Slashdot Mirror
UK Chancellor Confirms Introduction of 'Google Tax'
mrspoonsi sends this report from the BBC:
Companies that move their profits overseas to avoid tax will be subject to a "diverted profits tax" from April, the chancellor has said. In his final Budget before the election, George Osborne said firms that aid tax evasion will also face new penalties and criminal prosecutions. The so-called "Google Tax" is designed to discourage large companies diverting profits out of the the UK to avoid tax. "Let the message go out: this country's tolerance for those who will not pay their fair share of taxes has come to an end," Mr. Osborne said. In 2012 it emerged that internet giant Google avoided tax on £10bn UK revenue in 2011 by doubling the amount of money put into a shell company in Bermuda. Doing so helped it avoid £1bn in corporation tax. Under the new tax regime, companies with an annual turnover of £10m will have to tell HM Revenue & Customs (HMRC) if they think their company structure could make them liable for diverted profit tax. Once HMRC has assessed the structures, and decided how much profit has been artificially diverted from the UK, multinationals will have only 30 days to object to the 25% tax.
Meh, everyone loves to put nice labels on themselves and then try to dissociate from the bad aspects from them. Just like the "communists" who claim no country on earth is really communist. What China, Cuba and NK do is "just the opposite".
Really? And it's never because Comcast either bought the competition OR pushed them out of business out of unfair competition?
Never ever ever?
A consumption tax is inherently regressive. Those with smaller incomes must use a larger proportion of it on consumption. The wealthy will spend a comparatively tiny fraction of their income on tax and continue to amass vast piles of money.
I'd prefer to see an approach where the corporate income tax is abolished and replaced by higher capital-gains and dividend taxes on the owners
He will do because its a big topic over here in the UK, and has been for a while.
Personally, I applaud Osborn for doing it - for once we aren't saying "hey, you know those rules we made for you to adhere to? Well, we have decided that there are these other 'rules' as well which we would like you to adhere to, and we will say nasty things about you if you don't. Are they legally binding I hear you ask? Well, no, but that won't stop us from thinking you should be restricted by our second set of 'rules'..."
Instead, we are actually getting something done about the rules under which companies should be paying tax. As a lot of people have said all along, fuck the spirit of the law, apply the actual law. If the law doesn't say what you want it to say, change it. Don't try and bully people into following your additional 'voluntary' rules which you want to make over and above the actual laws.
What's the value of the UK government to Google?
It prevents the Google offices and datacenters from being raided by SWAT teams in the early hours. A very valuable service.
How inappropriate to call this planet Earth, when clearly it is Ocean.
The typical libertarian who wants complete deregulation of *everything*
No, you've described an absolutist Libertarian. This is like saying the typical Socialist wants no privately owned possessions.
Indeed. Appeal to extremes is a logical fallacy. Equating libertarians with anarchists, is as silly as saying that progressives are communists, or conservatives are fascists. If someone is for X, it does not follow that they are for an extreme form of X.
As a Libertarian, I think we should have less regulation than we have now. But I am in favor of regulations that reduce monopolies, and promote competition. I am also in favor of regulations that address market failures. For instance, the "free market" is not going to reduce pollution.
As for this specific "Google Tax", I don't specifically object. If you are going to tax corporate profits, then you should tax them fairly. But stepping back, and looking at the big picture, I also think that taxes on profits are really dumb. You are taxing productivity, investment, and job creation. Far better would be a flat tax on company revenues, higher taxes on dividends, or higher taxes on personal consumption, to encourage reinvestment.
They provide a country in which Google can make over 10 billion pounds a year. That's something Google should pay towards helping, surely. It's not grabbing their money, it's taking back the money they asked for and were not paid, by Google moving some numbers around between banks, in a direct, purposeful attempt to keep as many of those numbers as possible, to the detriment to the markets in which they made said money.
But I guess bitching about governments is more fun.
It is very important to understand that an "unregulated" market, and a "competitive" market are not the same thing, and are often opposites. The government should promote competition, and sometimes that means more regulation, not less.
The real problem is regulatory capture and the revolving door between the regulating agencies and the industries they're supposed to be overseeing. I think we need laws stating that anyone who has ever worked for an industry, and their immediate families and their known business associates, is not allowed to work in any capacity for a regulating agency, and vice-versa. The penalty should be ten years imprisonment with the general prison population, and the law should include a $50,000 bounty for the police officers, prosecutors, and any informants who successfully convict anyone guilty of this crime.
If that sounds harsh, consider the harshness of living under a government that no longer represents its people.
It is a miracle that curiosity survives formal education. - Einstein
Hidden taxes like corporate income tax really abuse the low income population. Alas, demagogues find it easier to pretend otherwise for personal political gain.
So how will taxing Google's profits abuse the low income population? Perhaps google will quadruple the cost of search in order to pass on the cost...
SJW n. One who posts facts.
BEcause it taxes the poor and middle class more at the expense of those who could afford it most. It is inherently wrong, morally and unjust.
When you cant win, ad hominem.
So how will taxing Google's profits abuse the low income population?
Google will increase advertising prices to make up for the lost income, which will cause advertisers to increase prices to make up for increased advertising costs, which will cause the low income population to pay more for the things they'll buy.
Or, if they can't increase prices, their reduced profits will result in reduced dividends and stock price, so those low income people stashing away a few pounds a month in their pension fund will find it's worth less when they come to retire.
What do you think happens when the government sucks more money out of the productive economy? It's made up for with unicorn farts?
