So Tim Cook, Apple's CEO thinks that suggestions that Apple avoids tax are “total political crap” and claims that “Apple pays every tax dollar we owe.”
That, to be polite, is the ranting of a man who has lost touch with reality. He ignores all the measures Apple tales to make sure its tax bill is minimised and then says it pays every penny it owes.
That's the defence of Nelson Mandela's guard who might have said he was just obeying orders without ever questioning how and why his prisoner came to be on Robben Island.
It's the defence of a corporation that is so rotten to the core that it does not even realise where the boundaries of morality are any more.
And it's the comment of a man who shows himself unfit to be CEO of a major company.
PS I abandoned Apple when buying my latest phone.
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It is possible that he suffers from “Cognitive dissonance” common to those used to the err… “corporate lifestyle”. If Apple were the only computer supplier available – I’d go back to using a slide rule.
Me too. Happily, as a Linux person, I’m not a hip Old-St Apple fanboi. It is actually rather laughable that these ‘socially aware’ casually dressed hipsters carry these things around. The only sensible way of ‘correcting’ these corporations, Apple, Starbucks, Nestle (this week’s Private Eye), Mondelez (ex Cadbury) will be boycott. That’s applies to ‘pure externality’ products such as Coca-Cola (helps rot teeth, makes you obese and the upside is?) too. I’m ready.
Complying with all relevant tax authorities is ‘paying every tax dollar they owe’.
There are no requirements to structure your business to maximise tax costs.
What you actually mean is that “Apple don’t pay as much tax as I’d like”, which is entirely different.
Respectfully, that is not what I am saying at all
I am saying, as millions do, that the right tax should be paid at the right rate in the right place at the right time where right represents economic substance
Apple is taking action to deny that substance
So the wrong tax is being paid
As I said
The right tax is being paid, but we have the wrong laws. I’m afraid you don’t have the right to determine what is right and wrong and then state it as fact. It’s just your opinion.
In terms of his answer it depends on the question he was asked. If it was “why does Apple avoid tax” and he claims they don’t then I agree his answer is indeed nonsense.
I respect Tim Cook’s right to talk crap
I have an equal right to try to change the law
That is what happens in democracies
I continue to try because I have a track record of achievement
So why don’t you inform the relevant authorities where the wrong tax is being paid in the wrong place at the wrong time?
How do you have access to information to make this claim when the relevant authorities clearly take a different view?
The relevant authorities very obviously agree with me
The whole OECD BEOS process indicates that fact
I made my opinions very clear during that process. Very few authorities who attended debate will not know where I stand. I think you can be quite confident of that
The Uriah Heep’s seem to be waking up at the moment. Perhaps its something to do with it being nearly Christmas?
I suspect that there may well be two different definitions of “relevant authorities” at work here, with one definition not actively willing to recognise or accept that OECD, for example, falls into that category because it does not fit into the narrative of a particular kind of ideologicwl faith based prejudice.
Such views only deserve to be taken with any degree of seriousness when they afford the vast majority of us who do make our contribution to society through paying all of our dues the same rights they are so enthusiastic to uphold for the parasitic entities which our higher, relative to income, contributions end up subsidising.
How about it? When do those of us whose contribution effectively subsidise these entities get to see the same consideration? When can we see you manning the barricades to argue that there are no requirements for the vast majority of taxpayers to structure their lives to ensure they make their fair and equitable contribution of tax rather than sitting there one hand on the keyboard and the other touching the forelock to those gaming the system because they happen to have more power?
Stop prostrating yourselves and grow a backbone.
‘And it’s the comment of a man who shows himself unfit to be CEO of a major company.’
I think you may be wrong.
The truth of the matter may well be that Mr C(r)ook is displaying all the necessary attributes of a modern, successful CEO.
CEO:
Can’t
Empathise
Obviously
Recent report from Chartered Inst. of Personnel & Development (CIPD) says:
“Although executive pay has long been a source of debate, the report reveals how the multiplier between the best and worst paid in organisations has shot up in recent years. Today’s 183x multiplier compares to the multiplier of ‘just’ 47x in 1998. According to the CIPD, more than half (55 per cent) of employees now claim the high level of CEO pay in the UK is not just unfair, but it’s bad for their firm’s reputation.
Charles Cotton, CIPD reward adviser, said: “The growing disparity between pay at the high and lower ends of the pay scale for today’s workforce is leading to a real sense of unfairness which is impacting on employees’ motivation at work. The message from employees to CEOs is clear: ‘the more you take, the less we’ll give’.”
