Wednesday, 3 February 2016

grace and favour or sweetheart deal

Not just in the UK (whose crown dependencies prove haven and safe-harbour for this sort of arrangements) but for the tax-paying public all over the world the apparent pittance in levies that large corporations have paid in compared to revenue is inciting outrage. Because of the byzantine complexity of the situation and the fine distinction between avoidance and evasion, it is hard to say what exactly has transpired although there’s more than a hint of civic injustice and it seems as if corporate taxes are somewhat of a voluntary contribution—and not even the suggested donation when the collection-plate is passed down.
Of course, other methods of circumvention could be cooked up and it is not so straightforward to say where a product or service fulfilled its raison d’être of generating a profit—and what the public at large are privy to is necessarily mediated—but perhaps the whole corporate tax scheme as it exists, essentially hard to enforce and interrupt and by design encourages evasive manœuvres, and like proposals for a flat-tax or a Value-Added Tax (VAT) charged on the wealthy that excises a fixed percentage and eliminates loop-holes so far as deductions go, perhaps the same system would work for big businesses. The problem remains, I think, of sourcing earnings and different tax jurisdictions would walk on each others throats to claim a piece of it, but perhaps as lowering the burden is good for share-holders, a simpler and manifest tax regime might prove better for all stake-holders, corporate giants investing more in their own ecosystems (employees, research and host communities) in order to divest themselves of some fiduciary obligations.