Full of wonders it is:
There currently exists a loophole whereby businesses can offset this year\’s profits against last year\’s losses. This should stay for SMEs as they struggle through these difficult times, but the government have craftily neglected to tell us that the banks who returned to profit this year are exempt from paying taxes due to last year\’s losses. We would close this loophole for large companies.
It\’s not a loophole you ignorant tosspot. Companies are charged tax on their cumulative profits for a very good reason. For, when you start a new business adventure, either as a stand alone company or a new project within an extant one, you make losses for the first few years as you get it up and running. So, you only start paying profit taxes once you\’ve recouped the losses you made on starting the business.
Virgin Media and other telecoms businesses make rapid profits for minimum fuss. Their quick growth model gives nothing back. Too often, they make their profits from those who cannot show restraint when building up large telephone bills. Added to this they manage to avoid paying large amounts of corporation tax due to the use of various accounting practices. In GEER, we think get rich quick companies have a duty of care to the state. For this reason a telecoms tax is a good way of recouping some ill-gotten profits for the benefit of the nation at large.
What? So if you grow the company quickly, providing more jobs to people, providing services that the consumers want, thus you should pay more tax?
This GEER thing, this new \”left Labour think tank\”: is it actually any more than Eoin and his vaseline filled tube sock?
How old is Eoin Clarke? Twelve?
If you don’t allow companies to carry forward losses and offset them against future profits, then logically companies who happen to be consistently in profit pay less tax in proportion to their total revenue than companies that move in and out of profit.
So, by his scheme, get rich quick companies would be paying less tax proportionally than ones that get rich slow.
By the way, the link goes to something about employment.
Right, so Virgin Media has invested absolutely nothing in putting down their network?
Tosspots like eoin clarke really can’t understand capital intensive industries, the read only until the EBITDA margin row and then they start screaming about how terrible it all is…
Is Murphy involved in this?
Has this dimwit ever conversed with an adult?
Another screamer is item 7:
“7. Lastly, Dr Éoin Clarke has developed for some time now the idea of a Vice Tax. This would be a method of getting gambling companies, tobacco companies and large alcohol trading companies to commit to a £200m annual tax. A watchdog would be given powers to fine the companies if they were seen to be passing it on to the customer.”
How the industry as a whole can bear a £200m cost without ultimately and in the long term passing the cost onto the customer is a circus trick I’d sure pay good money to see. If he can show us how it’s done, he’s be a certainty for a Nobel prize.
Haha, don’t think Murphy is involved but it wouldn’t be a surprise if he was. I do know he is involved in this though, another piece of Murphism.
http://freemarketblogging.blogspot.com/2011/08/at-it-again.html
Freemarket.
Switzerland’s success is truly astonishing. You should add one factor to explain it: Europe’s most flexible labor market.
There was one small error in your piece. Switzerland actually had a civil war in the mid-19 century, named the “Sonderbund” or “Other Alliance” in which catholic cantons attempted to secede. Some argue that it was the last European religiously-inspired civil conflict before the Balkans’ deflagration.
Eoin is clearly a bloody idiot.
If an individual makes losses, shouldn’t he or she be allowed to offset those losses against profits, either in that year or later years? (and earlier years)
Of course the answer is yes, and there is no reason for a individual or group of individuals to be penalised purely because they are incorporated.
Adrian, the whole point of such a Social Purity Tax is that the companies can’t bear it and are forced to close, thus leading us into a Utopia where nobody has any fun, ever.
A vice tax, with progressive nutters deciding what is a ‘vice’. Hmmm. What could possibly go wrong?
Tracy W, excellent point.
That’s why the big and profitable companies actually prefer VAT to higher corporation tax. With VAT, a disproportionate share is paid by new, small and struggling businesses and it acts as a barrier to entry.
AFAIAA, Virgin bought up NTL/Telewest which had spent billions on digging up the payments and went bankrupt a couple of times before the money started rolling in.
Adrian, is that a spoof? Sin taxes like that already raise about £20,000 million a year in the UK.
Mark – Adrian was pointing out the problems with banning a sin tax from being passed onto customers. I understand that most current sin taxes are passed on to customers, and government press releases announcing an increase in those taxes tend to list this as a feature (“We are raising the tax on cigarettes so as to discourage smokingl”)
Tracy W, indeed. If this chappy says that cigarette manufacturers should bear the whole £5 sin-tax and VAT and sell twenty fags for production cost of £1 or £2, then that’s splendid news as far as I can see. Apart from the fact that they’ll stop selling cigarettes within about two and a half hours.
“Apart from the fact that they’ll stop selling cigarettes within about two and a half hours.”
Yes, that’s my point. If they can’t pass on this cost ultimately to customers, then the industry no longer is sustainable and will close down, probably sooner rather than later, as you suggest.
Smoking, gambling and drinking will still go on of course – just off the radar screen.
The thing that bugs me about this bloke, like Murphy, is the fantasy that companies (and government) have this tree at the bottom of the garden that grows money. If those greedy bastards can just hand over a few leaves from that tree, we’ll all be better off and nobody at the bottom of that garden will feel a thing.
Who is this Eoin Clarke? When I google the name, I just get a first year PhD student at Queens U Belfast (researching Irish women’s history). But that can’t be him, as the blog repeatedly calls it’s author Dr Clarke and a first year PhD student obviously isn’t a Dr yet.
Tim adds: Same one…..although I think the Queen’s entry is old.
That’ll be “its”, not “it’s”. I blame the I-phone for automatically inserting the apostrophe; and of course Western capitalism generally is ultimately to blame.
Following this post I idly clicked through to Eoin Clarke’s website, and my jaw dropped at the sheer quantity of foolishness expressed there. I was going to post a riposte, but where to start? Unusually for me, I’m speechless…
Virgin Media *is* NTL. NTL and Telewest both went bankrupt. Then NTL’s creditors took over the business (DEBT FOR EQUITY WIN), bought Telewest from its creditors, bought Virgin Mobile from Sir Richard along with the exclusive rights to use the Virgin name in UK telecoms, and changed the company’s legal name from NTL Inc to Virgin Media Inc (don’t even ask why it’s a Delaware company – Can Of Worms).
There’s room for legitimate questions on how much of the tax losses of its assorted bankrupt forerunners VMI should be entitled to (after all, it didn’t build anything, and its current owners were secured creditors at the time it was built, rather than investors).
Of course, that doesn’t stop Eoin’s proposal to remove all loss allowances for large companies from being utterly stupid.