TUC general secretary Frances O’Grady echoed these sentiments, and called for businesses to tackle their corporate governance.
“Soar-away executive pay is bad for business,” she said. “Companies should be looking to reduce the pay gap between top execs and the rest of their workforces as a matter of urgency. This will boost staff productivity and ensure that workers get a fairer share of the rewards.”
Stating the ‘bleedin’ obvious’ you would have thought.
You say “The relevant authorities very obviously agree with me” and then go onto say “The whole OECD BEOS process indicates that fact”, which clearly contradicts your claims, yet you apparently can’t see this!!
If the authorities thought that Apple (or whoever) were not paying the correct amount of tax – ‘every penny they owe’ – then they’d be charged accordingly – they haven’t been.
What is clearly being discussed is changing the rules as to how the correct amount of tax should be calculated – in that scenario then Apple might well be paying a different (higher) amount of tax.
But once again, you are still trying to make false claims about people not paying the right amount of tax when in fact what you mean is that they aren’t paying the amount of tax you think they should.
Perhaps you should concentrate more about what you think should change (and why) rather than misrepresenting how the current rules are obeyed!
They haven’t been charged because the laws need to be changed
Hence BEPS
Which is what I referred to
And where, by and large, tax justice has been winning the arguments
Dealing with arguments and misrepresentations as stupid as yours is challenging
Unless you can up your game expect to be deleted
But that’s exactly the point everyone is trying to put to you, Richard. I have no doubt you have a lot of the tax community on your side – hence the process to which you refer. But until those laws are changed, you cannot berate a company using the legal framework to minimise their taxes. They clearly do not pay as much tax as you’d like, but until the law is changed, you cannot say they should pay more and expect to have any weight. You’ve jumped the gun and criticised a company for not heeding to a more costly tax framework that may, in the future, exist. I am in the top tax bracket – should I start paying 55% right now in income tax as I expect the rate to rise in four years? Would you criticise me for failing to be proactive? That is your argument, and it is ridiculous.
This is a quite absurd argument
Apple is using wholly artificial and quite clearly abusive structures but you say I am not allowed to refer to the fact and therefor make the case for change
Please don’t be absurd
What you are saying is that the law determines morality and one must not suggest changing the law usung moral argument as a result
It is a suggestion that many a dictator or wouyld be very happy with
I also note you are offering comment under a false name
So much for moral argument
With respect, Richard, you misunderstand. When you dislike a situation, blame the law that enables that situation, but don’t direct vitriol towards those using the law. There is a clear morally and politically philosophical case that if one’s actions are in accordance with the state’s laws, those actions are just – at the very least, you shouldn’t be called rotten for abiding by them and going no further than required. If an income millionaire believes he will soon be legally required to pay a 60p top rate, is he rotten for continuing to pay the lower rate for as long as is possible? Of course not, and to argue that is just ridiculous.
I won’t address your point about my username, as it is irrelevant and frankly quite bizarre.
I have very clearly and precisely explained my point
If, as you argue, I must not point out the abuse then I become party to it, as no doubt you would wish
And I will not do that
Your logic us bankrupt
Richard, you again have completely misunderstood the case out against you.
Our argument’s strength comes partly from the fact it passes no value judgement on Apple’s affairs – your confusion is shown by the remarks you make about me somehow wanting you to ratify Apple’s tax structures. I think Apple should pay more tax, but that judgement forms no premise of my argument. It is simply noted that instead of calling Apple rotten, you should call the law rotten. Because by arguing that someone is immoral to act within the law, you necessarily must impose your own system of moral judgement, for which you have no authority. For if Apple were to pay tax in order to suit everyone’s moral demands, they’d pay an impossible concoction of no tax, 100% tax, and all the variants in between. The extension of your argument is that someone is rotten because, though they abide by the law, they do not act in the way that you, Richard Murphy, wish. In short, you argument fails because it goes after the wrong person, but because it necessarily leads to an impossible and morally dubious state of affairs in which people should act not with regards only to law, but with regards to everyone else’s opinions.
Nonsense
This is clearly he demand of the world’s leading nations now informed by widespread moral judgement, not just mine
But you wholly miss the point, or do so deliberately (more likely)
Unless I can point to immoral action how can I say the law does not match moral expectation and so needs to be reformed?
