Wednesday, 31 October 2012

Why Tax Avoidance Isn't Causing the Deficit

Not the solution to your problems.
There's been a bit of rumbling recently about tax avoidance, most notably Starbucks, eBay and Amazon, which don't seem to pay a huge amount of tax in the UK. Some bright sparks on Twitter have come up with the notion that this tax avoidance is basically responsible for the deficit, and that all that we have to do is to get our hands on this money.

I have a few points to make.

Firstly, the old difference between tax evasion and tax avoidance. Tax evasion is deliberately not paying tax which is already due. Tax avoidance is simply arranging your financial affairs, or the affairs of your company, to minimise a tax liability. Tax evasion is illegal, tax avoidance is not. I would encourage everyone to engage in tax avoidance.

If it's true, and the fact that these horrible companies are simply not paying tax which they should be paying (even though they're not because tax avoidance is perfectly legal), then this would be reflected in historical revenue figures, would it not? I mean, the deficit didn't exist at one point, so there must have been a point where tax avoidance was lower in order for us to have been running a surplus in the past?

Enter this article, from the Guardian, no less, which gives us the historical UK tax revenues as a percentage of GDP going back to 1964-65. It quite clearly shows that total tax revenue, as a percentage of GDP, fluctuates between about 31% and 39%.

That's it, folks. In black and white. In official figures printed by a left-wing newspaper. Doesn't matter who's in power, doesn't matter how much they fiddle with the tax system, the most you're going to get in good years and bad, is between 31% and 39% of GDP. That takes into account years when we've been running deficits and surpluses.

Government spending as a proportion of GDP is around about the 47% mark at the moment, yet our average tax take is about 36%. Oh, that would be an 11% structural deficit, then. Not caused by not raising enough money. Caused by spending too much.

Cut, cut, cut, cut, cut.

Wednesday, 10 October 2012

Muse - The 2nd Law Review

For a change, I'm writing about something other than politics. It has been known to happen.

I am writing about Muse - the rock band - for a change.

I like Muse. I think they're pretty much the best 'new' act going these days. And by 'new', I mean not an old school band like Queen, Led Zeppelin, Journey et al. Compared to them, Muse are new. I do not class what generally passes as music these days as proper music. Thudding, droning, repetitive nonsense churned out by transient boy bands in tight shirts or 21-year-old Ibiza girls wearing only their underwear does not qualify as music.

So, Muse are a good band. They have talent. Teh winz.

As such, I was very much looking forward to the release of their new album, 'The 2nd Law'. I like albums, and Muse are definitely an album band. Especially in light of some of their previous work, such as 'Black Holes and Revelations', and 'Origin of Symmetry', the later being, in my humble opinion, one of the greatest rock albums of all time.

So, what can I say about 'The 2nd Law'? Only this:


MEH.


'Twas decidedly average. The songs were very forgettable - there was nothing anthemic that really stuck in your head. No 'New Born' or 'Plug In Baby' moments on this album. Nothing like 'Starlight' or 'United States of Eurasia'. Hell, I've have even taken a painfully poignant 'Unintended' as a consolation, but nothing.

Probably their worst album to date. Not that it's particularly bad - it's all right, but it pales in comparison to their earlier work. Their albums (excluding live albums), in order of greatness, are:
  1. 'Origin of Symmetry' - Their best album. There's simply not a bad track on it, and it should probably be a crime to skip any of them. 'New Born' is probably the best rock track ever written, 'Plug In Baby' a close second, and their cover of 'Feeling Good' is just immense.
  2. 'Black Holes and Revelations' - a close second to 'Origin', the highlights of the album are the energetic 'Starlight' and the gloriously silly 'Knights of Cydonia'. Epic stuff, with echoes of Queen and Led Zeppelin.
  3. 'The Resistance' - A pretty good all-rounder, the best track is the painfully naive and optimistic 'United States of Eurasia'. If only life were that simple, you can't help but wonder. Although the Doctor-Who-esque opening track 'Uprising' is pretty funky!
  4. 'Showbiz' - Muse's first album was a pretty solid outing in many respects, showing that they were capable of something much more. The highlight is definitely the poignant and beautiful 'Unintended', although the opening track 'Sunburn' features an addictive piano solo.
  5. 'Absolution' - heavy and orchestral, Muse's third album does have a certain appeal, but it seems to me to fall short of the mark it aimed at. By far and away the best track is 'Butterflies and Hurricanes', but unfortunately, none of the others seemed to come close to that grandeur.
  6. 'The 2nd Law' - see above. Meh. Decidedly average and forgettable.

Wednesday, 3 October 2012

Miliband is Lying Again

'What do they choose as their priority? A tax cut for millionaires. A tax cut for millionaires. Next April, David Cameron will be writing a cheque for £40,000 to each and every millionaire in Britain. Not just for one year. But each and every year. That is more than the average person earns in a whole year.'
Ed Miliband, Labour Party Conference 2012

You see, pal, this is where you are completely and utterly wrong.

First off, jackass, there is a difference between someone who earns enough to pay the so-called Additional Tax Rate and a millionaire. A millionaire is someone who has £1,000,000 in the bank. Someone who pays the Additional Tax Rate has to be earning £150,000 a year. That doesn't necessarily make them a millionaire.

Next, you ignoramus, Cameron isn't going to be writing a cheque to everyone who benefits from the tax cut. He's simply going to stop taking it off them in the first place. You know, because it's their money, and they've earned it. Cameron is merely reducing the rate at which the State robs those people.

Which, again, says something about your attitude towards money, doesn't it? You're implying that the money doesn't, in fact, belong to those people, but it belongs to the State. Really. Well, given that the money was paid to them in exchange for their labour, does that mean that their labour belongs to the State?

Let me establish something quite clear. My money is mine. I exchanged it for my labour, which is also mine. The Government, through the threat of violence, takes some of this money off me. If it were anyone else doing it, it would be classed as extortion with menaces. The Government calls it tax. But that doesn't change the fact that it's my money, not yours.

And socialists wonder why people like me get so upset over State spending? Because it's my money! You put your fucking hands in my pocket and take my money, and then you spend it on shit you think I need. FUCK YOU.

Finally, you insufferable cretin, where'd you get that £40,000 figure from? Oh - here. You see? Even the fucking Guardian thinks your claim is made of something brown and sticky. It applies only to people who are earning £1,000,000 or more. How many fucking people earn £1,000,000 in a year?! A damn sight less than however many have £1,000,000 in the bank. You fucking arse.

And, FYI, just what do you think those few people are going to do with the extra money? Hmmm? Hoard it in the bank? Unlikely - they've most likely got enough in savings. No, jackass - they're probably going to spend it. How evil of them. Fancy rich people increasing the demand for goods and services, creating job opportunities, contributing to increased money velocity and paying VAT... oh, wait.

It's the bloody Laffer Curve in action. Again. Sure, the revenue from Income Tax might drop a bit - although I suspect it will actually rise as people don't go out of their way to avoid such a punitive rate. But it's highly likely that revenue from other taxes, particularly consumption taxes, will go up, and probably by more than the amount the Exchequer has given in the tax cut.

Cut the rate = revenues rise. It's pretty simple economics, really.

You lying smeggy felch-bucket.