

Television Centre was sold to a consortium of developers and investors called Whitewood, including Stanhope, Mitsui Fudosan UK and Alberta Investment Management Corporation, for about £200m in 2012.

Hodge said about 10 companies were involved and she was shocked that a public service institution such as the BBC had gone about the disposal of a publicly funded asset in such a way.

Sigh.

There’s two sides to every deal. Imagine that this really was tax avoidance (I have no idea if it was myself). Of that extra profit made by dodging tax some of it will flow through into the BBC’s coffers in the form of the tax dodgers offering a higher price for the asset. So, the reason is that the BBC got more money this way.

This was actually predicted

The “feminisation” of GPs has led to a shortage of family doctors which could fuel demands for even bigger wages, Government advisers have warned.

More than half of GPs are women and many are more likely to want to work part-time fuelling the shortfall.

It costs just as much to train a part time GP as it does a full time one. Perhaps the solution would be to have part timers paid at less than pro rata?

Umm, what?

Bennett, I would hope, knows that this is nonsense: that you’re discredited if you believe lizards are taking over the world, but you’re not discredited if you fail to recall how much is spent giving mortgage tax breaks to buy-to-let landlords.

What mortgage tax breaks to buy to let landlords? There aren’t any actually.

Being able to offset interest paid against rent just isn’t a tax break. Any and every business gets to deduct interest before profit is calculated. Because interest is a cost and costs are deducted before profits are calculated.

And this is stupid too:

In the final spending period of the Labour government, £96bn was allocated to housing benefit, £5bn to building new homes. It is a naked redistribution of taxpayers’ money to the 2% of people who are landlords.

Umm, some of that housing benefit does go to people living in council and housing association stuff you know?

This is slightly odd

Over his 50-year career, Lester Brown has become known for his accurate global environmental predictions.


Odd in the sense that I can’t actually think of any single one of his predictions that have come true. He’s very like Paul Ehrlich in this sense. Always prophesying catastrophe in a little bit, but when the little bit arrives there’s no catastrophe.

So here’s a fun question

Rifkind would, as an ex-Foreign Secretary, pretty much have a right to a peerage.

Sir Malcolm Rifkind, the Conservative MP embroiled in cash for access allegations, is to step down as an MP at the General Election and has also resigned as chairman of the Parliamentary Intelligence and Security Committee.

So, what odds on him actually getting one?

Same goes for Jack Straw actually (he was Home Office, wasn’t he?)