Re: How do cutbacks save economies? : Wed Oct 17, 2012 2:19 am  

Ajw71 wrote:

What dogma is this you keep talking about?

Let's look at what i said:

1. Labour built up a deficit in boom years - FACT - There was no recession from 02-07 but no surplus.
2. Labour didn't fix the roof when the sun was shining - FACT - They did not operate a surplus during 02-07 when there was no recession.
3. Brown claimed to have ended boom and bust - FACT - He stated this in the Commons.
4. Labour's own minster said there was no money left - FACT - A note was left to this effect.

What are you trying to argue, that I am lying and these are not facts? Please explain?

A long established truism of the internet is that typing 'FACT' at the end of a statement doesn't make it any truer than if you hadn't.

Let's look at your statements in order:

1) Yes they did. Quite correct. Now show us any time where any party was in power where this hasn't happened. You can't - it's how governments work. I'm not saying that's a correct way of working, just how it is.
2) Didn't they? So education and health - two large factors in the future financial health of a country - weren't improved while Labour were in power? Really? You may not see this as 'fixing the roof' (as your overworked cliche has it), but it is a major contribution to ensuring the future wellbeing of a nation. There is more to 'fixing the roof' than cutting back the defecit, no matter what your Lords and Masters may be telling you.
3) Brown claimed to have ended the Tory 'boom and bust' policies, i.e. the Labour party wouldn't be following them. I'm sure even someone of your limited political knowledge will appreciate that he can do nothing about Conservative policy when they come into power.
4) Yes, a Labour minister apparently did leave a note saying there was no money left. Are you suggesting that this was down to anything other than propping up banks that had failed in 2008? Without that, as shown by Sally Cinnamon, there is a more than good chance that the economy would have continued along the same sort of small deficit that it had historically run for ever.
As a continuation of that, if there was 'no money' left then, then there is 'minus money' left now due to the failing economic principles being used by the current government. This, as you would say, is a fact. Go and look it up.


Incidentally, well done on finding the Telegraph link showing what the benefit of hindsight are.

Re: How do cutbacks save economies? : Wed Oct 17, 2012 5:03 am  

What is interesting about this "they didn't mend the roof when the sun is shining" argument is the implication that if the UK had been running a budget surplus going into 2008, we would have been OK. However that is exactly what Ireland and Spain were doing, and they ended up in a much worse mess than us: http://www.imf.org/external/pubs/ft/weo ... P&grp=0&a= Ireland was running surpluses in most years between 1997 and 2007 in fact it was Ireland with its low corporation tax and budget surpluses that George Osborne said (when he was in Opposition) was the economic model the UK should be following. And yet a small surplus in 2008 became a deficit of 30% of GDP in 2010 (that puts ours into perspective). Spain ended up with similar deficit levels to us after the crisis despite running a surplus of around 2% in 2007. And unemployment and output were much worse in Ireland and Spain than the UK.

What is interesting about this "they didn't mend the roof when the sun is shining" argument is the implication that if the UK had been running a budget surplus going into 2008, we would have been OK. However that is exactly what Ireland and Spain were doing, and they ended up in a much worse mess than us: http://www.imf.org/external/pubs/ft/weo ... P&grp=0&a= Ireland was running surpluses in most years between 1997 and 2007 in fact it was Ireland with its low corporation tax and budget surpluses that George Osborne said (when he was in Opposition) was the economic model the UK should be following. And yet a small surplus in 2008 became a deficit of 30% of GDP in 2010 (that puts ours into perspective). Spain ended up with similar deficit levels to us after the crisis despite running a surplus of around 2% in 2007. And unemployment and output were much worse in Ireland and Spain than the UK.

Re: How do cutbacks save economies? : Wed Oct 17, 2012 5:17 am  

Richie wrote:

Following what John Whiting says, perhaps the answer is to cancel Corporation tax completely, and make up on things that are less easily avoided - PAYE, National Insurance, business rates, VAT etc.

