Life and Taxes
Here is George Monbiot, on possibly the most scandalous domestic story of the year (which, in the age of the ConDems, is really saying something). Please read this. In a sane country, this issue would trigger an Egypt-style revolt. It’s essentially a government conspiracy to help massive corporations and banks (you remember how helpful they’ve been to the world in recent years?) defraud the country of perhaps unprecedentedly vast amounts of money. It may even amount to the effective abolition of taxation upon the wealthiest organisations in society.
Here’s a sample:
At the moment tax law ensures that companies based here, with branches in other countries, don’t get taxed twice on the same money. They have to pay only the difference between our rate and that of the other country. If, for example, Dirty Oil plc pays 10% corporation tax on its profits in Oblivia, then shifts the money over here, it should pay a further 18% in the UK, to match our rate of 28%. But under the new proposals, companies will pay nothing at all in this country on money made by their foreign branches.
Foreign means anywhere. If these proposals go ahead, the UK will be only the second country in the world to allow money that has passed through tax havens to remain untaxed when it gets here. The other is Switzerland. The exemption applies solely to “large and medium companies”: it is not available for smaller firms. The government says it expects “large financial services companies to make the greatest use of the exemption regime”. The main beneficiaries, in other words, will be the banks.
But that’s not the end of it. While big business will be exempt from tax on its foreign branch earnings, it will, amazingly, still be able to claim the expense of funding its foreign branches against tax it pays in the UK. No other country does this. The new measures will, as we already know, accompany a rapid reduction in the official rate of corporation tax: from 28% to 24% by 2014. This, a Treasury minister has boasted, will be the lowest rate “of any major western economy”. By the time this government is done, we’ll be lucky if the banks and corporations pay anything at all.
Now, being an utter nerd, there’s always a little bit of my brain at the back (not as little or as far back as it should be) that is thinking about some film or TV series or book with monsters in it.
I simply cannot help thinking about ‘The Sun Makers’ when I read this. One of the most hilarious myths in Who fan culture is that ‘Sun Makers’ is a right-wing allegory about the horrors of the big state and punitive taxation. This is to misunderstand the story but also, more important, it is to buy into one of the centrepieces of reactionary ideological bullshit pervading our culture: the idea that conservative politics is about the liberty of the individual while socialist politics is about the power of the state.…