Crackdown on tax dodging a top public priority


by Don Paskini    
1:00 pm - December 18th 2012

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YouGov recently carried out a different kind of opinion poll. Instead of asking people whether they supported or opposed particular policies, they offered people the choice of different policies, and asked them to choose which they thought mattered more. Here are some of the results:

The policy which ‘won’ every time it was tested against any other was ‘Cracking down on companies that use accounting ploys to avoid paying profits tax in Britain’.

People backed a crackdown on tax dodging companies over a crackdown on welfare cheats by 52% to 39%.

Reducing unemployment was seen as more important than reducing inflation by 60% to 24%.

Improving the NHS was seen as more important than improving schools by 50% to 37%.

People were equally split on whether they favoured tougher sentences for criminals or tougher regulations on banks.

People preferred ending all immigration to leaving the European Union, but preferred cutting overseas aid to ending immigration.

Cutting overseas aid was seen as a higher priority than improving the NHS by 56% to 36%, but cracking down on tax dodging companies was seen as more important than cutting overseas aid by 57% to 34%.

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About the author
Don Paskini is deputy-editor of LC. He also blogs at donpaskini. He is on twitter as @donpaskini
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Reader comments


I’d have had to burn my passport if it had turned out the other way.

Interesting the way it ended up was to pit a broadly left-wing populist policy that’s reasonably sensible against a far-right policy that’s bonkers; the 34% can be bracketed as unwinnable Tory/UKIP base…

NB if you burned your passport you would never be able to leave!!

The public are, of course, correct.

Except when they are not: http://liberalconspiracy.org/2012/12/18/the-awful-state-of-public-opinion-on-immigration/

Shatterface: I don’t think this site has made a case either way, as indeed it shouldn’t.

This Lord Ashcroft piece broadly supports the 34% theory (not by direct polls, but in terms of the stuff he quotes in paragraph 5)

One of my history teachers at school told the class how he had attended a Nazi rally just before the 2nd World War and Hitler had said: “We do not want lower prices. We do not want higher prices. We want National Socialist prices.” And the crowd cheered. This yougov poll seems to show the same sort of effect.

At least John B thinks it great that the public prefers hand-wavy thingies that mean nothing – a crackdown on companies who pay the legal amount of tax due amounts to what, precisely?

“‘Cracking down on companies that use accounting ploys to avoid paying profits tax in Britain’.”

I suspect the public is not very clear what this means, as it blurs the distinction between legal tax avoidance and illegal tax evasion. Also, the public has little understanding of inter-governmental treaties that avoid the risk to companies of double taxation – I think the UK has had such a treaty with Luxembourg since about 1965 – nor does it understand how the EU single market encourages multinationals to bse themselves in the EU jurisdiction with the lowest corporate taxes.

More generally, I cannot see any justification for taxing profits, and the sooner corporation tax is abolished (or reduced to single figures) the better. The managers, employees and shareholders of companies pay income tax and NI. Companies pay local taxes, make NI contributions and collect VAT on their sales. Profitable companies should be encouraged, not penalised.

7. Derek Hattons Tailor

@ 6 They are not being “penalised”. Businesses need public services to operate. They need an educated workforce, a legal system, a stable society, an economic system, a currency. They need the Police, the Fire brigade, a transport infrastructure etc. They use public services just as much as anyone else, why should companies get that for free when everyone else has to pay ?
And the tax their employees pay is not paid by the company, it is deducted from their employees salaries.

“‘Cracking down on companies that use accounting ploys to avoid paying profits tax in Britain’.”

Hope someone’s going to come up with some examples soon.

Because all of the ones that UK Uncut have come up with so far have turned out to be busts. Vodafone, Boots, Barclays…..the latest one being Starbucks, where the reason they don’t pay a tax on profits is because, even after you reverse all the supposed dodges, they don’t make a profit.

“Businesses need public services to operate. ”

And public services need businesses to operate. Try running the trains without the supermarkets that feed the workers for example.