A far better way would be the introduction of Land Value Taxation. Try offshoring a plot of land

Re: How do cutbacks save economies? : Wed Oct 17, 2012 5:52 am  

sally cinnamon wrote: What is interesting about this "they didn't mend the roof when the sun is shining" argument is the implication that if the UK had been running a budget surplus going into 2008, we would have been OK. However that is exactly what Ireland and Spain were doing, and they ended up in a much worse mess than us: http://www.imf.org/external/pubs/ft/weo ... P&grp=0&a= Ireland was running surpluses in most years between 1997 and 2007 in fact it was Ireland with its low corporation tax and budget surpluses that George Osborne said (when he was in Opposition) was the economic model the UK should be following. And yet a small surplus in 2008 became a deficit of 30% of GDP in 2010 (that puts ours into perspective). Spain ended up with similar deficit levels to us after the crisis despite running a surplus of around 2% in 2007. And unemployment and output were much worse in Ireland and Spain than the UK. Now that's fascinating. Why did that happen, Sally?

sally cinnamon wrote: What is interesting about this "they didn't mend the roof when the sun is shining" argument is the implication that if the UK had been running a budget surplus going into 2008, we would have been OK. However that is exactly what Ireland and Spain were doing, and they ended up in a much worse mess than us: http://www.imf.org/external/pubs/ft/weo ... P&grp=0&a= Ireland was running surpluses in most years between 1997 and 2007 in fact it was Ireland with its low corporation tax and budget surpluses that George Osborne said (when he was in Opposition) was the economic model the UK should be following. And yet a small surplus in 2008 became a deficit of 30% of GDP in 2010 (that puts ours into perspective). Spain ended up with similar deficit levels to us after the crisis despite running a surplus of around 2% in 2007. And unemployment and output were much worse in Ireland and Spain than the UK. Now that's fascinating. Why did that happen, Sally?

Re: How do cutbacks save economies? : Wed Oct 17, 2012 8:12 am  

Sal Paradise wrote:

So think everyone's tax dealing should be made public - after all it is our money? So when you your own business you never tried to lower your tax liability?

We're talking about corporation tax, not individuals income tax.

As a small business owner there is very little leeway for you to avoid paying corporation tax if you intend to ever make a profit, an accountant may have a few tweaks, knobs and dials here and there that he can pull and convince you that you are better off even after paying his fees but in reality if you're running a single independant coffee shop in the centre of any town you simply don't have the ability to shuffle profits away to foreign owned subsiduries or to offshore head offices, you could try just taking cash out of the till every day and pretending that it never entered your shop but you'd have an HMRC inspector down on you pretty smartish when your profit margin wasn't matching what they consider to be the norm in your line of business.

Fact of the matter is that one of the main reasons that I stopped being a small business owner after 24 years of trading was the slow realisation that you can't beat the tax system on your own and if you think you can then they are quite prepared to use disproportionate resources to reclaim what they estimate to be a liability and its up to you to prove it isn't - not quite the same way that they deal with large corporations.

[John_D]

Re: How do cutbacks save economies? : Wed Oct 17, 2012 8:23 am  

Just read this thread title as 'How do cufflinks save economies?' Probably more effectively than cutbacks, actually. Just like Adam Smith wrote; On The Division Of Labour In Cufflink Manufacture

