Tuesday, 20 December 2011

Corporate Tax Evasion

Many newspapers have led today with the story of Her Majesty's Revenue & Customs (HMRC, or as colloquially known in my trade of financial services, 'the Enemy') being accused of double-standards when it comes to collecting tax from big companies.

As many of my regular readers (I am assured there are a few!) will know, the taxman is no friend of mine. Indeed, the taxman is a thieving bastard who puts his hand up your shirt and squeezes your tit until it turns purple, gives your hard-earned cash to politicians, who then proceed to spend it on alternative dance classes for reprobates.

I think that, generally, we pay far too much tax in this country, and that the current level of tax is actually hampering the economic growth that we so desparately need, and indeed, is actually reducing the amount of money we collect in tax.

However...

I also believe a little thing called the Rule of Law.

Now, the Rule of Law is a very important thing. It means that we have a set of rules which are supposed to be uniformly enforced, and that everyone - from the richest old thain in the county, to the lowliest serf in the field (apologies to Rudyard Kipling) - is equal before it.

Now, at this point, it would be helpful for a little explanation of another set of concepts which are often misunderstood and confused with each other: tax avoidance, and tax evasion.

Tax avoidance is the careful arranging of your financial affairs, or your company's financial affairs, so as to minimise or negate any tax charge before that tax charge is incurred. In other words, planning to make sure you don't pay any more tax than you absolutely need to.

Tax avoidance is perfectly legal, and in the case of companies, I would absolutely expect it's officers to engage in as much tax avoidance as possible, as their primary duty is to return a profit to their shareholders. I engage in tax avoidance when I pay money into an ISA. We all engage in tax avoidance when we pay money into our pensions. Tax avoidance is good. It legally deprives the bastard, thieving Enemy of funds.

Tax evasion is deliberately not paying tax that is due. Tax evasion is illegal. Tax evasion is, effectively, fraud - the deliberate deprivation of monies that are due to the State.

So, putting aside the argument that tax in this country is generally too high, I expect anyone and everyone to do everything they possibly can to legally avoid paying tax. But, the Rule of Law must apply, and it must apply uniformly. In other words, HMRC shouldn't be corporate shills happy to be fellated by the board of Greedy Fuckers plc in exchange for illegally scrubbing millions of pounds off their tax bill, but be happy to screw small businesses in the arse until their mouths bleed. And if certain people working in said HMRC are accused as such, the following should happen:

  • Evidence of said behaviour should be produced, and passed to the Chancellor of the Exchequer and the Police;
  • The relevant accused should be suspended, pending the outcome of a Police investigation;
  • The outcome of the Police investigation should be passed to the Crown Prosecution Service, to decide whether a prosecution is in order;
  • If a prosectution is in order, the accused people should be arrested, charged and tried in open court;
  • If found guilty, they should be sacked for gross misconduct, and sentenced according to the severity of their crime. Given that it is likely to amount to a multi-million pound fraud, a custodial sentence seems appropriate.
And of course, the same should be applied to the greedy, cocksucking fuckers who decided it would be a good idea to fellate them in the first place.

Nice little backhanders for HMRC. My backhander involves a fucking knuckle-duster. Cunts.

That's the Rule of Law. Uniformly enforced.

Once that shit is out of the way, then we can have a nice little chat about perhaps, why, we pay so much bloody tax, why so much of it is wasted on diversity co-ordinators, equality outreach officers and fucking useless Council Chief Executives on £250,000 a year, and wouldn't it be nice if we all paid a lot less.

Bastards.

Friday, 16 December 2011

The French

Following Cameron's veto of a new EU treaty, which would have involved further transfers of sovereignty to Brussels, it appears that the French are resorting to their favourite pastime - Anglo-bashing.

The President of the Bank of France is criticising Britain's economic condition, and saying that we should be downgraded by the major credit rating agencies.

Allow me to explain, in very simple terms, why we are not fucked - and the French potentially are.

A country is effectively a legal structure separate from an individual. It has income, in the form of tax revenue, and expenditure, in the form of public spending. It gets into trouble if it starts spending more than it earns.

Britain is currently spending more than it earns. But unlike an individual or an ordinary corporate body, it has a degree of flexibility. For if it cannot borrow the extra money it needs, or cannot afford to make the repayments on the debt it already has, it may choose to create more money out of thin air to satisfy this debt.

Of course, this is a power not to be used lightly - it deliberately devalues the wealth of everyone in the country, and pisses them off as a result. If used excessively, it can lead to hyperinflation, which is particularly unpleasant.

