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.

21 thoughts on “Goodbye to the rule of law then, eh?”

  1. EU army
    Super President
    Greater integration via majority vote
    Pan-european candidates financed by the EU
    A sort of super Chancellor of the Exchequer to screw you more
    Bigger Schengen and more open borders and more uncontrolled mass immigration of preferably unskilled people
    P+ss all over the eastern Europeans

    Possibly the vision of a guy drunk by 10.00 every day?

    With the hole in the budget and cut backs in funds to Spain that has to come, I wonder how long my leftie mates are going to continue to think that the EU is God’s gift to Mankind.

    Brexit, you know it makes sense

  2. Because you just know the mode of value creation hasn’t changed a jot since 1863….

    Really Tim, if you want people to believe that the neo-libertarian vision of high taxes on labour and zero taxes on capital, of high taxes on wealth creation that is geographically stuck and zero taxes on that which can be done from anywhere, is the best, you have to actually persuade them, not just keep stating it.

    You might be right, but most people think they pay too much tax. Those of us who have to work for a living see the government eat 60% of our productivity, compared to 0.1% of some tech company that carefully offshores everything to the right place, has armies of accountants and lawyers, gerrymanders its reportable profits down to nothing by investing in their monopoly status, and exploits to the max a tax regime that was built for a pre-internet world, we do see a big fucking problem. Because people have very finely-attuned fairness detectors.

    And yes, it’s their absolute legal right to do all of this, quite possibly legal duty to shareholders, but probably not for much longer. Because laws can get changed.

    Sheesh, even the OEC-fucking-D is diametrically opposed to you on this.

  3. @ BiG

    I might agree that you have correctly identified why something should be done. But if this summation of the something is fair, then I’m in comfortable agreement that it is not the correct something. It is a something driven by headlines, not by a desire to address the weaknesses now being so effectively exposed.

    But the EU (et al) don’t want a modern and fair system. They want more money from Americans.

  4. Bloke in Germany

    That porition of the electorate that voted in Britain for an economic vision similar to Venezuela or Belarus have ‘finely -attuned fairness detectors’? Really?

    Also, as far as I am aware all these technology giants are obeying the law as it stands, correct?

    Believe me I am no fan of paying a similar level of tax to you to minimal discernible benefit, but the point Tim is trying to make is that the EU’s actions seem to be wholly arbitrary. ‘We think you are paying too little tax, therefore we will find a way to soak you’ – I fear the tech giants are much more nimble than the Eurocrats and any tax sysrtem will end up being manipulate to pay the minimum regardless of what it is….

  5. BiG: “…some tech company that carefully offshores everything to the right place, has armies of accountants and lawyers, gerrymanders its reportable profits down to nothing by investing in their monopoly status, and exploits to the max a tax regime that was built for a pre-internet world…”

    Tech company evil, government good! I wonder where you work, Biggie?

  6. Big,
    I think everyone will agree with you that the obvious and appropriate response to a government eating 60% of our productivity is to vote for parties and policies that eat less: a good argument for Brexit right there.
    My finely-tuned fairness detector shrieks at me whenever anyone makes a grab for more of someone else’s stuff. I am glad yours does too.

  7. The commission will take on the task of drawing up a tax that could be levied on companies or organisations that have pissed off or criticised the EU and which the EU have whipped up a media storm against via compliant media

    Fixed for clarity.

  8. “people have very finely-attuned fairness detectors”

    You must be talking about Laurie Penny, Dianne Abbott, Polly Toynbee. Their ideas of fairness seldom equate to mine. I rather take issue with the idea of objective standards of fairness

  9. They still don’t get that companies don’t pay tax. If you make Apple pay more (for example) they’ll just load the extra costs onto the cost of their phone – consumers will pay all of the tax (as they already do).

    Apple minimising the tax that it has to pay thus decreases the cost of goods for the consumer and should be celebrated (although I’m loathe to celebrate Apple)

    What we really need is a complete overhaul of the tax system (on the receiving and spending side of things) – but that’s never going to happen.

  10. @TTG,
    Aren’t most policy changes driven by rabble-rousing headlines rather than sober analysis by the enlightened electorate?

    @Julia
    I work, pretty much by definition, against the government.

    @Cofe,
    I will definitely be voting for a lower tax party. As the EU is by a country mile the cheapest level of government that I need to pay my tribute to, I’d prefer them to start wielding the axe at home.

    @VP,
    The EU’s approach seems to be to suggest a change in the law. Which may or may not happen, but this is the way things should be done. Right? Or do you prefer sofa government, nods and winks in private, thinly veiled threats, a la Blair/Obama?

    @BiH,
    Yet everywhere outside a few tiny places has corporation tax! I guess to deal with offshore ownership. I do get tax incidence.

    I even get that according to some Grand Unified Theory of utility maximisation there should be no tax on capital and all tax directly incident on labour and consumption. This theory is however not saleable to the voters for reasons, including that the resulting maximisation of utility rather blatantly goes to people who don’t need further maximisation of their utility, and the rest of us have to pay more to make up for it.