Re: How do cutbacks save economies? : Wed Oct 17, 2012 9:17 am  

Sal Paradise wrote: Paragraph 2 isn't quite accurate - in fact it isn't factually correct at all - this company will pay and will have paid millions in employers NI The money will be paid, that much is true, but very clearly before Starbucks (or anyone) sets on an employee they know that the cost of the employee comprises items including their gross salary and including the employer's NIC. Employers' NIC is paid for every employee by every company so the fact Starbucks also has to pay it isn't either earth shattering, or to their credit. It's just how it is. I don't know what point you are making. If it is implying that this somehow gives them a "credit" against corporation tax they do not pay, them I'm sorry, i don't think you have a point at all. Sal Paradise wrote: and acted as a collector of VAT for HMRC free of charge to the tune of about £70m a year. That's just more of the same. Every business which is registered for VAT accounts quarterly for VAT. This "free of charge" thing is just emotive nonsense, Starbucks does not shoulder any unusual burdens in regards to this function, which is plainly just a fact of life if you run a UK business. Sal Paradise wrote: Don't blame these companies blame the tax laws that allow this - and there will be several British companies doing exactly the same in other countries. I don't believe you are that naive. I am sure you know how it works, the accountancy firms, for huge fees, dream up highly complex and tortuous paths to pass money along, and do this all the time. Of course the tax laws do not "allow" this, in the sense that "Parliament specifically thought of this dodge and did not pass a specific law against it because Parliament positively thought that companies should be allowed to escape corporation tax by using this or that scheme". The emphasis is in truth entirely reversed. It is, for obvious reasons, totally impossible to legislate in advance to prevent the operation of every tax dodge which has yet to be dreamed up. Far from considering that Parliament "allows" tax dodges the true nuance of meaning is that many such tax dodges are only legal until measures to close the loopholes are put in place. If you want to play semantics and say that in the meantime the tax dodge is "allowed" then knock yourself out, but nobody is accusing Starbucks of illegality, and to do so is to entirely avoid the point of this part of the discussion. Sal Paradise wrote: Perhaps all those clammering for higher taxes might think again, high taxes will just force those you are trying to catch into ever more devious ways of avoidance. 20% of something is better than 0% of anything I'm not clamouring for high taxes. If I felt a need to clamour at all in this context then it would simply be for Starbucks to pay standard rates of corporation tax based on a fairly assessed figure which represents the true (and very considerable) profitability of their UK operations. Sadly, and based on a number of well-publicised cases such as Vodafone and all the rest, I have no confidence that HMRC or indeed HM Government has either the appetite or the capacity for the task of making sure big multinationals pay their fair share. Like the bankers scandals, ultimately it seems people temporarily in charge of the UK shop are exceedingly reluctant to rock any boats, however many billions disappear down the toilet. A cynic might wonder whether something was in it for them. Official "You Needn't Worry Your Pretty Little Heads, It's All Fine, We're On It, No Really" bullcrap here.

Sal Paradise wrote: Paragraph 2 isn't quite accurate - in fact it isn't factually correct at all - this company will pay and will have paid millions in employers NI The money will be paid, that much is true, but very clearly before Starbucks (or anyone) sets on an employee they know that the cost of the employee comprises items including their gross salary and including the employer's NIC. Employers' NIC is paid for every employee by every company so the fact Starbucks also has to pay it isn't either earth shattering, or to their credit. It's just how it is. I don't know what point you are making. If it is implying that this somehow gives them a "credit" against corporation tax they do not pay, them I'm sorry, i don't think you have a point at all. Sal Paradise wrote: and acted as a collector of VAT for HMRC free of charge to the tune of about £70m a year. That's just more of the same. Every business which is registered for VAT accounts quarterly for VAT. This "free of charge" thing is just emotive nonsense, Starbucks does not shoulder any unusual burdens in regards to this function, which is plainly just a fact of life if you run a UK business. Sal Paradise wrote: Don't blame these companies blame the tax laws that allow this - and there will be several British companies doing exactly the same in other countries. I don't believe you are that naive. I am sure you know how it works, the accountancy firms, for huge fees, dream up highly complex and tortuous paths to pass money along, and do this all the time. Of course the tax laws do not "allow" this, in the sense that "Parliament specifically thought of this dodge and did not pass a specific law against it because Parliament positively thought that companies should be allowed to escape corporation tax by using this or that scheme". The emphasis is in truth entirely reversed. It is, for obvious reasons, totally impossible to legislate in advance to prevent the operation of every tax dodge which has yet to be dreamed up. Far from considering that Parliament "allows" tax dodges the true nuance of meaning is that many such tax dodges are only legal until measures to close the loopholes are put in place. If you want to play semantics and say that in the meantime the tax dodge is "allowed" then knock yourself out, but nobody is accusing Starbucks of illegality, and to do so is to entirely avoid the point of this part of the discussion. Sal Paradise wrote: Perhaps all those clammering for higher taxes might think again, high taxes will just force those you are trying to catch into ever more devious ways of avoidance. 20% of something is better than 0% of anything I'm not clamouring for high taxes. If I felt a need to clamour at all in this context then it would simply be for Starbucks to pay standard rates of corporation tax based on a fairly assessed figure which represents the true (and very considerable) profitability of their UK operations. Sadly, and based on a number of well-publicised cases such as Vodafone and all the rest, I have no confidence that HMRC or indeed HM Government has either the appetite or the capacity for the task of making sure big multinationals pay their fair share. Like the bankers scandals, ultimately it seems people temporarily in charge of the UK shop are exceedingly reluctant to rock any boats, however many billions disappear down the toilet. A cynic might wonder whether something was in it for them. Official "You Needn't Worry Your Pretty Little Heads, It's All Fine, We're On It, No Really" bullcrap here.