But the crux of the matter is this - if you are in control of your own currency, it is almost impossible for you to go bust. You are sovereign. That is a reason why our currency was once called the Sovereign.


France is not in control of her own currency. She abrogated that responsibility to the European Central Bank, and, de facto, Germany. Therefore, she is not sovereign. She is a body corporate, just like any other company or mutual. And they can go bust.


I'm not saying they definitely will. I'm just saying that, by opening her legs to Germany, France is much more likely to than us.

See, Frenchies? You fucked up big time, although that's not unheard of, is it? I mean, coming from a country whose greatest military leader was a Corsican dwarf with venereal disease, or arguably a teenage girl with a fetish for armour who hears voices, who you couldn't even be bothered to pay the ransom for, and were much happier for us to cook her.

And let's have a look at France's greatest military moments, shall we? Crecy. Poitiers. Agincourt. Moscow. Trafalgar. Waterloo. And let us not forget the efficiency of the Maginot Line, which held back the tide of the Nazi invasion... oh, wait.

So, just remember, numpties, that having spent the last thousand years having the shit kicked out of you by us, that you wouldn't even be speaking French if we and the Yanks hadn't bothered to pay Normandy a visit in 1944. You owe your freedom to les anglais, which makes it all the more ironic when you promptly give it to Germany, the other nation that's been smacking you senseless for the last millennium.

The only areas where you are qualified to provide us with lectures are wine, cheese, bread, cruelty to geese, and, of course, losing. We can get wine from Australia and the US, cheese from the Dutch, bread we can make ourselves, raping poultry isn't the done thing, and we tend to win our wars.

Hush now.

A Frenchman, yesterday, surrendering just in case.

Wednesday, 14 December 2011

Labour's Five-Point Plan

Labour keep on banging on about jobs and growth, and how we'll never get out of the mire if the economy doesn't start growing.

And, of course, on that aspect, they're right. The economy is stagnating, largely because of the ongoing confidence shortfall because of the Eurozone mess.

They have laid out their plan for economic growth here:

  1. A £2billion tax on bank bonuses to fund 100,000 jobs
  2. Bringing forward long term investment projects
  3. Reversing January's damaging VAT rise
  4. A one-year cut in VAT on home improvements
  5. A one-year break in National Insurance.

Okay, point one. Taxing the most productive aspects of our economy (in terms of revenue) to fund more people on the public payroll does not stimulate economic growth. It's just shuffling the pack. If you want to genuinely stimulate economic growth, get people doing real jobs in the private sector, not pushing bits of paper around for the Government.

Point two. Building infrastructure is all well and good - it has a positive effect on private sector growth. How do you plan to pay for it? If you say 'borrow more money', I'll be sorely tempted to hit you in the face. Repeatedly. With a cricket bat.

Point three. I didn't agree with a VAT rise in the first place - it artificially raises prices, and stifles consumer demand, which is generally bad for the economy. However, cutting it now will make no difference - struggling companies will not pass the cost onto consumers and simply absorb it into their own profit margins. A little more creative thinking is required.

Point four. Your stated aim is to help home-owners and small businesses. That's nice, but I think they'd be better served by actually having the money to afford the things in the first place, don't you? Plus, how are you going to fund it? The aforementioned cricket bat is now being hafted, and test-swung.

Point five. The only point I agree with so far. Employer National Insurance is effectively a Payroll Tax - it should be cut as soon as possible, but on a permanent basis, with a view to abolishing it in the next 10 years. I'd fund it through much deeper spending cuts, especially in benefits, healthcare and education, where huge amounts of money are wasted on bureaucracy rather than public services.

Identifying the symptoms, not the cause.


My plan:
  1. Cut spending. And I mean deeply. Ministers should go into their departments, roll up their sleeves and start cutting out vast swathes of middle management and bureaucracy that do absolutely fuck-all. The current spending cuts don't go far enough, and are just being passed down the line until the front-line workers lose their jobs. This is not the way a business would do it;
  2. Rather than direct capital spending on infrastructure projects, open it up to the private sector. Invite offers on installing super-fast broadband at no cost to the taxpayer, in exchange for exclusive contract rights for 10 years. You will have telecoms companies queuing out the door then. Extend the same for roads and rail. But for God's sake, apply a bit of common sense - not every private sector involvement has to end like Brown's PFI fiasco;
  3. Merge National Insurance with Income Tax, and increase the Income Tax threshold to £15,000, delivering big tax cuts to the lowest-paid. Match this with big reductions in the rump Employer National Insurance (Payroll Tax) to make it a lot cheaper to employ people. Limit benefits payments to 80% of the net minimum wage - no one out of work should ever be paid more than someone in work full time;
  4. Cut burdensome and ineffective regulations which tie business's hands, and stop new entrants to the market. Break up the big banking cartels by forcing organisations with more than 15% market share to divest their assets, putting more banks on the High Street. Competition will increase, and they'll start lending again. If they continue to act as a cartel, threaten negative interest rates and prosecutions.

