Wednesday, March 23, 2011

Corporation Tax - Raise in Bank Levy - HUGE Con by Conservative Government.

Listening to the chancellor gloating about reducing corporation tax, again have just spotted a huge con. He said that he is reducing corporation tax but is raising the bank's levy to off-set the lower corporation tax. This is a colossal sleight of hand by the chancellor, Barclays bank in 2009 made billions of pounds in profit yet it paid just £113 million pounds corporation tax. So it really does not matter how much corporation tax is lowered, if there remains loopholes in which banks like Barclays can use to pay less corporation tax, it matters NOT what corporation tax is set at!

23 comments:

ToryBoy said...

So you'd have increased taxation and driven the likes of HSBC and Barclays to set-up their HQs in other countries, thus losing all corporate, NI and income tax revenues in the process?

Gideon said...

If Labour were so anti tax loops why did you do nothing about them from 1997 to 2010? Or was it the 157 new taxes brought in over the same period which suffocated businesses driving them to look to pay taxes overseas of find loopholes?

Gracie Samuels said...

Interesting to see that know I'm right, I'm wondering when the press will pick up on it.

Equally when will they pick up on the big con that this is reduction in fuel? Because of Osborne's VAT rise, fuel increased by 3p litre, so we are still paying 2p more.
Useless budget by a fiscally retarded chancellor and the cuts haven't even started yet, if it is this bad now, what will it be like in the next 12 months? Oh and did you see that Osborne tried to bury bad news? I knew he would so I purposefully looked out for it, and that is the ONR expect there to be a rise of 113000 extra unemployed? How is that going to bring the deficit down?
Stagflation, stagflation, stagflation and that is if we are extremely lucky.
The only good thing is of course, this government will be brought down pretty soon, probably over their NHS reforms, so hopefully we can get some people back that actually know what they are doing, as opposed to a chancellor that has a 2nd in history!
Oh and if labour suffocated business, why was there so many new and successful business start ups under them? All these manufacturing companies that are doing so well did not just start up last May 2010.
Now run along and play in the sand pit before the sun goes in. (You know it makes sense)

Gracie Samuels said...

Oh and as you mention NI, funny that, the Tories when in opposition said that they would not increase it. TBH they didn't (for employers) however, employees NI is now rising. Tax on jobs wasn't it Osborne and Cameron called it?

Nicky said...

You are correct, Gracie.

Sock it to those dim-witted Tory boys, Gracie.

Re Boy George's degree, where he signally failed to shine. He studied Modern History - and you'd assume he'd have read a bit about the 1930s. They tried what he's doing in the 30s - ie austerity measures - and it was a horrible failure, causing the Great Depression. If he'd gained anything from three years of study, he should at least have taken that on board.

Nicky said...

I didn't mean to use your name twice there! Sorry!

ToryBoy said...

Well done for not addressing teh question I asked you Gracie yet instead go on a longwinded and off topic rant about the NHS and then throw a few juvenile insulst in for good measure.

All rather transparent Im sure most would agree!

Gideon said...

Nicky - What was Gordon Brown's degree course? Yep. History same as GOs.

Perhaps that’s why he could be insightful when he said "When a nation loses control of its finances - it is the poor who suffer most", or when he said “I’m no economist in his book ‘Beyond the Crash: Overcoming the first crisis of Globalisation’ or when he said via his barrister “"manifesto pledges are not subject to legitimate expectation" just after Labour had brought in tuition fees despite campaigning the previous GE with a pledge not to do so,

Alistair Darling's? Law.

Let Gracie "sock it to us" because at least she can string a coherent argument together. Even if it is on a subject matter not being discussed.

Love and kisses Gideon xxx

Call me Dave xXx said...

"All these manufacturing companies that are doing so well did not just start up last May 2010."

Really? Why has manufacturing GDP reduced by three times the amount it did under Maggie compared to under Labour?

This is the problem with you lefties. You believe what you want to rather than dealing with facts.

Call me Dave xXx said...

Ooops that should have read
* "three times more under Labour than it did under Maggie"

Gracie Samuels said...

Call me Dave. Margaret Thatcher decimated the manufacturing industry in this country. Steelworks, Mining and ship building to name but three.

Also no GB did not do much to seal up the tax loop holes, more fool him he should have done, however, that does not make what is going on now regarding Corporate taxation right.

Nicky, I believe that was a 2nd in history George obtained.

With regards to GB's degrees I think they are impressive if I remember correctly, no time to look it up now though. However, just as an aside, I believe the two Ed's both studied economics etc as did Yvette Cooper - impressive.

Call me Dave xXx said...

