General News Discussion

[abdoujaparov]

It's marketing, designed to present a tax idea as something it isn't, nothing more. Be suckered by marketing if you like.

But anyway, what I am proposing is not (your use of) regressive at all - you can only be seeing it as such because you are not joining up all parts of what I've said into a coherent whole against other parts of the tax system.

(I'll come back on the other bits of your post in mo).

[fred quimby]

you can only be seeing it as such because you are not joining up all parts of what I've said into a coherent whole against other parts of the tax system.

[eFestivals]

No - corporation tax is not a cost of doing business. It's a tax on capital. My corp tax bill can increase even if my trading activity declines - if I increase my margins. A turnover tax is a tax on doing business - the more business I do, the more tax I pay.

and yet if you increase your margins beyond what the market can stand you make nothing at all and pay no corp tax - so it does not work how you've chosen to present it.

What I am suggesting is not something which works in isolation from the rest of society. You analysing it as tho it does only puts you wrong.

best you break the news to HMRC then that they've got the whole basis for VAT registration wrong

PMSL - you know the reason for it do you, or are you making it up from wrong assumptions?

They *require* people to register when turnover hits a certain point. That requirement is stated without a reason for why they have that requirement, but you seem to know it despite it not being said.

My own take on it is that (aside from the tax collected, of course) it's merely about the govt having a handle on what economic activity is happening via it having to be reported, and not about just taxing *just* turnover as you've tried to suggest. After all, if they wanted to tax turnover they'd be taxing turnover, wouldn't they?

They don't tax turnover, they tax what is gained by sales. It's a 100% different thing. The reasons you think for why they require registration at a certain point is your assumption only.

No, companies do not have to directly price in corporation tax

do behave - care to show me a single company in existence that doesn't price in a profit?

They price in a profit, and that profit gets taxed as corp tax.

A turnover tax would be deliberately lesser on average than the corp tax impact, to ensure that there was no financial impact whatsoever onto 'good' companies.

If the 'bad' companies have to put their prices up then the taxpayer wins, the 'good' businesses win, workers win, and at worst the customer losses nothing (cos he'll swap to a 'good' business at the previous price). The only loser is the 'bad' business - and I ain't gonna cry about that (and nor should you).

- that's the whole point with Starbucks etc.

no the whole point with what Starbucks have been doing is that they've priced in that profit but then pretended that it's not profit!!!!!!!

You couldn't be more wrong using them as your example - the fact that they're suddenly going to pay corp tax proves that they have that profit (even tho hidden from the taxman under another name).

They can keep their prices at what they would consider a competitive level and manage their tax liability in other ways. With a turnover tax, they'd haveno choice but to pass that cost through to customers because it's a direct cost to them of doing business

That sounds like you're approving of people who "manage their tax liability"??

The very point of a turnover tax - and why you are not getting it - is to try, as much as possible, to stop people being able to "manage their tax liability" - because that's the whole fucking problem in the first place!!!!!

What "manage their tax liability" means is to steal money which would otherwise be tax money.

but I would have to price the turnover tax in and pass it directly to customers in a way that I dont have to with corporation tax - because the tax increases the more business I do (whether it is profitable or not). The only way I can mitigate the risk is to pass the cost through to customers. Corporation tax does not work that way.

the taxpayer should not subsidise your unprofitable business. The end.

Is it really stupid to say that companies should not be able to avoid taxes and that the govt should not subsidise unprofitable businesses?

It's certainly stupid to say that the govt should have a tax regime which can be easily manipulated to avoid tax, and that the govt should subsidise* unprofitable businesses - both of which exist, and both of which you're saying shouldn't change by your rejection of an idea which would stop those things (what were those words you threw at me when we talked about Obama recently..? )

(* in a world where capitalism is supposedly the number one rule, anyway)

I agree, corporation tax does not work effectively. But a turnover tax just passes the tax liability through to the customer and hits poorer people disproportionately hard

not if if structured how I'm saying rather than how you've decided to misinterpret what I'm saying.

You're only seeing the "it'll cost me" bit and then you've stopped thinking further about it all.

As I keep saying, that "it'll cost me" bit does not actually cost you anything at all. That is the full economic truth of what I am proposing.

but dont you see - that "extra" money is just coming out of the pockets of customers

no it's not - it's taken with one hand and returned with another.

[abdoujaparov]

I am afraid that I cannot see any way in which a turnover tax doesnt just pass the burden of taxation through to the customer. You say that the tax would be offset against corporation tax, but it cannot work that way, because businesses will hedge their risk by pricing for the turnover tax. And in cases where a business doesnt make a profit, for whatever reason (even if it's a temporary blip) all you've done is make the consumer carry the tax burden...and that tax burden is carried disproportionately heavily by those least able to pay.

