No shit Murphy. Look to your lefty friends in power for examples of that. Quite frankly, the £16m ‘saved’ by Tesco in tax is better off in the hands of Tesco, the schools it donates a similar amount to, its customers, the shareholders, in fact, pretty much anyone other than your neo Maoist friends that would rather people die ideologically pure than live ‘unequally’.
Quote”a saving for Tesco by getting a deduction of interest paid in Tesco Overseas….at a higher tax rate than is suffered in Zug: the differential is nothing short of a government subsidy to Tescos”
Richard Murphy’s confusion between ‘paying less tax’ and ‘a government subsidy’ undermines everything he has to say.
Kay Tie
17 years ago
“Richard Murphy’s confusion between ‘paying less tax’ and ‘a government subsidy’ undermines everything he has to say.”
I didn’t get beaten up and robbed yesterday. I’m clearly being subsidised by the street criminals in my town.
BlacquesJacquesShellacques
17 years ago
Murphy is wrong, again.
What he fails to note is:
1. the mechanism he describes is still required to meet all of the ‘reasonableness’ tests contained in every tax code. Tesco cannot just ‘give’ money to some foreign company, whether it controls it or not. Either the tax people or the shareholders will scream. There must be a plan and an expectation for a reasonable return. I think that it is entirely up to the business owners to judge the plan and not either the state or the Murphy-ish busybodies.
2. At best the mechanism can delay tax so as to let money accumulate abroad.
3. The result of 1 and 2 is that Tesco must expect, over the long term, a higher rate of return, than if the money were merely flowing back straightaway.
4. Murphy might complain that the money might be left abroad forever, but the money accumulated abroad is not usable by Tesco shareholders until it is sent back to the UK. When that happens taxes will be paid and will be much larger than if paid now, because they will have added taxes on the profits made with the deferred taxes. Normally I would not even mention that if the UK had lower corporate taxes it would probably rake in more corporate tax money, but with a man like Murphy one must mention the obvious. Wouldn’t it be nice if foreign firms invested in the UK because of its low tax rates?
5. The mechanism is at worst a tax deferral scheme and not an avoidance scheme.
6. It is impossible to say just exactly what the scheme is or will do. It might be a liability avoidance scheme. It has risks – the dirty foreigners might increase their taxes and garb that nice pool of tax deferred money.
Murphy’s whole argument boils down to two things. First, a demand that business be required to maximize immediate, short term, income so as to maximize immediate taxes and be barred from any long term investments, especially investments abroad, that show no or little immediate return. Typical socialist: “Stand and deliver – now”.
Second, Murphy thinks he knows better than Tesco’s directors the risks, rewards and timing thereof, for a foreign business investment. Murphy is quite sure that Tesco must have 6% every year rather than 0% for 10 years followed by 20% forever, or whatever. It’s none of his business, nor the state’s.
This attitude of the state that it is a partner in your business because it gets a piece of the profit is arrogant beyond belief. Next we’ll have the state suing corporate directors for lost taxes if a venture fails.
Can you help support The Blog?
If you can spare a few pounds you can donate to our fundraising campaign below. All donations are greatly appreciated and go towards our server, security and software costs. 25,000 people per day read our sites and every penny goes towards our fight against for independent journalism. We don't take a wage and do what we do because we enjoy it and hope our readers enjoy it too.
Can you help support The Blog??
If you can spare a few pounds you can donate to our fundraising campaign below. All donations are greatly appreciated and go towards our server, security and software costs. 25,000 people per day read our site and every penny goes towards our fight for free and fair journalism. We don’t take a wage and do what we do because we enjoy it and hope our readers enjoy it too.
“Legal conduct can be unethical.”
No shit Murphy. Look to your lefty friends in power for examples of that. Quite frankly, the £16m ‘saved’ by Tesco in tax is better off in the hands of Tesco, the schools it donates a similar amount to, its customers, the shareholders, in fact, pretty much anyone other than your neo Maoist friends that would rather people die ideologically pure than live ‘unequally’.
http://www.timesonline.co.uk/tol/life_and_style/health/article4040146.ece
Quote”a saving for Tesco by getting a deduction of interest paid in Tesco Overseas….at a higher tax rate than is suffered in Zug: the differential is nothing short of a government subsidy to Tescos”
Richard Murphy’s confusion between ‘paying less tax’ and ‘a government subsidy’ undermines everything he has to say.
“Richard Murphy’s confusion between ‘paying less tax’ and ‘a government subsidy’ undermines everything he has to say.”
I didn’t get beaten up and robbed yesterday. I’m clearly being subsidised by the street criminals in my town.
Murphy is wrong, again.
What he fails to note is:
1. the mechanism he describes is still required to meet all of the ‘reasonableness’ tests contained in every tax code. Tesco cannot just ‘give’ money to some foreign company, whether it controls it or not. Either the tax people or the shareholders will scream. There must be a plan and an expectation for a reasonable return. I think that it is entirely up to the business owners to judge the plan and not either the state or the Murphy-ish busybodies.
2. At best the mechanism can delay tax so as to let money accumulate abroad.
3. The result of 1 and 2 is that Tesco must expect, over the long term, a higher rate of return, than if the money were merely flowing back straightaway.
4. Murphy might complain that the money might be left abroad forever, but the money accumulated abroad is not usable by Tesco shareholders until it is sent back to the UK. When that happens taxes will be paid and will be much larger than if paid now, because they will have added taxes on the profits made with the deferred taxes. Normally I would not even mention that if the UK had lower corporate taxes it would probably rake in more corporate tax money, but with a man like Murphy one must mention the obvious. Wouldn’t it be nice if foreign firms invested in the UK because of its low tax rates?
5. The mechanism is at worst a tax deferral scheme and not an avoidance scheme.
6. It is impossible to say just exactly what the scheme is or will do. It might be a liability avoidance scheme. It has risks – the dirty foreigners might increase their taxes and garb that nice pool of tax deferred money.
Murphy’s whole argument boils down to two things. First, a demand that business be required to maximize immediate, short term, income so as to maximize immediate taxes and be barred from any long term investments, especially investments abroad, that show no or little immediate return. Typical socialist: “Stand and deliver – now”.
Second, Murphy thinks he knows better than Tesco’s directors the risks, rewards and timing thereof, for a foreign business investment. Murphy is quite sure that Tesco must have 6% every year rather than 0% for 10 years followed by 20% forever, or whatever. It’s none of his business, nor the state’s.
This attitude of the state that it is a partner in your business because it gets a piece of the profit is arrogant beyond belief. Next we’ll have the state suing corporate directors for lost taxes if a venture fails.