We need to forget all the pious nonsense about global companies not observing the spirit of the law or the morality of tax avoidance (leading article, 6 November) and face the reality that corporation tax on profits of multinational companies does not work.
Multinationals can adjust their profit or loss figures in many ways – they can easily adjust transfer prices and take profits in tax havens. They can doctor profits figures by imposing arbitrary management and royalty licence charges. In the event of being challenged in the courts they can afford to engage expensive tax lawyers and indulge in protracted legal challenges.
Corporation tax should be replaced by something that will work. The obvious way – despite all the problems – is to levy a tax on the revenues of domestic sales. The principle is eminently fair and simple: if you sell in the UK you pay a revenue tax on what you sell within the UK but not on exports. It would provide a level playing field for UK-based companies (who are disadvantaged now because they pay corporation tax) and incentives to export.
We are delighted to see Chancellor George Osborne and his German counterpart calling for the world’s leading economies to combat tax avoidance and to force corporations to pay their fair share of tax or face the consequences (report, 6 November).
Yet G20 leaders have made similar statements since the start of the current crisis – but not taken determined action to change the rules that enable multinationals such as Amazon, Starbucks, Facebook and Google to avoid paying their fair share. As a result, the tax burden on ordinary citizens and small and medium businesses is growing.
Developing countries are the worst affected. Each year, they lose more as a result of tax-dodging by rich individuals and multinationals than they receive in development aid. If the G8 and G20 are serious about eradicating poverty, then they must urgently tackle tax-dodging. The UK Government has a leading role to play in 2013, as chair of the G8.
Important reforms include governments automatically exchanging tax information, the disclosure of who really owns companies, foundations and trusts around the world, and the introduction of country-by-country reporting by multinationals. This last move would help to expose companies which are artificially shifting profits from the places where they were made and into tax havens.
Principal Economic, Justice Adviser, Christian Aid, London SE1
Multinational tax avoidance could be addressed in a very different way. Shareholders require audited statements of profits and turnover since these substantially affect share valuations. If a company such as Amazon or Starbucks has 10 per cent of its sales in the UK, it can simply be taxed on 10 per cent of its total global profits, possibly with allowances for hard capital investment in the UK. Such an approach completely gets round the labyrinthine opportunities to avoid taxation that so delight accountants.
Don’t demonise Newsnight over isolated errors
The repeated mantras that the BBC is in crisis, that Newsnight is a disaster, that the whole BBC needs reform, that heads must roll, run the risk of making them so – an outcome over which commercial interests, no doubt, are licking their lips.
One mistaken Newsnight broadcast about an unnamed Tory and one (arguably) mistaken Newsnight nonbroadcast regarding Savile, out of thousands and thousands of excellent broadcasts, in no way shows that Newsnight is a disaster area, that there is a crisis, and that people should abandon trust in the BBC.
Were a couple of mistakes sufficient to make a crisis, then Parliament, the NHS, political parties, universities, royalty, religions, newspapers, large corporations, should all be deemed to be in much greater crises. It is all quite ridiculous. By the way, I – and I suspect millions – did not “work out” that the unnamed Tory was McAlpine until he told us.
It is ridiculous that the Director-General of the BBC has to resign over bad journalism that didn’t in itself do any harm, but that the head of News Corp remains determinedly entrenched after criminal journalism that ruined lives.
This is why print media should be held to the same standard as broadcasters, and I hope Leveson takes a strong lead in that direction.
To read the smug, selfsatisfied and desperately delusional crowing in newspapers over this affair is bordering on nauseating.
George Entwistle behaved honourably by resigning, posthaste, without fuss or complaint – if only our errant MPs and ministers were as dignified Westminster would be a less shameless place.
A witch hunt involves moral panic, mass hysteria and, in extreme cases, a lynching or burning at the stake. A fundamentally decent man has been “lynched” after less than two months in his job – and by whom? People who will smugly tell us that they were only doing their jobs and that his “resignation” has nothing to do with them. While these people are still in employment, probably gloating over the demise of George Entwistle, hundreds of abused children are no nearer to receiving justice. We live in depressingly strange times where McCarthyism appears to be making a comeback.
Don’t be too hard on George Entwistle. He needed the moral vision of a Florence Nightingale and the practical grip of a Genghis Khan.
The fascination of US elections
Ian Fairburn (letters, 10 November) questions the amount of UK coverage of the US election. The fact that people here are far more interested in what is happening in the US than they are in us is much to our credit.
It also reflects the fact that we appreciate the future direction of the US economy will have a significant impact on her trading partners. The policies which the US implements to avoid recession and maintain economic activity are of vital interest to us all.
I believe we are fortunate that Americans rejected the policies of tax cuts and reversing social policies, such as the health-care reforms, in favour of investing in skills and infrastructure. The result will be that the US is likely to avoid the kind of reductions in growth, lending and spending which have sent many European economies into tailspin. I will continue to watch what happens in the US with great interest.
The US election has generated unbelievable volumes of portentous claptrap. One detail which is seldom mentioned is the turnout: 14 million fewer people voted than in 2008, presumably with a larger electorate this time. The fact is that US democracy is grotesquely dysfunctional – far fewer people vote than in, say, municipal elections in France or Italy, despite the billions spent on campaigns. Can we draw any momentous conclusions from this?
The glories of Radio 3
Fiona Sturges seems to criticise Radio 3 on the ground that it has “an audience a sixth of the size of its rival Classic FM.” That is like criticising The Independent because its readership is a fraction of that of The Sun. They have quite different purposes and audiences. Radio 3 is one of the glories of our cultural life. It is difficult to imagine Classic FM devoting days to the entire Ring cycle, or clearing its schedule to play the complete works of a single composer.
It is also misleading to regard them as rivals. If Classic FM closed down tomorrow it is hard to imagine many of its listeners switching over to Radio 3. By all means try to attract new audiences, but don’t throw the baby out with the bath water.
What constitutes a “family”?
With reference to plans to limit benefits to two children per family; in an age when both men and women sometimes have children with more than one partner, please will someone in government define “family”?
Misplaced praise for Charles
Dominic Kirkham’s praise for Prince Charles’s activities (letter, 8 November) is totally out of proportion to the added value that the prince brings to the nation. Charles enjoys vast unearned wealth, mostly from the British people, and not as a result of his own skill or effort. If I had access to similar resources, I too would be one of the “great philanthropists of our age”, but this would be the least that would be expected of me, and I would not expect public canonisation for it.
That a BA student at Goldsmiths college should be able to include in her curriculum the, for her, challenging task of drawing a chalk line on a pavement (report, 9 November) tells us a lot about the required standard of degree tuition at the college. Probably too much for comfort.
Just after noon
One aspect of the aftermath of the Presidential election has distressed me. The Independent commented that as Mr Romney’s political career appears to be at an end he will have to decide what to do in his “twilight years”.
He is 65. I will be 64 later this month. My firm view is that I am at about the 2pm or mid-June of my life.
It appears the Government is coming around to Ukip’s way of thinking on wind turbines, sentencing policy, EU budgets and European Arrest Warrants. Hopefully next year it will be flat tax and a return of grammar schools. Our “Dave” is a bit slow on the uptake, but we’re getting there.
Godfrey Bloom MEP
Ukip MEP for Yorkshire and North Lincolnshire Selby, YorkshireReuse content