Nice theory. 'til the GOP gets into power and decides that anything but a box to live in is luxury and shouldn't be in this "prebate" thing.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
No, Libertarians piss off both the left and the right. That's how we know we are correct.
By that definition, Scientology and ISIS sure got everything right, too.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
OK, I'll try to put this in simple terms and math for ya.
Let's assume you're making $1000/mo and you need $900 to live. If you pay a 10% tax, you're left with just $900, which means:
* barely affording enough to live, and most important:
* no money left for "consumption"
Which is bad, because that extra money is what drives tourism, hobbies, and all other sorts of activities you do to "enjoy your life". "Barely affording enough to live" is basically the same as communism.
Now let's take Mr. CEO making $1M/mo and needing $100K/mo to live. Take 10% off him and he still has $800K at the end of the month. Which he will, most likely, put in the bank (or stock market) for even more money (probably money they will loan to Average Joe who can't afford a new car).
You see: not everyone is equal. A wealthy person has *more* spending at the end of the month (bigger house, more power, employees), but still has money to spend. Barely Living Joe has much less spending, has to sacrifice a lot of luxuries. And yet, they both are paying "10% tax".
In other words: a flat tax "hurts" the poor much more than it hurts the rich.
A simple image to put it as an example: http://ctworkingmoms.com/wp-co...
Now, again, why do you want Average Joe to have more cash in hand at the end of the month? Because Average Joe is much more likely to *spend* that money, which drives the economy, rather that putting it in a bank.
Maybe in America, but here in Europe, tax is seen as the wheel to steer the ship of state, and social engineering is seen as important to maintaining a state in which the police do not shoot (many) people, and they don't (often) shoot back.
Sent from my ASR33 using ASCII
Actually, what used to happen with higher tax rates was the rich didn't get richer as fast and the money was more evenly spread about, actually driving the economy through spending and benefiting more people.
I totally agree with you and you are absolutely wrong.
The "Google tax" law that Osbourne wants to enact appears to be little more than saying "any money stream we would like a piece of, we're gonna take". As far as I've been able to find out there really isn't much more to it than that. That's not a law, that's bringing back the reign of kings. It's been obvious for a long time now that the Tories have no coherent theory of how they want the global tax system to work. They just want more money.
It's not even clear why they need one. They already passed the General Anti Avoidance Rule (GAAR) which basically says "anything a reasonable person would find unreasonable is illegal", i.e. it suspends tax law entirely in the UK and replaces it with the whim of whoever is running the Revenue at the time. Given that they did the GAAR a few years ago already it seems they're implicitly agreeing that the arrangements of these companies is reasonable and legal but they want to undo it all the same.
The big problems this tax is going to run into are both legal and fundamental. The legal issues are that simply grabbing money in violation of the existing systems violates tax treaties. The UK is potentially setting itself up for a world of hurt if other countries decide it's now open season on British companies. Bear in mind the Tories have lowered corporation tax to attract companies from other countries to London. If, say, France, decides that a company is "diverting profits" out of France to the UK and pulls the same shit then the country could find itself ending up with less money than before, not more.
The second problem is that what it means to "divert profits" is left undefined. How do you carve up a company like Google across national borders? When someone clicks an ad in the UK, is that profit made in the UK because that's where the user is? Or California because that's where the ad system was developed? Or Germany because that's where the datacenter is? Or Ireland because that's where the sale was made and where the advertiser sent the money to and had the contract? Or all of them? Currently the system is it's Ireland because that's where the company with which the contract was signed is.
It gets even more convoluted. What if a British user never clicks ads and so is a net loss for the company. Do you then offset all those users against the revenue generating ones? How much does it even cost to serve the search result to a British user? They're using global, shared resources, so do you divide up the global costs by population? By usage? How do you even calculate profit by product when it's all integrated, let alone by country? And how do you stop the red tape required to calculate whatever arbitrary metrics are used from becoming overwhelming?
How will they even collect that tax? What if Google and Facebook shut down their UK offices?
The Tories have answers to none of these questions. They have no thinking behind this deeper than "let's grab some foreigners money and use it to buy off pensioners". The Treasury admitted they are assuming zero businesses will pull out of the UK because of these changes. How this will impact the global tax system, the costs of it, the chances of blowback? Unstudied.
The whole thing is an astonishing abandonment of a system of rules and laws.
Again, the point of my original comment still stands: Slashdot Libertarians are defending the ultra-rich, as if they have any remote chance of becoming that rich.
It's just amazing.
Hey dude, wake up... the day you'll be as rich as Buffet you'll be able to skew laws in your favor anyway. Don't worry about that.
I don't know what's up with people defending the likes of Warren Buffet or any other guy who got rich by pure financial speculation. I'm not a marxist, and I have some money in investment funds. I just don't believe people who are that disgustingly rich should be given any mercy when it comes to taxing. They have all sorts of schemes NOT to pay taxes (like, precisely what this article says: sending their money abroad).
For a more graphic example: What makes the economy "move" more?
1 million Average Joes buying a six pack?
or
1 Rich CEO buying a $50K Rolex?
Consider how many people you need to produce 6 million cans of beer, distribute them across the country, put them in shelves, sell them, etc.
And how many people are involved in IMPORTING one watch from England and putting it in a shelve, and selling it?
Are there more walmarts, or boutique stores that sell Rolexes?
Again, as I said, Mr. Rich CEO will, most likely, invest his money. The bulk of that money just goes into the ridiculous "full circle" financial system that allows DEBT to be considered an ASSET.