UK Politics Thread

[Montmorency]

Oh it claims to be a balanced budget. Doesn't Labour always? By growing our way out of debt. Which requires debt now and then guaranteeing growth later on. And of course getting all the rich individuals to pay is part of it.

Tax avoidance requires something more than the UK doing something since profit is moved abroad by accounting magic so there is nothing to tax in the UK since all the product was bought at cost. I'm no accountant, but Lewis Hamilton demonstrates that big ticket items would be bought abroad, owned by companies and loaned to the end-user if the attempt at purchase tax was instigated. Try to get them as they are the company owner? Either have it owned by a Foundation or else have the Directors as cutouts.

Very rich individuals can pretty do the same thing. Linky. Before the final vote is collected and Corbyn wins, all the money will be flitting to places where it is nigh on impossible to get it with shell companies in the middle declaring bankruptcy leaving no paper trail.

First of all, let's step back and note that global loss of revenue to multinational tax evasion is likely much less than $1 trillion a year. This is presumably more than what is lost to individual or miscellaneous avoidance, but let's say that's an equivalent amount. So, let's even say $1.5 trillion lost yearly to all (income tax) avoidance. We should now calculate and compare against total global tax revenues, but let's extrapolate from more accessible data on tax revenue as % of GDP. In 2015, global tax revenue was 15.22% of GDP. In 2016, global GDP (again according to the World Bank) was $75.6 trillion - let's say 15% of $75 trillion then, or $11.25 trillion. So on the highest end, your looking at something over ~10% of all tax revenue lost to avoidance. The real proportion is almost certainly lower, and to the extent avoidance is a part of life I don't suppose we have reason to believe it isn't already maximally exploited.

To simplify matters let's look at the data for the UK in the first source above. The estimated loss for the UK is annually ~$1 billion. This is a little more than 0.1% of annual UK tax revenue. Even a much less conservative estimate would therefore be expected to remain far below 1% of revenue. (I don't know why the UK seems to lose much less as proportion of tax revenue than, say, the US or Japan, but that's another story.)

The conclusion, then, is that profit shifting has its limits already. With policy changes, both unilateral and multilateral, it can be further restricted and at the moment the UK probably has more than enough power to force the issue without losing much further revenue (in the worst case; the best case is of course increasing revenue and setting long-term trends).

The idea that raising taxes and closing loopholes will cause an exodus of enterprise and revenue is therefore unsupported, and in itself lends toward a strong argument for immediately reining in private enterprise across the board.

Next: a country can't hope to succeed by trying to retire outstanding debt within the current framework, since it always eventually requires the sale of the metaphorical "arm and a leg". Debt is not the problem; monetary policy and international finance is. States need to reassert their power in social welfare policy, while they still have some power left - without wielding it to undermine each other for short-term profit. This Prisoners' Dilemma isn't a perfect cage.

That tends not to work for Countries - the Credit Rating collapses, and things get very bad.

Yes, countries like Argentina or Greece are fairly easy to push around, but come on: Britons never never never shall be slaves.

Getting all countries to harmonise their tax codes is the way forward. But making promises might also also work...

Yes, it is necessary.

I'm all for changing the logic of the framework. Better that than Labour drive us to Peonage.

Do you really see Labour's policies as retaining a neoliberal framework, eventually concluding in national paralysis and individual suppression? Or, does Labour lean more into this than other parties do?