Here's how not to do it:
Telecoms company paid zero corporation tax in the UK this year
Google pays just £6m in UK tax on £395m earnings
Lloyds [Banking Group] will not pay corporation tax until profits hit £15bn
Amazon: £7bn sales, no UK corporation tax
Insanely Rich Tax Cheats Hid Over $21 Trillion In Offshore Accounts
Mobile phone scam costs VAT billions
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Here's how to do it:
UK mobile phone auction nets billions
EU fines Microsoft a record $1.3 billion
Standard Chartered reaches $340 million settlement over Iran
Bank levy to raise £2.5bn a year but bigger banks could still gain
London set for business rates rise to subsidise rest of UK
FirstGroup outbids Virgin for rail contract
Surely the point is that it is very difficult to force people to hand over x% of the value of goods and services exchanged privately, but if it is the nation-state itself which enforces, guarantees and protects certain monopoly rights or privileges, they can charge however much that monopoly right or privilege is worth and they will get it. You can justify it on a practical level or a moral level.
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Question: how long will it take me to explain to people that land 'ownership' is not the result of private contracts like owning a car or a painting, it is a contract between the land 'owner' and the nation-state? Just like a banking licence, broadcasting licence, patent protection etc.
The current owner of land may well have acquired the rights under the master-contract with the nation-state from another individual under a private contract and he may well have paid good money for them, but the subject matter of the contract is the privileges which the nation-state now bestows on whoever happens to be the registered owner at any particular time (the nation-state is even in charge of keeping the ownership records up to date).
Consider: if Mr A sells a second hand car to Mr B; the parties to the contract are Mr A and Mr B and the subject matter of the contract is the car.
By analogy: If Mr A sells land to Mr B, the parties to the contract are Mr A and Mr B and the subject matter of the contract is the rights bestowed on the current owner by the nation-state.
Mr A isn't providing or doing anything, he has produced nothing which he can sell to Mr B, and once the sale is completed he is out of there with his money and it's the rest of us who have to respect Mr B's right to exclusive possession; pay the taxes for the street cleaning, the local schools and the policemen to deter burglars. All these rights were previously enjoyed by Mr A, of course, he is just selling these rights to Mr B.
Unfinished business
1 hour ago
16 comments:
With the Microsoft antitrust business, is your line of thought that Microsoft is paying what it's worth for them to ignore EU antitrust measures through racking up fines?
Legally, only the sovereign owns land (except in the Orkneys and Sheltlands, thanks to their Norse heritage).
Freeholders only have "title" to land, and are really just another category of tenant, holding land in fee simple of the Crown.
I think the Queen-in-council could still reimpose petty sergeanty on such tenants. A few manorial demesnes are still liable for this feudal due, although payments is in kind and of a token nature.
But what if it was applied to all freehold tenancies, in the form of LVT?
Kj, the short answer is "Yes". Being entirely fair about this, all governments protect/respect Microsoft's patents etc to a large degree and that has enormous value to Microsoft. Ultimately, that is what the government(s) can collect from them without damaging their business.
IH, let's not get bogged down in English land law, it has its own quirks, but so does the land law of every country, land law being almost entirely artificial. The same basic model holds for each and every country: the nation-state provides services of whatever value to the 'owner'.
If we apply some vague idea of constitutional or historic rights to all UK land, you might well find that Stamp Duty, Business Rates, Council Tax (or Domestic Rates) and Inheritance Tax are somehow magically invalid.
The tax system runs completely in parallel to such legal artifice.
"Consider: if Mr A sells a second hand car to Mr B; the parties to the contract are Mr A and Mr B and the subject matter of the contract is the car.
By analogy: If Mr A sells land to Mr B, the parties to the contract are Mr A and Mr B and the subject matter of the contract is the rights bestowed on the current owner by the nation-state."
This is just absurd.
What is ownership of a car? It is two things: (i) being able to use it to the exclusion of all others and (ii) the value someone else is prepared to pay if the current owner chooses to dispose of it.
What is ownership of land? It is two things: (i) being able to use it to the exclusion of all others and (ii) the value someone else is prepared to pay if the current owner chooses to dispose of it.
A car has value in both situations only because the right to use it to the exclusion of all others is protected by law and the right to transfer future rights of use are protected in law. So it is with land.
The distinction between a car and land is that the value of a car (save in limited circumstances) drops over time because it has a limited useful life whereas land is (save in limited circumstances) permanent.
The distinction is not, as you suggest, that a car is a car whereas land is a bundle of rights protected by the State. Both have attached to them a bundle of rights protected by the State.
TFB, you know that you are wrong when you start flailing about with this "Yeah but the state protects car ownership" argument.