I very much doubt you can answer that point, but such action is the precursor of all change
In the name of Christmas good cheer, I was willing to spend time dissecting such muddy thinking, but there really is a limit to my time even at this time of year.
Re-read my argument and address it properly, should you wish to continue.
I have not noticed you presenting an argument, ever
You didn’t seem to think so earlier when you said:
“If, as you argue, I must not point out the abuse then I become party to it, as no doubt you would wish”.
Unless it’s possible to argue something that isn’t an argument?
Oh dear, Richard. It seems even you realised you messed up this time. Hence why you deleted my reply and will most likely delete this one.
Well, I suppose it’s everyone’s right not to embarrass themselves given a choice. Of course, it’s very amusing though.
I’ve just got bored with your pedantry
You will be deleted again from now on as you were in your previous identity
I bet in business school case studies, it is shown as the most admired business in the world. This is the huge paradox of business education – it is a vast industry, and connives in telling students that business is a force for good, and that its practices are fair and just, when so often, big business does the exact opposite. It exploits the state, its citizens and the environment and perpetuates greed in society.
In line with your festive pun fun: if Timmy was Welsh he’d be known as “Cook the Books.”
Nothing wrong with minimising your tax bill and then paying every penny you owe. If they didn’t then the force of law could be used against them. The fact that nobody has as yet taken action against Apple would tend to indicate that they are complying with tax law. Learned hand may be instructive for you.
Not sure where you are going with Mandela – he had a good relationship with most of his warders, particularly 3 – cheap misuse of the man frankly.
Absolutely nothing requires a company to minimise its tax bill
And almost nowhere could a class action be taken for failing to do so
Show me one that has ever been made, let alone won to persuade me otherwise
And re Mandela: substitute a concentration camp guard if you like. Any regime that has run concentration camps will do
And there is nothing in law that obliges a corporation to maximise its tax bill.
You pay what the law requires you to pay: not a penny more, not a penny less. I have no idea where you are going with the class action – there is equally no obligation in law for a company to pay the least tax possible, just as there is no obligation to pay beyond what is required in law.
Mandela was not held in a concentration camp, he was tried, convicted and sentenced to prison. You are grasping at straws here and also misrepresenting history. As I said, you are abusing the mans legacy. You could do well to learn his dignity.
You reveal your moral bankruptcy: the law under which Mandela was tried was utterly immoral. Apparently you don’t recognise the fact
How sad
And sure there is nothing that requires a company to maximise its tax bill. That would be absurd and I have never argued for it. I simply say it should pay the right amount of tax at the right rate in the right place at the right time where right means that the economic substance of the transaction and the form in which it is declared to authorities coincide
Apple does not do that
“..where right means that the economic substance of the transaction and the form in which it is declared to authorities coincide Apple does not do that.”
Well either you are wrong, or the law doesn’t require the substance to conform with the legal aspects of the transaction.
If you are right, which you aren’t, then the various countries where Apple operates would be at liberty to assess Apple differently to their returns. Fault lies with the country and not the taxpayer.
If you are wrong, which you are, then Apple conforms with the tax laws of the various countries, and your beef is still with these countries and you should work to get them to adopt into their domestic laws your suggestions.
Finally, Mandela pleaded guilty to sabotage. Are you suggesting that those found guilty of terrorism offences in the UK have been tried under immoral laws.
i am well aware I am not good with fools, but it’s Christmas so I will be patient
I have not argued Apple has acted illegally, so there is no point pretending I did
They have acted legally
But unethically
I have explained what it unethical about their conduct and suggested a measure to indicate that fact
And using that criteria I have argued there is a case for change. I have done so intenationally, nd the process of change is underway
But when it is recognised that what is now possible is unethical (and it is) for Tim Cook to say it is political crap that Apple pays the wrong tax is indication, as I argued, of a man remnoved from reality
It may be legal crap, as the law stands now
But it is not political crap
And it is certainly not ethical crap
But you have not even begun to comprehend the argument even though I have patiently explained it
So let me spell it out as you will obviously need me to do so: I do think you a fool
Or a charlatan
Or both
And that is offered in a spirit of Christmas goodwill
It’s the same story from every multinational CEO which with respect is all they really can say unless they want to face the wrath of their shareholders for suggesting they should pay more in tax.
I’m tired of the game being played as I’m sure are most of the general public.
