Sunday, November 4, 2012

No Tax Please, We're American

starturn @ fintag

News comments:
I have been in a spat with the UK tax authorities regarding some tax owed on my gym membership. Despite it being offered to all my staff, keeping them healthy is a taxable benefit in kind.

It's a few pounds but its annoying. I know the government needs tax but the elephants are staring them in the face and they keep shooting at the mice.

The Sunday Times has exposed Apple's 1.9% overseas tax rate. Apparently over half a billion of UK tax was avoided in 2011 (belfasttelegraph) although the USA got to enjoy its multi billion tax revenues. Following on the heels of Facebook and Starbucks, as well as Google, not paying tax has been a dream for their stock holders. (guardian). But for the countries where revenues are made, apart from employing a few people, these large global entities are enjoying the fruits of capitalism and playing a game that they will always win because they are more powerful than any government.

All comes down to Intellectual Property rights. From IKEA to Vodafone, Ronaldo to Tiger Woods, tax can be avoided through charging for the use of a brand name. Those of us who grew up in the structured product world, the 3 entity triangle is a classic rouse to stop the tax authorities attacking your revenues. Making the boxes and arrows diagrams as complex as possible, with transfer pricing and loan interest and tax neutral expenses using countries like BVI, Singapore, Ireland, Switzerland et al and arbitraging between them has made accountancy and book keeping an interesting profession.

The tax police are helpless and until we start seeing trade wars, this tax joke will continue.

So next time I hear some whingeing student sitting in Starbucks reading a story searched using Google on an iPad and then liked on Facebook complaining about the rich being the scum of the earth I shall smile. Will this new generation boycott these 4 institutions? Of course they won't. Best to attack my gym membership and tax me for keeping healthy.

But I will have the last laugh. I will to live 120, demand benefits like sky subscription and bus passes and health care whilst living in a mortgage free large home (or two or more) while they live on sofas and pay 80% tax.

Today's shorts:
Miserable man tries to placate lycra wearers (jacksonsun)

Today's longs:
Malta is the new Ireland (hedgeweek)

Mitt Romney to win.