Ask yourself:
Who created the car in the first place? People have to put a lot of effort and skill into making the car in the first place. The land is just there.
Yes, in theory, the police will chase after car thieves. IN practice, how many stolen cars are recovered and how many are paid for by the insurance company?
Do cars with good locking and security systems cost more than ones without such stuff?
Can you move a car? What happens to the value of a car if you move it from a poor area to a wealthy area?
How would you apply your logic to e.g. services like hair cuts or going to the cinema? Would you seriously claim that a hair cut or a trip to the cinema only has value because the state protects your enjoyment of it?
If cars and land are too difficult for you, try comparing "land" and "buildings".
Let's say half the cost/value of a house is the location element and half is the buildings. How much human effort and ingenuity did all the owners of that location put into enhancing the value of the location over the years and how much human effort went into creating the building?
This pretence that "land is just capital like anything else" is one of the main lies perpetrated by the Home-Owner-Ists. Until about a century ago, economist looked at things in terms of land-labour-capital.
You lot now pretend that land and capital are the same thing and that is quite simply a lie. You might as well pretend that the clouds or rain or the sky or the ocean is capital.
"What is ownership of a car? It is two things:"
Four, actually. You forgot the ability to destroy the car and the ability to move it to somewhere where your exclusive possession of it is not guaranteed by any state. Anyway, as a lawyer, you know that you cannot dispose of land, you can only sell the right to exclusive occupation. The land belongs to the crown.
B, TFB is deftly changing the topic as all good barristers do, because he knows if he answers the question he will have to admit I am right.
I am talking simply about the subject matter of the contract.
A car is a lump of metal and rubber worth £100 plus £10,000's of labour and skill and effort. When Mr A sells Mr B his second hand car, that is what Mr A is selling and that is what Mr B is paying for. Mr B is not paying Mr A for the police protecting his car ownership, he pays for that himself.
(as a thought experiment, even stolen cars have second-hand value, even though the nation-state frowns on such things).
When Mr A 'sells' land to Mr B, what he is selling him is a purely abstract legal right to exclusive occupation/possession of an area denoted by certain points on a map. Those geographical points were always there and those rights are granted/protected by the nation-state.
The existing "contract" between the nation-state and Mr A is novated and now becomes a "contract" between the nation-state and Mr B. That is the subject matter of the contract.
"...banking licence, broadcasting licence... Why either? Sure, you can tax bank rent receipts and auction the electromagnetic spectrum, but why on earth do we these outfits need 'licences' at all?
"...(as a thought experiment, even stolen cars have second-hand value, even though the nation-state frowns on such things). It's not 'even', it's 'of course'. It's why they are stolen!!
L, there's no overriding natural reason why you need a licence to open a bank, apart from cutting out obvious pyramid fraud schemes.
But there's only so much radio spectrum. If everybody could broadcast whatever he likes when he likes, then radio spectrum would be worthless.
As to stolen cars, I'm not sure what the current legal position is. TFB to confirm, but I think if you buy it in good faith then you can keep it. Or you certainly can in many countries, even if not in the UK. And stolen cars still have a market value, as do illegal drugs, for example.
MW I did say 'auction off the electromagnetic spectrum'. Isn't that rather like 'land'? If so it's ownership' in the same sense and what the State actually does is not licence the owners but stop other poeple theiving it? It would be a 'property right'?
I think resold stolen cars are a method of getting hold of cash. A steals B car and then sells it to C. As A has no legal right to the car he cannot transfer its ownership to C. It remains B's property and C will have to give it back. What A has done is con C out of a bunch of cash.
L, it's six of one, half a dozen of the other. By definition, if the govt sells you or grants you the exclusive right to broadcast at 95.8 FM, then by definition it promises to track down and kill pirate radio stations who try to use that frequency.
As to cars, what I mean is that there are fences who buy stolen stuff. For sure, they buy it at a very discounted price, but they still buy it.
MW: I think it's fair to say that MS has enjoyed their fair share of privileges through the times. I remember a few years ago, when several governments thought out loud about the idea of using open source software in public departments, among those Norway. This idea was swiftly followed by a friendly visit to the relevant departments by CEO Steve Ballmer.
MW. True True. And them fences then tear down the stolen car for parts, or ship it off to the Balkans in a container through Felixstowe...
Kj, you do hear horror stories about each UK government departments buying hundreds of separate MS licences for £100 each, instead of one man going to MS and saying "Right, we need two million licences, can we call it £20 million a year for the lot, after bulk discount?"
L, which brings us neatly back to the post.
It is of course impossible to tax the income of stolen car dealers; and it is very difficult to tax the income of car manufacturers, car importers and car workers.
But it is easy to tax petrol and easy to charge car manufacturers for the value of their patents or the land they use etc.
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