There is currently no institution able to regulate and challenge the global companies, their bankers, accountants and tax advisors. Time for a change of drivers, rather than tinkering with the engine!
Good metaphor
Out of interest, which phone did you switch to ?
Samsung A3
Good phone
But I know there are problems with the company
And Android
I live in a flawed world
Richard,
You claim “Dealing with arguments and misrepresentations as stupid as yours is challenging”
And yet you’re the one claiming criminality and that companies are not paying the right amount of tax – claims which simply don’t stand up to scrutiny.
If you have evidence that Apple are not paying the correct amount of tax under the current rules then please inform the relevant authorities. Believing that they should ‘morally’ be paying a higher amount of tax under a different system is an entirely different point altogether,
I haven’t suggested criminality
I do know what criminality is
I have suggested unethical conduct
They’re not the same thing
It’s you who created the claim of criminality
I said the rules needed to be changed and explained that is happening
Niow stop wasting my time
What is unethical to you may be perfectly ethical to others. Your completely ignore the subjectivity of your analysis, and if a company cannot be safe knowing they have acted legally, by what moral standards should we judge them? Yours?
How about society’s, where the position on this is now very clear?
The way things are going we may well be ruled by those large corporations soon. Elections will be just to elect the biggest party of sycophants to parliament/congress etc. Or maybe they already are?
The question is – who cares? You are still obsessed with tax.
The lugubrious left is obsessed with paying tax and wants it to be as high as possible for some reason. They seem to think it is morally purifying or something. Those outside of Murphy land do not.
Your beliefs are simply wrong.
“Get real Peter: if you can’t collect tax printing more money creates inflation
And if you can’t collect tax equitably then that failure causes social unrest
So these issues are related. I buy the idea of spend and tax. But spend is not possible without tax even with sovereign money if the economy is to be managed
To say otherwise is just wrong.”
That’s just not true and it is very dangerous for you to say so. My response would be if rich people are spending more you have to ban Leah Jets, tax luxury goods etc. Rationing in very extreme cases. Functional Finance is about dealing with spending in the economy *now* and if rich people do spend on certain goods then you have to put measures in to deal with that.
In case of spending by the wealthy you won’t put the right policies in place to deal with it! And there is chance of “social unrest.”
As Neil Wilson says:
“Murphy has banned me from his site – because I had the temerity to question his religious belief in taxation. He is, unfortunately, obsessed with the Holy Power of Taxation.
“But spend is not possible without tax even with sovereign money if the economy is to be managed”
That is simply wrong.
Firstly there is saving. Saving is voluntary taxation and the more of it there is the more a government can spend without taxation. The very existence of compulsory retirement saving demonstrates that you can create the space without taxation.
Secondly there is the issue of what causes inflation. Inflation happens when there are multiple bids for resources. So you just make sure one of the bids doesn’t happen.
In terms of public sector contracts you do this by setting a price for the job lower than the market, so that the job – and therefore the spend – doesn’t happen unless there are no alternative offers in the market. That is how the Job Guarantee works by setting the price of labour at a value and letting the private sector bid off the top. But you can extend it to any ‘nice to have’ public sector spend or investment – whether that is insulating houses, replacing barriers down the middle of motorways, clearing weeds in cemeteries, etc..
Or you can use the other powers of government to ban or delay the competition. The classic one is of course the planning system where you can simply say that the schools have to be built before the casinos can start.
You can use the competition arms of government to increase competitive pressure in markets and force dynamic output expansion. Once you have a Job Guarantee you don’t really care too much about businesses surviving and so you can turn up the competitive heat – even to the point of funding competitors at slightly higher prices (Think how National Girobank offering free banking forced all the other banks to introduce free in credit banking). You need to do this as part of oligopoly control, but it also has the advantage of reducing the amount of taxation required. Effectively by squeezing the profit share so they have to work for a living, you create space and output.
Once you understand that tax is simply a hygiene factor – something people are required to do like putting out the recycling – and is only required if saving, import controls, planning controls, competition controls or the myriad of other methods there are fail to nip off demand.
It is just one tool in the modern money toolbox. Yes it is an important tool, but it should be used appropriately. Those who obsess about the taxation hammer are only capable of seeing the world as nails to be taxed. That makes them dangerously inappropriate people for constructing a working modern system.”
I hereby wait to get banned.
