For example, when they protest about Vodafone they seem to be saying that a UK company must pay tax in the UK on profits it made in Germany, selling things to Germans from German shops. Yet when they talk about Boots it seems that a Swiss company must pay tax in the UK on the profits it makes selling things to Britons from shops in Britain. It’s very difficult indeed to see how both desires could be met: either tax should be paid where the economic activity is, or tax should be paid where the company resides.
Their protests over Philip Green seem even stranger: everyone agrees that the company, Arcadia, has paid its taxes in full, and that Philip Green does so on his wages. The complaint seems to be that his wife, Tina Green, who is a foreigner and lives abroad, should somehow be paying tax in the UK. Are we now to try and tax rich foreigners wherever they live? And Barclays? Well, one reason why Barclays’ tax bill was so low is that it used exactly the same tax law the Guardian Media Group did when it sold Autotrader – that law that Gordon Brown and Ed Balls brought in saying that when you sell a subsidiary there just isn’t any tax to pay.
As if these details weren’t bad enough, there is also the basic point that companies don’t pay tax, ever. It’s always some combination of the workers, the customers and the shareholders: and the way that the world works at present, it’s mostly the workers in the form of lower wages. So the basic economics of taxation tell us that by protesting in favour of higher corporate taxes, UK Uncut are in fact demanding lower wages for all.
The paper being released today discusses these points in more detail and even manages to come up with an economically sensible suggestion: we should abolish the corporation tax altogether and replace it with a combination of property taxation and a higher VAT – or perhaps a progressive consumption tax.
Please do read it before you start criticising me, and please do try and get those in UK Uncut to do so as well. We really do want the youth of today to understand some of the complexities of the world before they take over yet more of the high street.