Ukuncut: not moral but feral

Posted by Christie Malry on March 15, 2012 at 11:16 pm

In a brief discussion with Twitter blowhard Spitefuel about the Vodafone tax avoidance case, he dismissed the facts of the situation, claiming that it didn't matter because Ukuncut's case was a moral, not a legal  one.

I disagree wholeheartedly. It's simply untrue that you can remain disinterested in the facts of individual taxpayers. In each of the cases raised by Ukuncut, there have been very serious errors in their fact-finding, analysis or judgment. You cannot legitimately paper over these cracks by claiming the moral high ground.

  • in the case of Sir Philip Green, they are claiming that Lady Green, a non UK resident, must be treated as Sir Philip's property. And therefore that her income should be taxed as if it is his income. Conveniently, this would have increased the amount of tax paid by the Greens to HMRC in 2005, a year in which Arcadia, owned by Lady Green but controlled by Sir Philip, paid a very large dividend.
  • in the case of Boots, they are claiming that it's unfair that Boots should get a tax deduction for interest paid on its loans.
  • in the case of Barclays, their analysis was just plain stupid. This "evidence" was so flawed that it provided no meaningful support for their hypothesis that Barclays avoids tax (even though, thanks to their own disclosure, we now know that they have sought to reduce their tax bill).
  • recently, it has been claimed that companies that move jobs to countries with lower employment costs should be fined. So you get idiotic claims like this (from Google+):

  • in the case of Vodafone, it was argued that Vodafone should just accept UK law as written, even if that law appears both to be illegal under European law and leads to double taxation.

Ukuncut also employs some very unorthodox strategies for executing its campaigns. For example, disrupting Saturday shoppers, supergluing themselves to the insides of shop windows, setting up fake hospitals and libraries, trespassing in Fortnum & Mason, and aligning themselves to the ill-fated OccupyLSX movement. Ukuncut likes to take credit for things it didn't do, but denies responsibility for things it fairly clearly did. Most shabby was its ludicrous insistence that the custard pie attack on Rupert Murdoch by a Ukuncut founder was nothing to do with them.

Both the errors of analysis and the methods are justified by its moral purpose. The ends justify both the means and the very campaign itself. But this is self-referential. Over a year after Ukuncut started, it has yet to provide concrete evidence of any of its allegations. At best, it has the hint of wrongdoing. At worst, it has it plain wrong.

So, we have an indifference to facts, an inability to analyse, a refusal to accept criticism, an unwillingness to correct error and a catalogue of disruptive and dangerous antics. This isn't a moral campaign. It's a feral one. And it's time for Ukuncut to get a grip or to get lost.

Occupy London and the dead hand of the state

Posted by Christie Malry on November 20, 2011 at 11:15 pm

The dead hand of the state represents those bits of the economy that never happen at all because of the interventions of the state. The most obvious example is tax, but the dead hand of the state can also work its evil through regulation.

Interestingly, in their attempts to show that there's a better way of organising society, Occupy London manage to demonstrate beautifully just how the dead hand operates:

James Sevitt of Occupy London’s Tent City University commented: “As we enter day 36, it’s hard to imagine Occupy London not being part of the City of London now. There is a real sense of community growing, as campers, speakers, workers, tourists mix, engaging diverse views about how we can create a more just society. This is collective thinking and wisdom in action.

No, James, there isn't wisdom in action. It's dead easy to set up any sort of co-operative. What's difficult is keeping it going. We solved this sort of problem centuries ago, by creating currency. If you work for the co-operative, you get given tokens, which you can then spend at the co-operative. No token, no service.

Unfortunately, the government messes all of this up. It says that if the co-operative employs you to work for it, then instead of giving you 10 tokens, it must pay you 7 and give the other 3 to the government. It then says that just for the privilege of employing you, the co-operative must pay an additional token to the government. But that's not all! The government then says that anyone buying from the co-operative must pay an additional 1 token for every 5 spent at the co-operative.

So for a total employment cost of 11, you get 7, and you can only buy 6 tokens' worth of goods with it. Pretty sucky, right? If you can't get enough from your contribution to the co-operative to make it worth your while, you simply won't contribute at all. And if all that tax makes the co-operative's prices too high, people simply will stop buying from it.

What does the government do with all that money? Why, it hires employees of its own! And those employees grab their clipboards and head on down to the co-operative to ensure that only properly regulated people are allowed to work there. That reduces the supply of labour which, when you're trying to set up a co-operative in which everyone contributes, is sort of a bad idea.

Now, of course, Occupy London didn't set up a token system. Nor did they use cash. If they had used cash, they'd have had to register all their services for tax purposes and pay tax on them, and they'd have had to establish proper employment contracts. So it's all done on a strict voluntary basis only. For a group that's seemingly opposing the Big Society, this seems strange, given that they're effectively proving that the Big Society can work.

However, any fool can set up a food tent or pretendy university. But running a restaurant to national hygiene standards that can pass an Environmental Standards inspection, while paying its staff's wages and employer's national insurance is hard. Setting up a university that can deliver proper, accredited degrees, while paying its staff union-agreed wages and pensions is hard.

We didn't need Occupy London to tell us that. But it does appear that they needed to learn this simple lesson in economics for themselves.

