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EBay 'pays £1.2m in UK tax' on sales of £800m

bbc.co.uk

51–58 of 58 posts

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#51

I know this seems outrageous on the face of it, but I suspect the truth may be quite a bit more nuanced. There's not nearly enough detail here to know what's going on. Some possibilities that spring to mind: 1. They may have taken advantage of special tax credits offered by the government for activities that it was deemed to be in the best interest of society at large. 2. Ebay UK may have carry-forward losses from a…

What annoys me about articles like this is that people tend to get angry at the corporations.

What do you seriously expect them to do? They are entities that exist to maximize profit. The only time we should be angry at corporations is when they actually break the law.

When corporations are paying low taxes and doing so legally; it's politicians we should be angry at.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#52

Earlier quoted context omitted.

No, there is a third option that is looking increasingly credible: the UK could leave the EU altogether. Whatever the arguments for being in or out more generally, in financial terms that is almost certainly a win as things stand today, and it looks like any realistic outcome of the Euro problems will only strengthen the case.

I'm not sure about that, if the UK wants to continue trading with the EU from outside then they will be forced to pay for that privilege some way or another.

But the "Europe project" originally was about free trade. It worked pretty well for the most part, too: we managed with multilateral free trade agreements for years without things like legislative policy and currency getting centralised as well, and there are still alternative platforms for cooperation like the EFTA and EEA, which for example include some Scandinavian nations that are not part of the EU.

Given the UK's disproportionate strength, I don't see why it couldn't move to a similar relationship to what those Scandinavian nations have with Europe, being outside of the main EU and the Eurozone but still sharing common ground elsewhere. So until someone wiser about economics tells me otherwise, I think I stand by my previous position: whatever the pros and cons of being in the EU more generally, financially it's almost certainly in the UK's interest to leave.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#53

Earlier quoted context omitted.

On the other hand big corporations as well as wealthy people usually have more leverage in terms of being able to move and operate or reside in more tax-friendly or hospitable regimes. That's often claimed, but I'm not convinced. Some people/businesses might move away because of being forced to pay tax at the same rate as everyone else. Most people/businesses won't, because most people don't choose where to live only…

Businesses might not be able to choose so much where their market is, but they surely have a choice in where they set up manufacturing, R&D, corporate HQ etc etc. Countries constantly compete for business investment. Wealthy individuals are similar. They probably won't move their chosen country of residence for tax reasons, but I am pretty sure they will move their assets and investments to protect their value. Most…

Businesses might not be able to choose so much where their market is, but they surely have a choice in where they set up manufacturing, R&D, corporate HQ etc etc.

In which case surely the solution is to change the basis of taxation from profits to alternative sources such as sales or commercial property, which are inherently tied to the real location where things are happening, at least for bricks 'n' mortar businesses.

Taxing on-line transactions is trickier, but even in that case there are certain relatively broad international agreemeents covering things like VAT across Europe rather than in individual countries.

Most tax systems are inherently unfair with the middle-class and small business taking more than their fair share of the burden. The increasingly globalised and virtual nature of the economy only exacerbates this.

That is probably all true right now, but it doesn't mean we have to leave things that way. Speaking as someone who runs small businesses in the UK that pay their taxes at the normal rate, with those taxes ultimately reducing the money that reaches the owners, it really is galling to see reports of big international companies getting such favourable treatment.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#54
post #44
post #40

This is why consumption taxes are good - you can't get away from them. On the £3B of sales from Starbucks, they would have contributed at least £600M in consumption taxes (known as the VAT in the UK and at a rate of 20%). Getting rid of corporate taxes and increasing consumption taxes proportionately would be a good way around this, although as much as it makes sense, and it is a popular position amongst economist -…

consumption tax (like VAT, or GST in australia), unfairly taxes the poor as a percentage of their income. The gov't tries to fix this by having some categories of goods that are _not_ taxed (at least this is true in australia), to alleviate this problem, but its not quite perfect. I don't like consumption tax at all. However, i can't think of a way to levy that won't have loopeholes for the mega rich.

Consumption taxes are regressive, and arguably not so desirable for that reason. However, it's a lot easier to change the personal income tax system in one country to balance that effect for its own citizens than it is to change corporation taxes on profits that operate as a global market.

Having big players in that market win the game by bending the rules in ways most people can't, ultimately denying tax revenue to some nations so those nations have to increase taxes on smaller businesses and individuals, isn't exactly doing the poor in those nations any favours either.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#55
post #48
post #15

Earlier quoted context omitted.

