Fascinating post here over HSBC’s profits and taxes.
As an email correspndent puts it, they’ve paid tax on the law as it is. He’s asking why they haven’t paid tax on the law as he thinks it should be.
The answer being that you’re not the Tax Dictator yet Ritchie.
But much, much better than that is his stupidity over unitary taxation and country by country reporting.
As you know, Murphmonster wants all companies to report where and how they make their money. So that taxes can be “properly” charged where the profit is made. And as you also know, MurphMuppett thinks we should have unitary taxation. Sod where the profits are made, let’s just apportion the tax where the income, staff and sales are. One third each.
Which gives us this:
Now, let’s look at that a different way. Let’s apply the unitary apportionment formula to group profits. From page 335 I know the company had 48,000 employees in the UK out of 270,000 in all.
And from page 40 of the media release I can get that $9,149 of income out of $68,330 was in the UK, whilst $18,391m of assets out of $79,935 were in the UK.
The classic unitary apportionment formula says that profit should be weighted to a country in proportion with one third of the weighting applying to income, assets and staff. So the maths is:
UK profit = $20,649/3 x ($9,149/$68,330) + $20,649/3 x ($18,391 / $79,935) + $20,649 x (48,000 / 270,000)
Now I make that $3,728 million of profit attributable to the UK on this basis. Tax on that would be $913 million. But $60 million was paid.
So, he’s got all the information he needs in the current set of accounts to work out how to apply his favoured unitary tax system.
Then he calls for:
The case for country-by-country reporting for banks is compelling.
Why? If we can already apportion a unitary tax with hte information we have then why do we need cbyc?
Which is where we come to the sad truth. Ritchie “invented” cbyc. So he says, even though it’s not true. And he’s heavily invested in cbyc as a result. He’s also bright enough, just, to see that everyone else (sorry, all other corporate tax weebs) is thinking about unitary as a solution to the problem. So he’s hitched to that wagon as well. But he’s still too dim to realise that if unitary then cbyc is irrelevant. For the tax system will no longer care where the profit is made so we don’t need accounts which show where it is. Because tax is simply apportioned under the unitary system.
That there are idiots out there is obvious. There’s nothing else that would explain the Labour Party. But puhleese, as the English that we are, couldn’t we please have a better class of idiots?