Re: How do cutbacks save economies? : Wed Oct 17, 2012 9:23 am  

JerryChicken wrote: We're talking about corporation tax, not individuals income tax. As a small business owner there is very little leeway for you to avoid paying corporation tax if you intend to ever make a profit, an accountant may have a few tweaks, knobs and dials here and there that he can pull and convince you that you are better off even after paying his fees but in reality if you're running a single independant coffee shop in the centre of any town you simply don't have the ability to shuffle profits away to foreign owned subsiduries or to offshore head offices, you could try just taking cash out of the till every day and pretending that it never entered your shop but you'd have an HMRC inspector down on you pretty smartish when your profit margin wasn't matching what they consider to be the norm in your line of business. Fact of the matter is that one of the main reasons that I stopped being a small business owner after 24 years of trading was the slow realisation that you can't beat the tax system on your own and if you think you can then they are quite prepared to use disproportionate resources to reclaim what they estimate to be a liability and its up to you to prove it isn't - not quite the same way that they deal with large corporations. An interesting fact emerged yesterday: The "tax simplification tsar" has a total staff of six. Now compare that to the $millions spent by multi nationals on paying tax lawyers and accountants and you soon see how serious this government is in reining in these companies. Add to that the paltry budget alloted to HMRC's lawyers to prosecute recalcitrant companies (usually spent in 1st 3 months) and you get an even clearer picture. Now compare that to the "war on benefit cheats" and the picture becomes even clearer as regards just who this government are really targeting

JerryChicken wrote: We're talking about corporation tax, not individuals income tax. As a small business owner there is very little leeway for you to avoid paying corporation tax if you intend to ever make a profit, an accountant may have a few tweaks, knobs and dials here and there that he can pull and convince you that you are better off even after paying his fees but in reality if you're running a single independant coffee shop in the centre of any town you simply don't have the ability to shuffle profits away to foreign owned subsiduries or to offshore head offices, you could try just taking cash out of the till every day and pretending that it never entered your shop but you'd have an HMRC inspector down on you pretty smartish when your profit margin wasn't matching what they consider to be the norm in your line of business. Fact of the matter is that one of the main reasons that I stopped being a small business owner after 24 years of trading was the slow realisation that you can't beat the tax system on your own and if you think you can then they are quite prepared to use disproportionate resources to reclaim what they estimate to be a liability and its up to you to prove it isn't - not quite the same way that they deal with large corporations. An interesting fact emerged yesterday: The "tax simplification tsar" has a total staff of six. Now compare that to the $millions spent by multi nationals on paying tax lawyers and accountants and you soon see how serious this government is in reining in these companies. Add to that the paltry budget alloted to HMRC's lawyers to prosecute recalcitrant companies (usually spent in 1st 3 months) and you get an even clearer picture. Now compare that to the "war on benefit cheats" and the picture becomes even clearer as regards just who this government are really targeting

Re: How do cutbacks save economies? : Wed Oct 17, 2012 11:51 am  

Mintball wrote:

Still no actual suggestions of your own, eh?

Why I am not surprised about that? It would, after all, require a working brain.

my suggestion? do bugger all. these things right themselves eventually.

i've listened to many so called experts spout on about what we should or shouldn't do, and so far none of them have been proved 100% right. and i'm sure some of these buggers have a 'working brain', hell, i reckon some even have fancy letters after their names.

i suppose my suggestion is infinitely better than yours though, as it is just that, my suggestion, as opposed to yours which involves standing from the sidelines and spouting some other buggers half baked ideas about magical jobs from the sky!

a mass army of home insulators eh? utterly, utterly laughable. up there with paying people not to rob us.

Re: How do cutbacks save economies? : Wed Oct 17, 2012 2:16 pm  

In the meantime, what words of wisdom and consolation will you offer to people losing their jobs, people finding it impossible to get a job (particularly young people), disabled people finding their benefits ripped away by a bunch of non-medical people making a profit from it – some even killing themselves in despair.

What will you say to them, eh? "do bugger all. these things right themselves eventually"?

1) I didn't suggest we "people not to rob us".

2) And the suggestion of insulation was not mine. As I have explained. I used it here, as it was used by the originator, at the time, as simply an example of what could be possible. This has been pointed out to you. I'm sorry if you found it too difficult to understand.