I did not ban Neil Wilson that I recall. He has not tried to comment since I made it clear I thought many of his views on tax, the tax gap and the social consequence of taxing repugnant, as I think they are
I consulted with some of the senior academics on this issue of MMT and tax and was told those expressing views like yours and Neil’s do not share their views
Actually – what you have written is so callous (e.g. Not caring if businesses survive) that I find it deeply repugnant
But I am increasingly of the opinion that it does reflect what might properly be called an MMT cult that undermines the merit of the insights of some, like Stephanie Kelton, and seeks to suppress debate on vital issues by the use of far right logic and abuses language
“Actually — what you have written is so callous (e.g. Not caring if businesses survive) that I find it deeply repugnant”
But if businesses can’t survive the heat of capitalism they should not. Business serves the people. Not the other way round. Why is competition a bad thing? What is “deeply repugnant” about it?
If you think tooth and claw capitalism is good for society, with all the waste and distress it causes, is in any way the right way to run an economy then you firstly don’t know how the real world works (the assumptions that suggest capitalism works are not matched by anything found in reality) and second you clearly have no comprehension that people run and work for companies as well as being their customers
That level of incomprehension and indifference does very definitely justify what I wrote
“Tooth and claw capitalism is good for society, with all the waste and distress it causes, is in any way the right way to run an economy then you firstly don’t know how the real world works (the assumptions that suggest capitalism works are not matched by anything found in reality) and second you clearly have no comprehension that people run and work for companies as well as being their customers”
Richard, did you read what I wrote?
If it is not run like that *it should be run as a public service*
You run capitalism on top of socialism – “virtual machine capitalism.” For example offering a Job Guarantee at the Living Wage. This combines the best of capitalism *and* socialism.
Capitalists must then compete for labour from the JG pool – investing and training to receive any profits. It’s the latter that is the valuable process in capitalism – just as the heat out of a nuclear reactor is the valuable bit. To get that you simply have to contain the nasty stuff using effective engineering.
That is what MMT is all about – effective engineering to make the system work properly.
If the JG is £10 per hour then capitalists must compensate people properly for doing anything else that is less pleasant than the JG job. That may be money, or it may be promises – but compete they must. It’s the lack of competition in the labour market that is causing the current malaise.
If capitalists can’t make a profit out of a process, then the process either dies, or if it is considered to have public value it becomes part of the JG job list.
Overtime you get towards equality as you move the bottom to the top.
What many on the left struggle with (especially you) is that things still need to be made – which capitalism is very good at – and you have no other rational mechanism by which relative value is ascertained even remotely accurately.
Once you strip rents and oligopoly out of the system competitive valuation is pretty effective – particularly when you no longer have to worry about whether a business lives or dies.
It’s a bad idea to throw the baby out with the bathwater. We tried that with the Russian based systems, and they don’t work. That’s why China changed course.
In particular the State needs to take a more pro-active approach towards attacking rent-seeking.
You can get to that by increasing the heat of competition. Breaking up firms, requiring them to be smaller and there to be many more of them in any particular marketplace.
The natural capitalist approach is to eliminate competition using a variety of techniques — from market niche to oligopoly. The state should spend a lot of its time ‘stirring the pot’ to prevent this happening. And the indication that the pot needs stirring is price rises of any magnitude in any market. That means encouraging and even funding competitors, forcing IP to be shared, etc to break the market power.
This is also why the Job Guarantee at the Living Wage is so important.
Switching to a bottom up system starts to move the income distribution curve back to where it should be and the production curve back to where it should be – dealing with needs firsts and then wants.
Wealth is redistributed because the rich suddenly have to start providing services for the poor if they want to earn the money.
Once you have a JG and the ‘business confidence’ bogeyman that Kalecki mentions is laid to rest then you can be far more aggressive pushing up the living wage. At the top end you give the Ministry of Competition real jack boots to stop oligopolies forming.
Businesses actually hate competition but of course they are supposed to be supporters of it. So you exploit that Janus issue to the full.
Wages are then controlled since excessive wage rises mean that some of the firms go bust and everybody loses their job — falling back to the Job Guarantee.
The level of competition considered ‘acceptable’ by regulators is too low. And that’s because of the ‘business confidence’ meme that scares them into inaction.
I guarantee you if you wrote half as many articles on tax and wrote about this you would be making a more positive contribution towards defeating corporate power. All this fiddling around with tax is not very helpful.