I agree that tax avoidance in principle should put its practitioners beyond the pale but any tax collected today is going not to pay for public services but to bail out the banks which means money taken out of circulation and a recession slowly becoming a full blown depression. It’s a triple whammy, cuts in public spending and increased taxation and the wanton debasement of the currency all to bail out the billionaire creditors of the bankrupt banks who then take the money and invest it in yet another stock exchange bubble and gold doing nothing in a Swiss vault. Centuries of accumulated national wealth are being liquidated and the balance sheet of the state is being ruined for this bail out because the government of the rich decided to guaranteed trillions and trillions and trillions of counterfeit liabilities and Ponzi Bonds. The US government is about to eviscerate spending on welfare raise taxes and is printing $85 billion a month in QE. The West is bankrupt. Austerity is mere embalming of the corpse whilst stimulus is like giving CPR to a headless cadaver. It’s socialism or barbarism.

do the torys not realize they could actually pull off a second term if

1) they only targeted benefit cheats an not legitimate disabled people ,

2) tugged in the mega corps tax dodgers which could pay the deficit

3) get back the tax from travelers (formerly known as gypsies) because they have been milking the tax system without paying in for at least 40 years

not only that they
have been ripping off old people.
with driveways an other building work,
(tax free)

Travelers have also been importing an selling hard drugs since the thatcher days , they drive around picking up underage teens an feed them drugs, drink an abuse them.(don’t say they don’t i have seen this happen since i was a teen i am 34 now i know a number of girls who have been abused by them)

4) if you take the drugs issue IM afraid the facts are clear free drugs stops crime an the methods to produce them is a minor cost compared with the billions it has cost in this endless un-winnable drugs war, the fact is it would cut burglary , robbery an shoplifting buy 95% in some areas it would totally get rid off crime all together,

end the war on drugs make it pointless to be a drug deeler because people can get it on prescription
an pay tax on it

the worlds elite use it but the public are not allowed it instead they are in poverty because of this right wing gov that does not like people thinking an making there life better they prefer
order out of chaos which is an always has been Totally DELIBERATE

an remember its not that cannabis is anymore a gateway drug then cigs an alcohol the difference is
that they new drug dealers sell your kids weed on the streets an they are the ones that also sell the coke an heroin so they push them up the ladder

which is a joke an this would not happen at all if
we had a legal system if not open then a system like the American card system but for anyone who is old enough not just patients, you need to realise that the old way has never worked never will work it makes things worse it caused the crimes you were a victim of an it can easy be stopped but they like order out of chaos instead

8. Tim Worstall

Starbucks not making a profit?

Cobblers.

Starbucks would not be here if it couldn’t make a normal operating profit (free of transfer pricing stitch ups and payments for royalties and licences).

Costa does, with a similar business model. So I – and most other reasonable thinking people – just don’t believe it.

6. TONE

Another tedious extremist.

Corporation tax should be raised of course. Back to 30pc plus would be preferable.

Corporates gain special privileges from the State by the ability to be artificial legal persons (limited liability etc).

Corporation Tax is the State’s just dues for permitting them those privileges.

Thankfully the public are in my camp on this, not yours.

“Starbucks would not be here if it couldn’t make a normal operating profit (free of transfer pricing stitch ups and payments for royalties and licences).”

Opinions are important of course. But so are facts. And FT Alphaville has actually gone and got the Starbucks accounts and looked at them. You know, counted the numbers? And put back in all those royalties, the Swiss coffee margin, the interest payments. And Starbucks *still* makes a loss in the UK.

That’s simply fact.

Tim: *made a loss in 2011*. The FT numbers imply Starbucks was profitable throughout the 2000s, e.g. during the years when management in the US were telling investors the UK business was profitable (despite the losses being recorded in its UK statutory accounts).

so John B admits that Starbucks UK made tax losses. One step at a time. Corporate structures can be tricky things. Do the management reporting structures mirror exactly the legal structures?

And for the Costa addicts – remember that holding companies like to bring profits into the countries where they pay out dividends. Starbucks will arrange things to get profits to the US. Whitbread will bring profit to the UK. So, if Costa operates outside the UK, what do you think happens in terms of tax avoidance?

well all the Starbucks i went too from south Cheshire to Manchester since the labor years till now where full of people buying dear coffee an over priced snacks

if a company as popular as they are is not making any money what the hell are they upto?

they are not the only tax dodgers are they ?
they have just been over recycled by the media to smoke screen the others

+ spending wars that the yanks would have
taken care of on there own if we had stood back

piling endless cash into the EU without audit
just like the fed in the USA,

to build up the rest of the EU(cough cough)
which has just ended making its self skint anyway

an look how much of it those liars creamed off the top sorry if this hurts anyone but i agree with many of the torys on Europe an immigration

Tony Blairs recent speech at chatham house an milibands recent talk in the commons its clear they are totally devoted too the EU.

