Sunday, 2 June 2013

Weekly Poll Lowdown

So if you were the civil servants and ministers in HMRC right now it seems you would be pressing for greater tax burdens on Google and other companies that have been avoiding tax. However, there was no clear outcome on how much should be paid, those who thought a lot more should be paid were equal to those who say they should not be forced to extra pay tax. So there is just over a 50:50 split on the issue. Here are the full results. 

Should Google pay more tax on the basis of the current law?

Yes, it should pay a lot more 
Yes, it should pay a little bit more 

Just over 50% of you are a bit mad in my opinion. The law in this country allows companies to use loopholes in exactly the same way in which a large amount of people do for their own personal income. Yet there is seemingly some sort of moral crusade to make sure that Google pays what is actually extra taxation. Just because big business is big there seems to be an idea that it should be pushed below the law and receive extra charges which it should not incur. Coincidently, the same people who are pushing for companies to pay more tax are those that believe, wrongly, that business caused the recession when it was actually the government (I'm not talking about the boom bust cycle in general just how this recession has been worse and that too much government caused it).

Many people are seemingly going on a moral crusade to over ride the law. 

There is also an interesting legal debate on this too. The country is governed by the rule of the law and not the rule of the mob and its pressure, that's why at the moment Abu Qatda can't be deported. People wish to use their moral pressure, which they actually have no right to do, to force others into what they think is right. This is seemingly ok for issues where there is a consensus but people will push for more radical and ludicrous things. We may get into a position where just because a small proportion of the electorate believes something is right the Government can intimidate business into doing what it wants. People are taking power away from business, which ultimately has to serve its customers, and handing it over to politicians. Not a great move.

Ignoring legal absurdities though, why would you want business to pay the extra tax? This 0.3% of growth we have at the moment is probably all down to extra money left over after taxes that is put back into to the economy. Investors do like big profits, but they like making big profits bigger. That means bigger business it means more jobs and a better quality of life for all people. So there is an economic benefit to not force these extra taxes and get some of that growth that everyone wants. If the government got this money it would waste it, like always, and then we'll all be that little bit poorer.

So what would I do if I was in HMRC. Well I'd stop bothering all these companies and actually try reform the tax laws in the UK. There is a competition argument to making the tax law in the country the same for all business and that can easily be done by making it a lot simpler to understand for business people, lawyers, civil servants and MPs, who all struggle at the moment. There will never be no tax avoidance, but it can be reduced. Codification and rewriting will both help. We should simplify the law and not have a moral lynch mob. 

Codification of tax laws is much needed. It has got to the point where no one actually knows the law.

Please vote in the next poll on the sidebar. 

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