With respect your last line says it all (I did read the rest: it is pure quackery)
If you think I have wasted my time and that you are the holder of the one true light, dream on
And I won’t ban you
But please do not waste my time again
Sorry but reading through what’s been contributed here so far there is a fair bit of over simplification combined with flawed assumptions which do not match up to reality. As with everything in life theory never quite manages to survive it’s first encounters with reality because the devil is in the detail of how things hang together, or not.
There is too much to consider in one post so let’s just focus in on one area where this is the case, the fixation with competition and the ideological faith based assumption which pushes the notion that competition is THE only way to do anything and everything, period, end of, because that’s how the “real world” really works, so get with the program etc etc.
As in, for example:
“The level of competition considered ‘acceptable’ by regulators is too low. And that’s because of the ‘business confidence’ meme that scares them into inaction.
“You can get to that by increasing the heat of competition. Breaking up firms, requiring them to be smaller and there to be many more of them in any particular marketplace.”
“Why is competition a bad thing? What is “deeply repugnant” about it?”
We get the picture. And the words are the words as we used to say at Union Annual Conferences. There’s no ambiguity in the above quotes. No nuance. No differentiation. Just generic statements which convey to the reader this is generally applicable across the board. Take it or leave it, it’s the only realistic game on the board
And it’s not just wrong, its total bollox because there is no recognition in this viewpoint that competition is contingent upon context. That in some contexts competition produces the most effective outcomes whereas in other contexts it does not and never can. Other approaches, like Co operation, are necessary to produce the most effective outcomes.
Let’s consider a case study. Telecommunications. Although similar points and arguments could be made in relation to the competitive nonsense that is the internal market in the NHS; or the split between track and rail in the railway network; or bus deregulation and a shed load of other examples where this holy grail which is supposed to be the be all and end all of how things should be done; all of which occurred on the back of this unhealthy delusional obsession that competition is the answer everything.
The rental paid to BT Openreach (OR) to piggy back onto the network by other telcos does not realistically reflect the maintenance burden OR has to keep those assets running. Coupled with the City’s demands to remain competitive at the side of other telcos who have nowhere near the same overheads burden this impacts on the pace and level of investment needed to upgrade the network to the country’s needs.
Moreover, instead of subscribers (subs) having a single point of contact to deal with orders and faults OFCOM’s fixation with competition being the only way has created unnecessary, inefficient and ineffective duplication. If you are a sub with Sky or whoever else and have a fault you have to report this not to the company who will fix the line, OR, but Sky, who then contact OR who sends an engineer. If the fault is found to be on the equipment side of the exchange Main Distribution Frame (MDF) competition rules that he/she is not allowed to touch it. It has to be reported back to The OR back office Control, who contact Sky or whoever, who then send one of their engineers to check their equipment attached to the BT OR MDF.
This introduces delays to end users which is both inefficient and ineffective. I’m not making this up, I still have the original briefing booklet explaining all the nonsensicle Chinese walls and competition rules which have to be adhered to which includes, incidently, a yearly CBT compliance understanding package which everyone has to sit through and and answer questions on.
This situation was created by the regulators institutional fixation with competition being the only possible tool in the box. The answer they came up with in 2004 – break up everything into smaller units competing with one another has, quelle surprise, not delivered according to OFCOM who are currently undertaking another review which appears to be adopting the same failed approach which has produced the outcomes they are unhappy with and which they were informed would be the result at the time of the 2004 review.
The idea that in this context, which is not unique, breaking down into smaller units competing with each other is going to be the answer reflects a deep and fundamental misunderstanding of the real world and how it works. Those here and elsewhere who hang their hats on this notion need to get away from the comfort zone of their desks to spend more time in the real world and and less time demonstrating their lack of knowledge about the subtleties of how the coal face really functions.
Thanks for your patience in this explanation
“But spend is not possible without tax even with sovereign money if the economy is to be managed”
oh please – is this really the best you can do?
If “spend” is on performing assets then taxes are irrelevant in terms of pay-back. For example: the UK gov’ could easily fund power stations or power networks – it has done in the past – they made a nice return for the treasury. No taxation was involved since gov’ debt was used & paid back (with a surplus).
I have the impression that you inhabit Osborne-corner-shop-economics land.
Sorry Mike
If you really think we can inject endless funds into the economy, even into investment, without risk of inflation then you are living in cloud cuckoo land. We cannot, because the cash does not stay in the investment, it is transformed into incomes for which there is no matching production creating a supply and demand imbalance that is inherently inflationary
Now in corner shop world – where you are – this does not matter as the impact is small. In the macro world – where I am – this creates risk and tax removes it
And you may suggest I am in Osbornomics land once – but that will be it
If you’re really just here as part of the MMT cult, feel free to go and play on Neil Wilson’s web site because I deal in the real world. And yes that means I completely understand what MMT has to say about money, but I am not going to accept the abuse that seems to go with doing so on some people’s part
It would be good to create a new lexicon to de-bunk a lot of economic terminology for the results it creates in the real world. For example, in simple terms:
Competition creates winners and losers.
Co-operation creates real progress for all.
Free markets creates winners and losers.
Fair markets creates real progress for all.
De-regulation creates winners and losers.
Regulation creates real progress for all.
Private ownership of the means of production creates winners and losers.
Social ownership of the means of production creates real progress for all.
Indeed
I was interested to come across Michael Hudson’s ‘archaeology’ of the original meaning of “free Market”:
‘Industrial capitalism has failed to break free of pre-industrial usurious banking practice. And in the sphere of tax policy, it has not shifted taxes away from land and natural resource rent. It has inverted the classical reformers’ idea of “free markets” as being free from economic rent and predatory moneylending. The slogan now means economies free for the rentier class to extract interest and rent. ‘
Worth remembering as a retort!
Good one
I suspect had the interviewer pushed him a little harder he might have ventured his true feelings on the issue of tax; to wit, special companies like Apple should not have to pay any tax to any government.
Cut very much for the same shabby calico as his predecessor.
That’s an average between the North and the South, and it does not really apply to the North.
But even it taking it as it is, that means £12,000 a year for a decade of tax-free effort-free income for a working class family in the South earning around £16,000 after tax.
£12,000 a year of tax-free effort-free windfall is GIGANTIC, especially if it recurs every year for 10 years as per the above numbers; and actually it has been going on for 20-30 years. And for the millions of people with a house in London it has been even bigger than in the rest of the South.
Do people really realize what an extra £12,000 a year of (purely redistributive rentier) windfall going on for decades can mean on top of an earned after tax income of £16,000? For millions if not a dozen million families?
Do readers here realize what that means to “aspirational” Southern voters and what they are prepared to vote for to keep it coming?
And that most or all of that was due to government policy to bribe voters in the South and accordingly virtually none of that happened in the North? E.g. recently:
http://www.telegraph.co.uk/finance/personalfinance/houseprices/10812771/House-price-heatmap-its-still-winter-in-the-regions.html
Also note that while the colossal amount of government-sponsored private debt that has fueled the GIGANTIC tax-free effort-free capital gains has only produced them in the South, but the citizens of the North also are liable for it. And the call for “austerity” to drive down that debt has resulted in large cuts to the North:
http://www.bbc.co.uk/news/uk-22112965
Again, that one issue involves GIGANTIC amounts of money. Compared to that almost nothing else matters.
As to GIGANTIC, that £12,000 is just the entry level, for “hoi polloi” among the Southern landladies.
Here instead is my other “money shot” quote on how that one issue has influenced the middle-upper classes:
http://www.dailymail.co.uk/money/mortgageshome/article-2105240/Stuck-rent-trap-How-middle-class-family-kept-remortgaging-home-pay-bills-longer-afford-repayments.html
«Certainly, we overstretched ourselves when we bought our lovely period home for £419,000 in 2002. But with mortgage companies practically throwing loans at us in a rising property market, we slept soundly at night, smug in the knowledge the house was making us money. [ … ] The valuer had barely been in the house for five minutes yet we were able to borrow a further £80,000. [ … ] We were lulled into a false sense of security about our wealth. Whenever we overspent we just remortgaged without comprehending the consequences of taking yet more equity out of the property. [ … ] In our defence, we weren’t spending the money on expensive designer clothes, luxurious holidays or flash cars. Much of it was going on school fees and upkeep of the house.»
Those are GIGANTIC amounts of tax-free effort-free windfalls fueling a lifestyle full of “class consciousness”. That’s the Southern “middle-class” dream being realized and in this case popping. Another report on a similar case:
http://www.dailymail.co.uk/femail/article-2841450/Just-live-1m-house-doesn-t-mean-m-not-breadline-Ursula-knows-ll-little-sympathy-says-trying-match-parents-comfortable-lifestyle-left-penury.html
«While most of my contemporaries enjoyed all the perks of a middle-class upbringing in the Eighties – living in a spacious family house, private schooling and at least one foreign holiday a year – few of us can offer our children such luxuries.
