Wednesday, 12 December 2012

Tax avoidance ... is morally corrupt ... capitalism ... and evil!

Google's tax avoidance is called 'capitalism', says chairman Eric Schmidt.

Google chairman Eric Schmidt has insisted that he is "very proud" of the company's tax structure, and said that measures to lower its payments were just "capitalism". 

Mr Schmidt's comments risk inflaming the row over the amount of tax multinationals pay, after it emerged that Google funnelled $9.8bn (£6.07bn) of revenues from international subsidiaries into Bermuda last year in order to halve its tax bill. 
However, Mr Schmidt defended the company's legitimate tax arrangements. “We pay lots of taxes; we pay them in the legally prescribed ways,” he told Bloomberg. “I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate.” 
 “It’s called capitalism,” he said. “We are proudly capitalistic. I’m not confused about this.” 

In Britain Vince Cable was unimpressed by Mr Schmidt’s views. The Business Secretary told The Daily Telegraph: “It may well be [capitalism] but it’s certainly not the job of governments to accommodate it.”

A Californian pressure group called Consumer Watchdog wrote to the Senate’s Finance Committee demanding a hearing on Google’s “global tax avoidance strategies”.
Consumer Watchdog’s director John Simpson called for the Committee to schedule a time for Mr Schmidt and Google’s chief executive could “testify under oath and explain their company’s apparent abuse of the tax code to the detriment of all who play fairly.” 

Mr Simpson urged the Senate to work with “other countries’ tax authorities” to “put an end to egregious loopholes that allow cynical exploitation by this generation’s Robber Barons.” 

“Governments in Europe, many of which have been targets of Google’s morally bankrupt tax policies, are actively seeking redress,” he wrote. “But this is not a problem that only impacts other countries’ revenues. Google’s tactics strike at the US Treasury as well, forcing the rest of us to make up for the Internet giant’s unwillingness to pay its fair share.” 

He added: “What makes Google’s activities so reprehensible is its hypocritical assertion of its corporate motto, 'Don’t Be Evil'.” 

Documents filed last month in the Netherlands show that Britain is Google’s second biggest market generating 11pc of its sales, or $4.1bn last year. 

But the company paid just £6m in corporation tax. Overall, Google paid a rate of 3.2pc on its overseas earnings, despite generating most of its revenues in high-tax jurdisdictions in Europe. 

The company reportedly uses complex tax schemes called the Double Irish and Dutch Sandwich, which take large royalty payments from international subsidiaries and pay tax in low rate regimes.

By channelling its revenues through Bermuda, Google avoided $2bn of global income levies last year. 

The tax arrangements add fuel to accusations made by British MPs that Google and other firms including Starbucks and Amazon, have been “immorally” minimising its tax bills. 

Matt Brittin, Google’s UK boss, said MPs were blaming companies for a system that they had designed. “Google plays by the rules set by politicians,” he said. “The only people who really have choices are politicians who set the tax rates.” 

Last week, Starbucks caved into public pressure and promised to pay £20m to the Treasury over the next two years. However the trigger more criticism of “optional” tax payments. 

Friday, 7 December 2012

Ineptocracy - the cause of the deficit?

Ineptocracy - (in-ep-toc'-ra-cy) -
'A system of Government where the least capable to lead are elected by the least capable of producing, and where members of society least likely to sustain themselves or succeed, are rewarded with goods or services paid for by the confiscated wealth of a diminishing number of producers'.
The above definition of Ineptocacy could easily be read in two ways ... a dig at the poor and/or least able ... or a dig at the ultra-rich who misuse power and add no value, but gain wealth from ponzi ('money for nothing') schemes (eg counterfeiting money/gambling) and/or from the backs of hard working people who are actually adding all the value (but paying most of it back in tax - e.g. income tax, national insurance and 20% VAT) ... whilst the ultra-rich accumulate more wealth, more tax cuts and pay accountants to find any possible avoidance scheme so they can avoid paying any tax at all! **

The biggest problem by far is in fact the latter ... tax needs to be applied to non-productive ways of generating wealth (gambling, land, housing) as a matter of urgency ... and income tax for those adding real value reduced ... these actions together would both remove the black hole in the countries finances and reward producers who add real value!

Can this be done? ... of course e.g. by introducing a land value tax! ... However, those currently in power would never allow this to happen as it is not in their interests to do so ... as they want to be able to continue to make money from nothing ... and off of the backs of others ... and will fight tooth and nail to be able to continue to do so!   

Ignorance is not bliss ... and Poweromics is evil.

** We've started flushing out companies avoiding tax (e.g. Starbucks), but we need to expose all the individuals involved in this practice too ... starting with those with their grip on Power!

Wednesday, 31 October 2012

Flawed capitalism - lobbying and corporatocracy

Capitalism, which allows money to flow and be used without constraint, has led bankers to put money into where they get the 'greatest apparent return' ...

and unfortunately these places turn out to be ones where a community with any real moral code/values would not want it to go  ... e.g. 'money for nothing' schemes/scams ... and places where people can be exploited the most.

One might think in a capitalist system that any 'money for nothing' scam would quickly and naturally collapse, but this does not happen when the excessive profits generated are 're-invested' into lobbying Governments and policy makers to gain support/favour and put them into a position where their scam can continue to flourish and/or 'cannot' fail (e.g. as the Banksters did, and continue to do, hence the bailouts and continual pressure to water down any regulation).

The problem with capitalism is that money/wealth is naturally directed towards influencing those in power, to maintain/ further their position to exploit markets. For instance this occurred with banks persuading the Government to remove house prices from UK inflation figures, which created the house price boom (as interest rates would not longer have to increase due to a rise in inflation) and saw house prices triple in a decade.  

Some people argue that the problems we are now seeing are more to do with having a Corporatocracy rather than Capitalism, as corporations use money to unduly influence and control politicians in order to introduce/change rules in their favour (e.g. by relaxing financial regulations, changing food, health and energy policies ...).

Indeed before entering office David Cameron himself highlighted that Lobbying would be the next big scandal (post the scandal relating to politicians and the media), but on entering office he decided not just ignore it but to ensure that he benefited from it!

Lobbying is indeed a big scandal (e.g. banks 'invested' £100m into lobbying last year), but Capitalism creates an environment where a Corporatocracy can thrive, and creates many more problems besides (e.g. the movement of money to exploit people to the maximum, and the ability to move any wealth to tax havens in order to avoid paying any tax etc). 

Corporatocracy is indeed a big problem, but it only thrives due to the flawed and corrupt nature of capitalism.

Saturday, 15 September 2012

The Olympics ... and What a Show!

Over recent weeks the UK (and most of the world) has been gripped with one of the greatest shows on earth - the Olympics!

Held once every four years, thousands of athletes have prepared themselves for the biggest event of their lives! Putting their lives on hold, they have dedicated all their time and energy to the most ultimate of challenges - to see if they are the best in the world!

The building work started and the stage was set. Athletes from all around the world answered the call and descended in their thousands ... and made welcome by UK citizens!

The Olympic flame traversed the country, from coast to coast and from mountain to river ... making it to the peak of Mount Snowdon (a peak my brother, niece and myself had climbed just a week earlier)! It travelled on boats, steam trains and horse back. In fact it travelled in virtually every way possible! It took time to met the Queen, and many celebrities too, until it finally arrived at the stadium!

Once Britain had brought to life a little of it's history (e.g. the industrial revolution centred on the Black Country to the creation of the internet by Sir Tim Berners-Lee) the torch entered the stadium with a bang and the stage was set.

Sports stars took up the challenge and they did not disappoint. Whilst the athletes continued to practice the cyclists and rowers stepped up to the stage. Fast and exciting the thrills came thick and fast! The crowds were immense and the drama intense. Sometimes the 'form book' proved right, sometimes news stars emerged. Sometimes equipment broke, sometimes records were smashed (again and again)!

The swimmers also took to the stage and Michael Phelps was officially crowned King! A great man surpassing all Olympians (and a man also gracious in defeat)! The athletes took over and continued the show - with a thunderous lightning bolt and a massive Mobot. 

The lightening bolt joined forces with the Mobot, as Usain Bolt ran up to celebrate with Mo Farah on the track! As good friends, from very different parts of the world, they joined together in a joyous celebration and exchanged 'logo's'! A beautiful friendship and a pleasure to see!

The glamour girls delighted (e.g. Jessica Ennis and Victoria Pendleton) and advertisers ran to their door - all the glitz and the glam - there had to be more!

With thrills right to the finish no-one wanted it to end ... but with all the gold medals handed out there were no more victors to ascend.

So the closing ceremony arrived and a community tuned in ... to see the finale to the show, the glitz, glam and glee. The celebrities took over to put on a show, with their music, their glam and a massive fashion show!

The final show complete and the stage closed down ... sports stars joined the ranks of celebrity and retired on a high (nb Michael Phelps competed in 3 Olympics before finally retiring)!

And with the party over one finally reflects ... powering the industrial revolution Britain was indeed once great ... but due to the self-interest and greed of the few - e.g. in particular politicians, bankers, CEO's, celebrities, footballers, pop stars etc (e.g. Jimmy Carr and Gary Barlow recent tax scams) ... power and money has corrupted (take BSkyB and Football for instance) ... with glitz and glam now the order of the day ... firstly to hide the fact that Britain is now bankrupt and void of moral purpose ... and secondly to try to keep the majority of citizens in line ... by trying to say it could also be them (i.e. the next footballer, the next pop idol, or the next lottery ticket winner)!  What a thin veneer (and scam)!


Sunday, 8 July 2012

Corrupt capitalism: Banks are throttling Economic Recovery

Vince Cable

The Business Secretary, Vince Cable, today accused Britain's banks of "throttling" the economic recovery because of an anti-business culture which focuses on short-term profits. 

Speaking on the BBC1's Andrew Marr Show, the business secretary said: "The real problem at the moment is that the banks – because of their existing culture which is frankly anti-business, obsession with short-term trading profits, not focusing on the long term – are throttling the recovery of British industry."

The business secretary blamed the banks for undermining the multibillion-pound quantitative-easing programme by the Bank of England to inject liquidity into the economy.

He said: "There has been a breakdown in the mechanism, in the transmission. It just doesn't get through to companies. We are going to ensure that the new money that the chancellor and the governor of the Bank of England talked about at the mansion house does actually directly reach the companies.

"Given that our leading banks are, frankly, throttling recovery by not making business-lending available, particularly to small-scale companies, we now have to focus single mindedly on that task. How to make sure that the additional money gets through to business."

However talk is cheap ... as he/his party voted against a wide ranging judicial inquiry into the culture and practices of banks. His limited understanding of the level of corruption involved is also deeply worrying (n.b. the banks actually create/counterfeit over 90% of the money supply in the UK, not the Bank of England, and given this they are able to decide how they want to spend/gamble it).

We need to i) take back control of money supply (off the private banks), ii) separate casino banking and retail banking fully (i.e. not just 'ring-fencing') and iii) tax financial (casino bank) transactions just like any other form of gambling.

Only by doing these things will real businesses start to thrive and the UK economy start to flourish. Unfortunately Cable doesn't understand this, and the Labour party doesn't either (given their parallel announcements today)! 

No wonder Cameron and Osborne were desperate to stop a wide ranging judicial review ... as it would have started to expose/explain everything to them!