Yet Labour decimated 3 times more than Maggie did. This is a fact you cannot get away from I’m afraid.

Gracie - It’s a proven economic principle that if you drop corporation tax and make your country a more attractive place to do business (and pay their taxes in) tax revenues actually increase in the long-run not drop off.

Yes GB got a 1st and PhD in History, and then went on to work as a journalist before joining the Labour party in the late 70s. However the grades achieved were not the point you or Nicky were making. You implied that GO didn’t know what he was doing because he studied history. The same subject that Gordon studied.

Ed Balls gained a 1st from Oxford in PPE (same as David Cameron) and then did a Masters at Harvard. He was Gordon's advisor when he was CotE so such a strong academic track record does not guarantee that one is as successful in the real world given that Gordon oversaw the creation of the biggest debt since WWII.

Ed Milibland - PPE from Oxford, MA in Economics from the LSE.

Bill said...

Toryboy,

You say:

“So you'd have increased taxation and driven the likes of HSBC and Barclays to set-up their HQs in other countries, thus losing all corporate, NI and income tax revenues in the process?”

So how do you explain that the US, Japan and Germany, all of whom have higher corporate tax rates than the UK, all of whom have better performing economies have never experienced the mass exodus you describe?

Bill said...

Call me Dave xXx

So you think:
“ It’s a proven economic principle that if you drop corporation tax and make your country a more attractive place to do business (and pay their taxes in) tax revenues actually increase in the long-run not drop off.”

There is no empirical relation, most of its support is ideologically based. You would say under this premise that Ireland, then, enjoys much better tax revenue than the UK. Studies have estimated that a 1% tax drop means a decline in revenue to the government of about £900 million. Where do you see the slack being made up. And please do not try and say that the UK airports will be overloaded with eager businessmen lining up to enjoy the corporate tax have.

Call me Dave xXx said...

Or you could choose the evidence of when Hong Kong dropped their corporate and personal tax rates and saw an increase in tax revenues with 5 years.

When they implemented this their per capita GDP was 3 times less than ours, now its far in excess of ours.

Bill said...

thats tax haven, sorry

Call me Dave xXx said...

Labour implemented a measure of this from 2008 for certain companies (I think the most recent was a GSK business unit which would have gone overseas) to attract them to set-up in the UK. This resulted in them (GSK?) deciding to build a new facility in the UK which created 1000 jobs, thus bringing in both corporate and personal tax revenues from those employed there and the profits of this business unit itself.

Bill said...

Call me Dave xXx,

A UK to Hong Kong comparison is spurious. There is no similarity to their base, Germany or France would be more accurate comparisons, or, if you wish, kindly outline the many industrial sectors making up Hong Kong’s mixed economy.

Call me Dave xXx said...

It wasnt before they implemented the measure.

The idea of a tax haven is to make your economy more attractive to companies so the WANT to pay their tax there rather than elsewhere. What is wrong with this? Do you not want business to set-up in the UK or would you rather they went abroad and in the process lose jobs and tax revenue?

Call me Dave xXx said...

Bill - it’s an example of what can be achieved not a direct comparison and was never meant to be, as I’m sure you’re aware.

However if you'd rather paint yourself as a pedant to avoid the facts provided then go ahead.

Bill said...

Call me Dave xXx,

First point,

With globalization there is no automatic relationship between where profits are declared and where production is undertaken. So what can be achieved by tax concessions is marginal at best. A second point to consider is that when taxation on profits is reduced, it does not necessarily feed back into the economy concerned via reinvestment or creation of new jobs. The most likely result is repatriation of these funds to shareholders in the form of share appreciation or larger dividends. The potential of what can be, as far as the nation is concerned, is marginal at best. The UK is not Hong Kong, Sark, Grand Cayman, etc. There is nothing pedantic in this.

Secondly, the model implied by your position and that of Toryboy fail to consider the impacts of derivatives, leverage buying, hedge funds, etc. The model could perhaps apply if HSBC or Barclays were of the scale and scope of your local news agent, but not in to current diversified and multilayered economies. For example, the rise of Asian productivity or the growth of China is not explained under your assumptions,

Gracie Samuels said...

Actually no it is not a proven "economic principle" that lowering corporation tax attracts inward investment. Ireland had to lower it to a silly level before it got that. In fact there is evidence that lowering corporation tax doesn't make that much difference. Which is why it is widely acknowledged that George Osborne is taking a huge gamble in doing this.

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A bank levy is an IRS/State collection tactic, in which your bank is forced to freeze any and all of your accounts and all the funds therein. The bank must hold your funds frozen for 21 days, at the end of which, if the tax debt is not resolved, the money is transferred to the IRS/State.