I understand what you are trying to do, I really do. But the answer, for me, is to tax capital (ie profit) because that is the surplus businesses are making from the money we spend on them....

[abdoujaparov]

That sounds like you're approving of people who "manage their tax liability"??

[eFestivals]

It isnt marketing - as I say it is a commonly accepted term to describe a tax system which imposes a greater taxation burden on those with lower incomes.

yes, it's a commonly accepted term by people who fall for marketing - which is most of us most of the time.

It's still meaningless in all real life use. It gets mis-applied against the definition all the time and everyone accepts it - because they only look at what is being done by one hand, and not what is happening with the other.

Income tax is (broadly) progressive. If you get paid over the higher rate threshold, you pay more tax as a proportion of your income.

VAT is regressive. The higher the proportion of your income you spend on VATable goods and services, the higher the proportion of your income goes in VAT.

It's a simple, descriptive, term. Not subjective, not marketing, not meaningless, not used to dress something up as it isnt.

so you give an income tax cut to the poorest - progressive.

You pay for it with a VAT rise - regressive.

They're part of the same tax regime. Has that tax regime just been progressive or regressive?

As I say, it' a bullshit term. It's use to deflect people's attention for the whole scenario.

And if you're proposal isnt regressive and I'm not seeing how it all fits together, then fine.

it is not a tax raising measure, it is a tax balancing measure.

It is a tax designed to stop the rich running off with all the money tax-free - which is what happens right now.

That gets to mean that, ultimately, when each effect is balanced against every other effect, the rich are paying a greater amount in taxes and so the poor need to be taxed less.

But so far, I cant see how it can fit together in a way that avoids businesses pricing for the turnover tax (because profits are uncertain and they cannot therefore rely on your theoretical corporation tax offset) and this pricing passes the burden of the tax onto customers and therefore makes it regressive.

On average profits are *not* uncertain, they are guaranteed.

A turnover tax (that was offset against corp tax) that was set to bring in less than the corp tax would against those average profits would be no added cost to the economy.

There would be some businesses affected, yes - but it would be a re-adjustment to who got the business and so no output is lost and no jobs are lost.

The tax thieves are the only ones who suffer, because they can no longer thieve.

[Guest]

http://www.bbc.co.uk/news/education-20642796

a couple of million to get the military to set up little boot camp style help in schools

Gove.... how bad is he going to get?

[eFestivals]

Or you have explained your idea badly.

hey, I'm trying, but some people are too fixated on one part to hear the other parts; those other parts are there to be heard, I assure you.

[eFestivals]

the answer, for me, is to tax capital (ie profit) because that is the surplus businesses are making from the money we spend on them....

reality proves it is not the answer, no matter how much you might wish it to be. I wish for that too, no less than you - but then reality kicks in.

Ultimately, because it is a tax balancing measure and not a tax raising measure - and so TRULY progressive - the only losers are the tax thieves and not the general public. It is still the surplus that is taxed, but actually taxed and not failed to be taxed as happens now.

[abdoujaparov]

yes, it's a commonly accepted term by people who fall for marketing - which is most of us most of the time.

It's still meaningless in all real life use. It gets mis-applied against the definition all the time and everyone accepts it - because they only look at what is being done by one hand, and not what is happening with the other.

[eFestivals]

No, I'm just describing what firms do

and which is impossible to stop without a turnover tax, and will only spread more widely in society as we get more 'global' - which will cause ever-more tax burden to fall onto the poor, which is as regressive as it's possible to get.

[abdoujaparov]

Ultimately, because it is a tax balancing measure and not a tax raising measure - and so TRULY progressive - the only losers are the tax thieves and not the general public. It is still the surplus that is taxed, but actually taxed and not failed to be taxed as happens now.

[eFestivals]

ok - I give up...

it's a simple descriptive term which describes the impact a tax system has in relation to the income of the taxed. It's as simple as that really.

it's a slight of hand - "look at that nice progressive measure (I'm not mentioning its regressive counter-measure)".

Because that is what you get in ANY tax-raising-neutral change in measures.

but I cannot see how it will rebalance anything - as I say, it will just pass the burden of taxation through to the consumer

join it up...

*If* (and it is only 'if') that tax burden was put onto customers, where does that tax money end up, and what money has it replaced?

From what you've shown to-date, that ^^ dot-to-dot puzzle will take a while, but it's really not so hard.

Meanwhile, aside of all of that, the companies that today make a profit but manage to pay no corp tax (eg: Starbucks) are now paying something via a turnover tax which they were not before. That's a gain to the treasury, and extra money to be given back to taxpayers thru lower taxes elsewhere - the average taxpayer is better off, at the expense of the tax cheats.

Really? Please do tell me your business secret...I look forward to my guaranteed profit

the business 'secret' is central banks printing money. The proof of guaranteed profit is a working capitalist system.

