News commentary and predictions of political trends and what the future holds

Corporate Taxation

May 12, 2014

If Google, Apple, Amazon and other multinational corporations can operate in the UK declaring all corporate profits in low-tax Luxembourg, then all companies that operate in the UK should operate out of a Luxembourg headquarters. They have been set a precedent, which if not legislated against fairly could cause a revolution of sorts, businesses becoming independent of the legislatures in which they operate. It effectively ends the concept of the corporation being a citizen of a nation.

To allow existing laws with all their loopholes to exist, the Government is allowing much capital dilution in the economy (inflation) but the unfair tax laws make repatriation of this capital unlikely and that allows the Government to hoodwink the population with “low inflation”.

Imagine, if all the tax-protected capital was to flood back into the UK at once, the inflation would be ridiculous. But by keeping UK interest rates low, by allowing this offshore sequestering of capital in tax havens, the Government uses QE without risking inflation showing up in the economy.

The Chancellor, the Government and the opposition are all guilty of short-term thinking. As they deflate the value of the currency by QE, they watch boatloads of tax protected funds being parked in offshore banks. So the money supply does not actually grow, but new investment is stimulated as those without can get loans. But the trick is on the general population as those who need such funding are paying larger margins than they should to borrow when the base rate is 0.5%.

Quite apart from these mechanisms of funding the destruction of existing retail businesses by competing with globalised companies means endemic unemployment. That alongside the enslavement of students by the charging of exorbitant fees to get a foot in the door of a career in an uncertain road, and you are witnessing the continuation of one of the most dangerous trends mankind has conceived. Economic racism.

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