Interesting to note that the Government aren't doing much of this either. The jackasses.

Saturday, 10 December 2011

Keep Calm and Sod Europe

To my great surprise, Dave actually grew a backbone and exercised the UK's oft-spoke-of-but-hitherto-unused veto to block the passage of an EU treaty.

This proposed treaty had several purposes:

  • To create a more stable and permanent mechanism for bailing out Eurozone countries that get into financial difficulties;
  • To introduce a system where there is centralised oversight over national budgets, and strict controls and penalties for Eurozone countries who break the rules;
  • To introduce a raft of further financial services regulations, as the EU leaders deem that it is primarily the financial services industry which is responsible for the mess they're in;
  • To lay the foundations for an EU-wide financial transactions tax to be levied directly from Brussels, effectively bypassing national governments.
In other words, although some news sources describe it solely as a deal to resolve the Eurozone crisis, it really isn't. The proposed treaty is an attempt to deepen the fiscal integration of the EU, using the crisis as a figleaf.

Now, don't get me wrong, if this fiscal union were to go ahead, with the European Commission effectively becoming a quasi-federal government and the nation states reduced to the status of glorified local councils, much like the system in the US, this would go some way to restoring market confidence. But that is just a happy side-effect. It doesn't, and has never been intended, to solve the root of the problem - it is simply another step on the road to a United States of Europe.

Fortunately, we have decided to take a step back from this - to allow the fiscal integration and consolidation to go ahead, if that is what the rest of the EU wants, but not us. We stand apart.

Good.

This does pose a few problems, though. A treaty between the 26 other members in the wake of our veto would effectively create a 'two-tier' EU, with only us on the lower level. However, the 26 members still need our permission to use the established EU institutions - the European Commission, the European Central Bank, the European Court of Justice, etc. Otherwise, they face the prospect of having to set up entirely new institutions, which will take a long time.

Assuming a treaty between the 26 goes ahead, and we allow them to use the established EU institutions, the new forum for further deepening of EU relationships will be the inner core - effectively excluding us. Over time, we will become increasingly isolated - not involved in policy discussions, but due to the 'qualified majority voting' clause of the Treaty of Lisbon, compelled to obey. EU membership will become increasingly bad for us.

But of course, cutting off all ties with Europe would be ridiculous. 40% of our exports go there, and we are tied into the affairs of the continent. So, Dave, here's your next announcement:

In the wake of our veto of the most recent EU treaty proposal, is has become obvious that Britain's national interest is no longer served by deepening our involvement in the EU. The other nations have concluded that it is in their interest to continue that process, and we will make no attempt to stand in their way - that is for them to decide.


The group of 26 will need to use the institutions of the EU in order to enforce any new Treaty between them. We will not oppose any moves to that end. However, it is likely that a new Europe will emerge as a result of this Treaty - one fundamentally different from the current structure, and which, in all honesty, it would neither be convenient nor appropriate for Britain to be a member of.


We want to continue doing business with Europe. It is profitable for us, and it is profitable for them. But it is no longer in our interest to be part of the continued New Europe project, and therefore, rather than continue to stick spokes in the wheels, I think it would be in everyone's interest for us to go our seperate ways amicably. 

That is why I am now announcing my intention to engage in direct, bilateral negotiations with the European leaders and the European Commission to create a new Treaty - not between Britain and the other nations of Europe to constitute our membership into this emergent New Europe, but one between Britain and New Europe, as friends and neighbours.

Our aim is, as a result of that Treaty, to see Britain leave the EU, to allow the institutions of the EU to serve its remaining members in the best way possible, but to preserve the aspect of the EU that are beneficial to both us and Europe - the single market. What I propose is, effectively, a free trade agreement between Britain and New Europe, which will continue to benefit us both, but without our involvement in the political and constitutional settlements of the EU.

Many people may be critical of this approach, but it is not a unique one. Both Switzerland and Norway enjoy strong bilateral relations with the EU without being a part of it.

The time has come for Britain to stand apart, but not alone.

Which is a polite way of saying: