Alex Hawkes at Accountancy Age has suggested that the government's approach in new offshore abuse rules, previously discussed here, is Marxist.
Dennis Howlett has suggested that my support for the CFC rules makes me Old Labour.
Actually, my logic is much more simple. Alex really uses his blog to question whether the economic activity undertaken offshore is 'real economic activity', or not. My answer, on Alex's blog is:
The answer is of course obvious Alex. It's that the Treasury do not think that offshore [corporate] Treasury activities are real economic activity.
And they are, of course right. There are two reasons. First of all, they are managed onshore, so the offshore element is a charade. Second, they apply only intra-group. In other words, these do not involve real exchange.
So of course they are artificial. We should welcome the fact that the Government has seen through the smokescreen. There's nothing Marxist about that. It's just about stopping what I'd call, in simple but direct language, cheating.
And there's no reason to reach into the realm of politics to interpret that suggestion. Cheating is cheating, in anyones book.
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I did say ‘preposterous!’
I have just reread some of the draft legislation to enact this decision. I’m very pleased to note that the new rules apply an additional ‘effectively managed’ condition so that in relation to CFCs in EU Member States there must be ‘sufficient individuals working for the company in the territory who have the competence and authority to undertake all, or substantially all, of the company’s business’.
Quite right true. Dennis is right: the government and TJN are as one on this issue. It has to happen sometimes.
The problem is that mainstream political thought (that is not idology) has deemed itself devoid of ideology and therfore makes anyone who has devout ideology open to criticism of being Marxist. This is a cop out for real political, social and economic debate.
To label Richard as a Marxist is to say that he only has one tool in the tool box. Before becoming a social scientist I was a mechanical engineer with many tools in my box, but Richard has many more tools than I, and I find Alex’s remarks unsubstanciated.