I think what passed you by was the word "average". Just a thought.

No, because they will have passed the cost onto you and me

nope - they are no longer cheats, but if the cost has been passed so will have the tax revenue raised.

Unless you're thinking that somewhere I've forgot to mention that the tax collected will be stored down the back of my sofa?

[eFestivals]

It incentivises business to maximise their margins

so no change then.

and reduce their turnover to the bare minimum possible to generate the profit the shareholders wants.

the most profit can come from the highest turnover just as much as it can from the lowest turnover. So no change there either.

It incentivises them to price in the cost of the turnover tax, because that's how they would mitigate their risks.

Perhaps; it doesn't apply by default. Some people are better at maths than others.

But even if it happens in every single case, the money doesn't disappear into thin air, does it? 1% extra is taken from the customer is given to the treasury is given back to customer in tax cuts elsewhere - it's completely neutral to all tax that is paid today.

The place where it is not neutral is where people are not paying corp tax but should be - they can no longer avoid paying it.

[Kowalski]

Ooft, the receptionist that took the hoax call about Kate has apparently topped herself!!! Crikey.

Edited December 7, 2012 by Kowalski

[eFestivals]

http://www.bbc.co.uk...cation-20642796

a couple of million to get the military to set up little boot camp style help in schools

Gove.... how bad is he going to get?

He's not going to get as bad as he thinks he is, that much I know, and for that I'm thankful.

After all, that nasty slimy c**t is not going to become prime minister of this country as he believes he will.

There is just the smallest modicum of sense left in the electorate, I'm pleased to say.

Shoot me if I'm wrong. Please, shoot me.

[eFestivals]

Ooft, the receptionist that took the hoax call about Kate has apparently topped herself!!! Crikey.

it was rather shameful to be fooled by such a poor effort but that's taking things too far.

[abdoujaparov]

But even if it happens in every single case, the money doesn't disappear into thin air, does it? 1% extra is taken from the customer is given to the treasury is given back to customer in tax cuts elsewhere - it's completely neutral to all tax that is paid today.

[eFestivals]

What's the point then?

so we're no longer robbed by the likes of Starbucks, that your principled system can do nothing to stop but my (less principled, if you like) system can.

It ultimately has no bad effects except onto the tax cheats.

It has many good effects, for govt, and for individuals, and the economy as a whole. We get a more efficient and fairer market via a more level playing field. Many no-added-value speculators are out of the game; many bad businesses are out of the game.

We are not in a debt crisis, we are not in an economic crisis, we're in a tax crisis - because we've allowed ourselves to be robbed for many years, and now the consequences of that have come back on us. Because of the changed global situation it is not a situation that can ever be reversed.

It's either pay extra taxes yourself directly - you don't avoid the issue by doing nothing - or find some creative way to stamp on the c**ts, such as I've suggested.

Edited December 7, 2012 by eFestivals

[fred quimby]

So for every pound extra I spend (as goods and services increase) I get a pound back so to speak (not worth looking at percentage with my dull Mind) Correct.

You then hope that that is spent on areas that then benefit me (I say me but could be anyone) through Government tax implementation.

I get that.

Would you include inward investment as turnover?

[fred quimby]

It's either pay extra taxes yourself directly - you don't avoid the issue by doing nothing - or find some creative way to stamp on the c**ts, such as I've suggested.

[abdoujaparov]

I think comparing VAT to what Neil is suggesting is wrong.

VAT is a tax that is bolted onto the price of a product and then passed directly onto the consumer (I think 99% of business do pass it on) and also doesn't apply to every product. It can't really be thought of as a cost to the business. Specially, and this is the most important point on why it is different, because it actually works to lower the companies overall tax liability. Its not a cost...

Where as a turnover tax would become an actual cost to the business in my opinion. As it would become a direct tax on every £1 brought into the business. It would be a cost.

Its very different to VAT and its wrong to say they are the same.

Where they do have some similarity though is... As VAT hits the poorest hardiest... A turnover tax would hit the smallest business disproportionaly as their ability to absorb it would be lower. That is clear to see.

[abdoujaparov]

so we're no longer robbed by the likes of Starbucks, that your principled system can do nothing to stop but my (less principled, if you like) system can.

[eFestivals]

Would you include inward investment as turnover?

nope - it's not anything which is profit. The idea of a turnover tax would be to get at profit that is being hidden. Investment which comes from outside is not that.

So all Businesses are C88nts then?

nope, just the fiddlers - like Starbucks, who are clearly making a profit, no matter what their fantasy accounts are telling HMRC.

[eFestivals]

except all it does is invite Starbucks to pass on the tax burden to their customers...

Not all, no. As i've already proven, that burden is not a burden, but that aside....

IT MAKES THEM PAY TAX!!!!!

Which in more than your principles will ever make them do.