Take private school. Both my husband and I were privately educated, but with four sons, we always knew we couldn’t do the same for them.»
«When I look at their generation, I am green with envy. My in-laws still live in the detached, five-bedroom home in which my husband grew up. It is worth at least £1.2 million, but it set them back only £20,000.
By the time they were my age, they had paid off their mortgage and sent both their boys to private school. Fees have quadrupled since 1990, from an average of £2,985 per year to £12,700 in 2014 – a prohibitive cost for most of my friends.»
All this “poor lady in a mansion” needs is for her £1m house to boom in valuation to £1,5m: an extra £500,000 of tax-free effort-free equity capital gain would solve all her problems, at least for a few years. If some clever devil called Dave or George offered her that, what would she care about anything else?
That one issue seems to me the “pulling thread” to unravel much of the political and economic history of the UK since 1980.
The Spectator reports publicly and authoritatively:
http://www.spectator.co.uk/columnists/politics/8886331/the-party-modernisers-are-thatchers-true-heirs/
«This makes it imperative that, in government, the Tories move the centre to the right. Thatcher grasped that, while Karl Marx’s political economy is wrong, there is something to be taken from his understanding of how politics works. Council house sales created a new class of property owners, privatisation a new private-sector workforce, and economic and regulatory reform empowered the entrepreneur.»
«His Chancellor and chief political strategist, George Osborne, is constantly looking for new ways to create Tory voters.»
By far the most effective way to socially engineer voters into tory (with a lower case “t”) voters has been Right-To-Buy, plus hang-and-flog policies targeted at older women.
For example apart from Help-to-Buy, the Right-to-Buy discount has been increased enormously, something that has gotten less attention that it deserved:
http://www.telegraph.co.uk/news/politics/9181928/Council-tenants-to-get-up-to-75000-to-buy-their-own-homes-David-Cameron-to-say.html
«The average Right to Buy discount, as a percentage of the market value of the property, fell from 50 per cent in 1998-99 to 24 per cent in 2008-09. In London, the figure fell from 53 per cent to 10 per cent.
The discount will more than quadruple the discount cap in London and treble it in most parts of the country. The discount will be available from today (3 April) to two million council tenants and another 500,000 housing association tenants.»
http://www.independent.co.uk/news/uk/politics/social-housing-in-crisis-as-too-many-homes-are-sold-under-right-to-buy-9684172.html
«Social Housing can now be sold at a discount of 70 per cent of its value, with a capped saving of £77,000 across England and £102,700 in London boroughs.»
«in London, where some councils have found they are so short of homes they are having to rent back the properties they recently sold.»
A fraud case makes it clear how huge are the profits from Westminster-Council style “social engineering”:
http://www.birminghammail.co.uk/news/midlands-news/birmingham-right-buy-fraudster-who-7764383
«A woman who claimed a whopping 70 per cent discount to buy her council house – whilst living in a second home that she owned – has escaped jail after admitting fraud.
Sonia Hunter became the first person in the Midlands to be convicted of a ‘Right to Buy’ scam after claiming a massive £46,600 discount on a home that she had no right to buy.
Hunter claimed the discount to buy her Newtown council house and went on to pay just £19,800 for it last year.
But the 57-year-old, who had been a council tenant in the Attenborough Close house for 34 years, was actually living at another home she owned in Erdington’s Court Lane.
The fraudster had bought the second house in 1996 and was renting out the council house.»
These are not so much *my* theories as really short (ahem) summaries of “conventional wisdom” among political strategists and political scientists and sociologists and academics.
They are not much discussed publicly because some of the aspects not “politically correct” and sometimes attract hate for being “divisive” or “discriminatory”. They are usually only discussed in technical papers using very euphemistic jargon.
Note that an important pollster thinks that *overall* political preferences are fairly balanced:
https://yougov.co.uk/news/2013/02/18/vive-la-similarite/
but under first-past-the-post what really matters is marginals.
Anyhow here is a really interesting summary of voting intentions, with a bit of detail as to by gender, age, class and region, but only since 2010:
https://www.ipsos-mori.com/_assets/political_monitor/voting_intention.html
Big differences…
So you’;re saying neoliberalism is the consensus
Wow
That’s some insight
I think I’ll save readers the acres of further space you are submitting after providing that summary