Quite amusing

Posted by Christie Malry on October 27, 2011 at 6:59 pm

A search term that led someone to my site:

we are the 99% slogan merchandise

More tax lunacy from Occupy London

Posted by Christie Malry on October 27, 2011 at 12:02 am

I really must stop reading the Occupy London Direct Democracy website. It's truly bad for my blood pressure. Today's vignette:

Oh Sandy. The '7 year rule' for gifts relates to inheritance tax. The idea is that a dying man shouldn't be able to artificially reduce the value of his estate by giving away vast gobs of cash on his deathbed. So gifts within the last 7 years of someone's life are scooped back into his estate for calculating his Inheritance Tax bill. There are some complicated rules about exactly how this calculation is done in practice.

It's insane to describe this regime as a 'tax avoidance loophole'. However, if you insist on doing so, there are two possible alternatives:

  1. You tax all gifts as part of the deceased's estate. This would mean trawling back through decades of records to trace every single gift and seeking tax payments from possibly dozens of people. The administration would be incredible.
  2. You tax all gifts at the time of receipt. This would mean the taxman turning up on Christmas Day to demand tax be paid on little Johnny's gift from his aunt. It's totally illiberal and unworkable.

At the time of writing, Sandy's proposal enjoyed a 5-2 majority. I weep for the complete lack of common sense among these idiotic kids who propose their way as a viable alternative to our - admittedly flawed - Parliamentary system.

How misinformation about corporation tax breeds on the Internet

Posted by Christie Malry on October 25, 2011 at 10:43 pm

I was having a browse through the Occupy London Manifesto site the other night. And I came across this:

Er, what? This is so self-evidently false, it's startling that anyone could believe it. But where does this "fact" come from?

Well, there's this blog post:

But it really sickens me that my little business must pay tax and go through scrutiny of Customs and Revenue, and 98 of the top 100 grossing businesses in the UK DO NOT PAY ANY CORPORATE TAX!!!! That’s right, they skirt by that bothersome issue by renting a cheap office space in Jersey, and saying their business is based there!! It is absolutely disgusting what lengths businesses will go to to avoid paying their fair share.

The post doesn't provide any calculations, nor does it explain how you go from "avoid paying their fair share" to "DO NOT PAY ANY CORPORATE TAX".

But what's the source for Grande Dame's claim? Well, it comes via our friends Ritchie and the NGOs, who - you'll remember - had some fun with counting the number of subsidiaries of FTSE 100 companies which are based in what they define as "tax havens". They draw this up broadly, including the US state of Delaware (tax rate: 35%), Ireland and the Netherlands.

I already highlighted how Ritchie was playing fast and loose with his interpretation of the report. Given his following, this is grossly irresponsible.

But he's not alone. Sky News's report is equally sloppy. Under the headline "All But Two FTSE 100 Firms 'Avoid Paying Tax'", they say:

Action Aid found that 98 out of the 100 companies on the FTSE 100 base their operations in territories where there is low or no tax.

Gah! There's a whole world of difference between "having a subsidiary in" and "basing their operations in". And it's that sloppy, thoughtless journalism that feeds idiotic blogs, and ultimately fuels moronic policy proposals in left-wing manifestos.

We aren't the 99%

Posted by Christie Malry on October 24, 2011 at 9:16 am

While certain pundits have celebrated the "We are the 99%" slogan as brilliant, it is beset by problems:

  1. While it's mathematically true that the vast majority of the population, including me and most probably you, are indeed in the 99%, that doesn't automatically give legitimacy to what a small portion of that 99% does in the name of the rest of their brethren. The people who are defiling London's public spaces and poncing off the free wifi at Starbucks don't act in my name. While public opinion is hard to gauge, the comments on this article on the Guardian suggest that, even in a friendly newspaper, there are many - far more than 1% - that totally disapprove of the protests.
  2. There is no consistency over what constitutes the "1%". The term is bandied about to refer to banks, politicians, rich people or any corporation. Given that companies can't vote, it's silly to lump them into the 1%. Particularly as the companies are actually largely owned by us, through our pension funds.
  3. Even though they deny it was down to them, it was a major mistake to stand off against St Paul's, an action that has led to the cathedral's closure. St Paul's is the city's and the country's treasure. It's the landmark that controls so much of London's building development because its sightlines must be protected.  Recently it was refurbished at a cost of some £40 million, to restore it to its past beauty. The protestors would be foolish to presume that the majority in London will tolerate this defilement of such a national institution for that long.
  4. The top 1% contributes a phenomenal amount to our nation's coffers. Looking at direct taxes alone, the richest 1% pays over 25% of all income tax. The current protests against the rich looks very much like an extreme case of sour grapes.
  5. The protestors don't know what they want, other than something "different". They won't be able to get beyond tiny amounts of support until they can define more clearly what they stand for. Their current ideas are totally incoherent and, frankly, bonkers. If they don't decide fast, they will lose all the momentum they have gained. At the moment they look like they may yet end up more inscrutable, more indecisive and more unaccountable than the politicians they want to replace.
  6. The basis of democracy is that it represents everyone. Democracy insists that minorities are protected, even those that did not vote for the ruling party. It's unethical to allow the majority, even an overwhelming majority, to gang up on a minority. And this remains true, even when talking about a minority for which many in the majority may have little sympathy (the super rich). In blaming all our society's woes on "the rich", there are ugly echoes of the hounding of Jews throughout history.