Tim Worstall thinks the UK has gone off the edge on this one:
Not just that people are panicking over the morals of it all, but that they're entirely ignoring the evidence as they do so.
The issue is whether corporations are paying the tax some people think they should. The thing is, people seem to think the corporations owe tax that they don’t.
Here’s one example:
Starbucks’ UK sales during the year rose 4 per cent to £413.4million – the biggest increase since 2008. But the company made a loss of £30.4million …
Why Starbucks isn't paying the corporation tax due on its profits is thus explained: it's not making any profits that it has to pay corporation tax upon. But such is the moral panic that people are still shouting at them. [in the UK]
That’s right: Starbucks UK is not a successful business. It’s losing money: it spent £443M to bring in £413M. In saner times, this is a reason to cut their taxes.
But these are not saner times: if a green energy company lost money like this they’d want to increase its subsidies.
There’s a very clear message here: Starbucks is wearing a black hat, and therefore they are bad guys. Bad guys get punished by the taxing power of the government. So the tax authorities must be the guys in white hats. That’s always been my impression of those lovely folks, eh?
Tim goes on to point out that, when in a moral panic, people spout lies and no one calls them on it. Try this one out:
The second is about the water companies:
Britain's privatised water firms have ‘abused’ loopholes in the law to dodge more than £1billion in tax since the election. A dossier of shame reveals nine water companies, seven of which are foreign owned, have racked up operating profits totalling £10billion since 2010 but paid just £541million in tax. This equates to a tax rate of just 5.3 per cent. Corporation tax on operating profit is normally 23 per cent.
Did you catch that? Maybe not: there’s an implicit claim there that they owe tax on operating profits.
Roughly, operating profits is what you have before you subtract out fixed costs. You don’t think that maybe water companies have big fixed costs, do you?
Of course, there is one arena where you’re expected to pay your tax on operating profits, without regard to fixed costs: when the thugs of organized crime show up and ask for their cut.
I think these moral panics, as motivation for policy, are far more common than generally thought.
The fundamental question to ask is WTF is so important to fund that you’d lie to raise funds for it? You know … who’s lung transplant is on the line here.
Oh wait … no one’s …