    If our theoretical maximum utility ends up with Scrooge McDuck swimming in gold while everyone else is ripped off by the government and left with very little, then sorry, the theory is wrong.

  11. Timmy,

    You’ll pay tax just because we think you should pay more.

    No – that’s not what’s being suggested at all, and you’re well aware of it.

    BiG,

    You’re absolutely right.

    Aren’t most policy changes driven by rabble-rousing headlines rather than sober analysis by the enlightened electorate?

    As with any new tax, it starts with someone in government thinking: “Look at all that money sitting there / changing hands / being earned, how can we get our hands on some of it?” That’s how we ended up with stupid taxes like Stamp Duty and Air Passenger Duty and Insurance Premium Tax. This is hardly a new development: in the distant past we had ridiculous taxes like the Window Tax and Hearth Tax.

  12. @AndrewM,

    It’s easy to tax things that don’t move. And my labour won’t either, bar emigrating (yet again). I see no reason why, in a world in which capital can move almost instantaneously, why there should not be some scheme to reasonably tax the contribution it makes to the creation of wealth.

    The simple fact that it can move so easily doesn’t seem like a good reason to not bother taxing it (if you can), and it certainly isn’t defensible to the bulk of people who have to make a 40-hour a week effort to stay alive, and have most of that confiscated by the exchequer. The EU (and indeed the entire OECD, which includes the UK last time I looked) is promoting changes to the law that will make that easier. Maybe it will increase the price I have to pay for a google search or a facebook post [/irony] but it should also allow the taxes on my labour to be reduced in compensation. And you will ahve a greater appearance of fairness, whatever that nebulous concept is.

    And you will note, when we had swingeing taxes on capital income we also had swingeing taxes on labour income. However, not even the hard left former communists (in Germany at least) are advocating a return to those days, so bar a certain East Anglian accountant becoming PM, I am doubtful the Taxpocalypse will actually happen.

  13. Andrew M: in the distant past we had ridiculous taxes like the Window Tax and Hearth Tax.

    Why do you say “ridiculous”? Glass was an expensive luxury so a rather effective (and progressive) measure. Hearth tax was an easy tax to apply though not always easy to collect thanks to various recurrences of plague during the second half of the 14th Century and the resulting depopulation and localised extreme poverty.

    Scutage was another useful minor source of funding for wars and the gabelle produced riots as well as revenue but neither would be much use today. That doesn’t make them ridiculous.

  14. @BiG
    I even get that according to some Grand Unified Theory of utility maximisation there should be no tax on capital and all tax directly incident on labour and consumption.
    Actually that’s not quite how I understand things. Certainly tax on labour and consumption is better than tax on Capital, but better yet is land tax. Tax on returns to capital is better than tax on capital but worse than tax on labour or consumption.

    It’s easy to tax things that don’t move

    And yet we got rid of the nearest thing to a proper land tax (domestic rates) and (eventually) replaced it with Council tax – which is capped. So the people who are really wealthy don’t pay anywhere near the same proportional tax as everyone else

    e.g. my house costs me just over £1k per year in council tax. If it was worth 8 times as much, I’d pay 3 times as much tax. If it was worth 800 times as much, I’d still just be paying 3 times as much tax.

  15. @TMB

    Not sure about ridiculous, but we seem to have a different tax for everything. Any chance we can simplify things a bit?

    If I were given absolute power to just enact one law that couldn’t then be rescinded, I’d make it so that any law that requires more than a 2 page summary is invalid

  16. @BiH

    Yes please – simplify it and let’s have less of it too. The complexity simply muddies the waters to disguise how much of people’s money gets hoovered up and squandered.

    I wasn’t defending window tax, merely saying that it wasn’t ridiculous in the terms of the period during which it was levied.

  17. “Maybe it will increase the price I have to pay for a google search or a facebook post [/irony] but it should also allow the taxes on my labour to be reduced in compensation.”

    The definition of optimism.

  18. TMB,

    The Window Tax was ridiculous because it encouraged the perverse behaviour of bricking up windows.

    It’s far from the worst tax though, I’ll concede that. Since only homeowners with more than ten windows paid the tax, it was reasonably progressive.

    A land value tax would obviously have been better. Parish tithes were calculated on that basis, so it was perfectly feasible.

    BiG,

    > It’s easy to tax things that don’t move.

    Ok, let’s tax things that don’t move:
    – Parents whose kids go to a good state school;
    – People with care obligations towards nearby family;
    – People who are members of local clubs or societies.

    Taxing all the above is a recipe for destroying society. When designing new taxes, we should consider the incentives created; not merely whether they are easy to levy.

  19. @AndrewM,

    We are already taxing enough nonmovable things. The rich and the poor pay those taxes.

    By not taking highly moveable things we are letting only the rich off that hook.

    We tax labour because it creates value, some of which goes to the labourer, some to the capitalist, and, the rest to the government that wants it to maintain the highways, pay the police, and lavish on junkets for MPs and civil servants and on other idle undesirables.

    If capital likewise creates value it should also be contributing to that, correct? Pretending it doesn’t really exist (when we know it does because of the chaos that ensues when you remove it) is the greatest neo-libertarian vanishing act of all time.

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