Wednesday, June 20, 2012

What does Fair actually mean? All tax is morally wrong

vodafone tax © deloitte

News comments:
Civilised societies should not need to tax anyone.

Tax is a lazy way for non wealth creating people (eurocrats mostly) to spend the wealth created by others. Apparently wealth creators are by nature useless at spending money properly and it needs to be taken away so clever civil servants can load up their pensions and cause unfettered chaos in the Eurozone through intervention.

A few celebrities in the UK are being hammered for not paying their "fair share" of the UK debt burden through tax. What is fair? I mean if you have to pay 50% tax and you found a way to pay only 45% because of an allowance you were not aware of, would you pay 50%? Would it be fair not to pay the 5% difference?

If you found a way to set up your business affairs legally and reduce it to 1% then would you pay 50%? Only an idiot would, surely?

Tax liability is determined by laws. If laws are badly drafted then why should someone be penalised for the incompetence of some politicos?

All these schemes being exposed by the media have been around for years. Investment Banks are legalised tax minimisation schemes and so are most large conglomerates. An old structuring mate of mine always told me you need 3 entities in 3 countries all with agreements between each other in jurisdictions that never talk to each other. Why? So the tax authorities can never get to the wealth because they don't know who it belongs too. This structure is as old as the hills of course and is the basis of most tax mitigation and reduction schemes. But not always.

Hedge Funds to Hotels are all at it. Paying less tax. It is quite easy to do. The internet is full of ideas and you don't need to be smart to work them out. There are many LLPs and LPs paying out drawings as loans to equity partners that will never be repaid and never taxed. There are companies using Intellectual Property and Patents to keep tax down (Google to Vodafone). There are others putting in huge loss provisions or selling unrealised losses and buying them back to ....

If the law is an ass, change it.

And on another note why don't Financial Accounts have a simple note to the account that says:

Profit before tax
Tax (broken down between the countries that received the tax - amount and when paid)
Profit after tax

...then UK Uncut could get their facts right.

Today's shorts:
Jimmy Carr is a moron (telegraph)

...Prime Minister David Cameron said the tax arrangement of comedian Jimmy Carr was "morally wrong" using a scheme which allows him to pay as little as one per cent tax on their income...

Today's longs:
Greece solves all its problems (reuters)

Euro people to pay 100% and be given pocket money (USSR style).


Anonymous said...

Countries should make themselves into private clubs which require the payment of a members fee in order to be a member of them.