Because that will probably impact certain politicians and other "important" stake holders who benefit from these tax laws as well. In my opinion, every democratic country should make the following change to their laws: Politicians cannot own, or have a stake in, any commercial enterprise. Needs to be a bit refined but you get the idea.

or put it more broadly - you should be able to acquire the financials of public servants. All of it, and if they have significant others like spouse or children, their financials are also considered public. And any stakes in any company will cause that company's financials to become public (whether its a privately held company or not). This way, there is a web of transparency so that any dodgy transactions will be de…

That may all be true, but it may also not be in the public interest to put off people who are smart enough to make a lot of money on their own and therefore independently wealthy enough not to be subject to unhealthy influences from entering public service.

Also, it would be blatantly illegal under our privacy laws to force that kind of disclosure for relations who aren't the ones making the choice but whose intimate financial details would suddenly become public, and rightly so IMHO.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#56
post #45

Earlier quoted context omitted.

That would be a problem, and it may be the case in the UK, I'm not familiar with their legal institutions, in the US the only people empowered to 'write' laws are elected legislators. Now some will say "Corporations elect legislators" except that isn't true at all, at least not in California. The only thing corporations and so called 'super pacs' can do is throw money at getting someone elected, and Meg Whitman prove…

Theres another side to the voter apathy story though, which you haven't fairly covered. The choice a voter makes can't just be arbituary (i.e., flip a coin to vote). If they are to make an informed decision, it will require investment in effort and time. The voters that are most apathetic are more likely to be poor, and won't have time to invest in such endeavours. Obviously, this perpetuates the problem, but the cau…

Perhaps, allow me to offer a counter argument. I claim that if the only criteria a voter uses in voting is "I like how your part of the government is working", vote the incumbent. If they don't like how its going, vote someone else. Very simple, no research, no time wasted at all. And absolutely effective.

The reason its effective is because elections in the US are very bias sensitive, the very small margins of victory for one candidate or another means that a small change in voter sympathy can change the outcome of the election. Further, by creating a selection criteria of 'like' / 'don't like' in the voter input, you set up a genetic algorithm for evolving government.

There a probably a couple of dozen 'evolution simulators' available on the web. They all work in the same way, they take a population of organisms, they exist for a while in an environment, and then they 'reproduce' with a selection bias. Over a few generations the selection bias results in a population that demonstrates the characteristic that the selection bias is targeted toward. The basic mechanism is that organisms that align with the selection bias 'win' (and thus reproduce) and those that don't align 'die.'

That algorithm doesn't care what the 'lifeform' is, and it always works. That is part of the reason it annoys folks who favor an intelligent design theory of evolution.

Elections are the 'reproduction' cycle of politicians. Their 'survival' depends on them managing the bias in their favor which they have a limited amount of power to do. If the current non-voting block of citizens jumped into the game and voted 'like'/'do not like' it would force government to 'evolve' a set of politicians that were doing a good job as defined by the people who vote.

Clearly this doesn't work when the government is rigging the elections (as Russia was accused of doing to counter unexpected voter turnout) but it certainly does in a fair election.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#57

Sigh, another story of "outrage" about how a company is legitimately avoiding taxation. Guess what, if you are an international company you can take advantage of the rules that the local politicians put in place. I ask people though what do they really want? Do they want Ebay to pay 45% in tax to the UK so 350M pounds of tax revenue from Ebay? Then the next complaint will be "Gee nobody does business in our country!"…

Do you really believe that if eBay had to pay higher taxes in the UK they would simply pull out, or that another company wouldn't fill the niche?

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#58

Earlier quoted context omitted.

I hear you, but to make your argument you have to define the term 'fair share'. If you take the working definition that 'fair share' is 'all legally owed taxes' then guess what, all these people are paying their 'fair share.' So do you see the problem? You have an internal definition of 'fair share' which is inconsistent with what the folks who govern the UK have codified as 'fair share.' Is that Ebay's problem? Or i…

To say that a 'fair share' is the taxes prescribed by the current laws is ridiculously circular. Of course it's the _intention_ of laws to be fair, but no one can claim with a straight face that the current loopholes are actually fair. It's quite obviously unfair because larger companies with more money get away with paying less. The problem with these loopholes is an international one; countries screw each other ove…

My claim is that the definition of 'fair share' is codified by the laws on taxation. If the people don't agree with that code they should change it. An example that was local to me was California changing their laws on taxation such that citizens buying from Amazon would not be able to avoid paying local sales tax. Amazon did however threaten to not sell to anyone in California (which is kind of a hollow threat since California is huge market). Californians now pay sales tax on their Amazon purchases.
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