I would like to see this country
go back to being the nation it was before
these German liars snook in by stealth

we can still be a powerful nation an anyone who says we cant go alone is wrong

have you not seen your history this nation can do
anything it puts its mind too an its about time some of you grew some balls an got us out of this mess an leave the
meltdown mess that is the comi EU
before it implodes in our faces

14. Tax losses can be conjured via accounting tricks and legal shenanigans that bear no relation to underlying commercial reality.

You obviously haven’t noticed but that is the whole point of this debate.

BenM @ 11

“Another tedious extremist.

Corporation tax should be raised of course. Back to 30pc plus would be preferable.”

Assertion but no argument, I see. Well, coporation tax rates are generally falling internationally; and the countries cutting corporation tax are not extremist or particularly right-wing. Germany is down to 15%, Ireland 12.5%, Austria 25%, Canada 26%, Denmark 25%, Finland 24.5%, Hong Kong 16.5%, Sweden 26.3% and the UK at 24%. There are exceptions such as France, currently enduring a socialist regime, is on 33.33%, but even this is lower than five years ago. See:

http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx

Raising corporation tax to 30% as you suggest would only make the UK economy even more uncompetitive. Increasingly, in a globlised economy in which corporations can relocate to the most favourable tax jurisdiction, the burden of tax will fall on individuals, not companies: VAT will generally have to increase, with the regressive effects of this on the poor alleviated through redistributive tax and benefit policies.

By the way, I can see you believe that corporations should be taxed, but do you realise on whom corporation tax actually falls? As Chris Dillow argues, one study in Europe showed that “in the long-run, 92% of any rise in corporation tax falls upon wages.” Furthermore, as Chris says, high profits lead to higher wages. Read (and, if possible, learn) here:

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2010/04/corporate-tax-incidence-some-evidence.html


Reactions: Twitter, blogs
  1. Liberal Conspiracy

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  2. Lance Dyer

    Poll: Crackdown on tax dodging companies top priority | Liberal Conspiracy http://t.co/VKrqfea3 via @libcon

  3. Korenwolf

    Poll: Crackdown on tax dodging companies top priority http://t.co/baKww65E

  4. Jason Brickley

    Poll: Crackdown on tax dodging companies top priority http://t.co/e4oEjtYo

  5. leftlinks

    Liberal Conspiracy – Poll: Crackdown on tax dodging companies top priority http://t.co/y7pzfcAA

  6. Guy

    People backed a crackdown on tax dodging companies over a crackdown on welfare cheats by 52% to 39%. http://t.co/QtDvCz52

  7. czol

    Poll: Crackdown on tax dodging companies top priority http://t.co/baKww65E

  8. Alex Braithwaite

    Crackdown on tax dodging a top public priority | Liberal Conspiracy http://t.co/gmUEpxow via @libcon

  9. maureen keane

    Crackdown on tax dodging a top public priority | Liberal Conspiracy http://t.co/M9HEd4eI via @libcon

  10. PLEBpissedatgov

    Crackdown on tax dodging a top public priority | Liberal Conspiracy http://t.co/gmUEpxow via @libcon

  11. ChurchActionPoverty

    Cracking down on tax dodging would be THE most popular policy for govt to enact: http://t.co/nsHm2ZO0 #closethegap #fairtaxes

  12. PXI

    Cracking down on tax dodging would be THE most popular policy for govt to enact: http://t.co/nsHm2ZO0 #closethegap #fairtaxes

  13. Bernadette Meaden

    Cracking down on tax dodging would be THE most popular policy for govt to enact: http://t.co/nsHm2ZO0 #closethegap #fairtaxes

  14. saramo

    Poll: Crackdown on tax dodging companies top priority http://t.co/baKww65E





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