back to article Big Tech on the hook for billions in back taxes after US Supreme Court rejects Altera stock options case hearing

Google, Apple, Facebook, Amazon and a host of other tech giants will have to pay billions of dollars in extra tax after the Supreme Court refused to hear an appeal on a stock-option case. America's top court said [PDF] on Monday it will not review a decision by the Ninth Circuit of Appeals that stock-based compensation should …

  1. Chris G Silver badge

    Big Tech has been getting away with stashing their taxes for long enough, it's about time they paid some more taxes.

    I am waiting to see what happens when the European rules get tightened up and Trumps isolates America a bit more with another lot of sanctions, they make their money here they can pay some tax here.

    1. Anonymous Coward
      Anonymous Coward

      just a reminder

      The money that companies use to pay taxes is money that they've taken from you. If you raise their taxes, they will raise their prices to cover.

      1. DavCrav Silver badge

        Re: just a reminder

        "If you raise their taxes, they will raise their prices to cover."

        No. They will hopefully lose market share to local companies who have to pay their fucking tax.

        1. big_D Silver badge
          Pint

          Re: just a reminder

          Hear, hear! Have a locally brewed pint.

        2. wjake
          Unhappy

          Re: just a reminder

          Yes, let me log in to my neighborhood group instead of Facebook, shop at the local grocer (whoops! closed due to covid!) instead of Walmazon, visit my local video rental shop (huh?) instead of Netflix, run FOSS instead of Microsoft.

          You're thinking like a Reg reader instead of an average consumer, you and I both know this isn't going to happen on any large scale.

        3. LucreLout Silver badge

          Re: just a reminder

          They will hopefully lose market share to local companies who have to pay their fucking tax.

          Local companies don't have to pay their tax. My local coffee shop is based in the Bahamas for tax purposes and its a single instance business, not a chain.

          The only actual answer to raising taxes is to make it desirable to pay them, which means they have to be transparent, low, and unavoidable. Corporate taxes are and will always be easy to avoid. PAYE is less easy to avoid unless, again, you incorporate which is why contractors do so.

          Taxes on utility bills are avoidable if its worth while enough, taxes on dividends are easily avoidable, capital gains tax is easily avoidable, and so it goes. Wealth taxes are the easiest of all to avoid.

          Taxes that are harder to avoid but are to some extent reducible are VAT (spending less only gets you so far), property (there's only so small you'll make your house to avoid taxes on it), and transport (you can drive fewer miles to a point).

          At over 40% of GDP, the state already consumes as much of the economy as can be obtained, and far more than is advisable if you actually want to spend money on public services. The more money left on the table for the private sector, the quicker and larger it will grow your economy, and the greater number of pounds will be had from tax revenues. We're too far around the Laffer curve to gain anything by raising taxes at this point - so the state will have to live on a budget, because its income is now effectively fixed; it can't rise until the economy grows and the economy can't grow if it tries to take more in taxes.

          You can't tax your way into prosperity, no matter how hard you try or how upset that makes you feel.

          1. vishal vashisht

            Re: just a reminder

            you realise that the Laffer curve has been rubbished by most economists, only the neocons still refer to it and even Laffer himself is reported to have disowned it.

            You'd think Britain made nothing in the 50s/60s/70s and we were only sat around scratching our asses.

            Sweden, Norway,Finland, in fact MANY other countries have much higher tax rates and have amazing innovation. Nokia was doing perfectly well until they started to follow Anglo Saxon company practices and the Americans got involved

            1. Lars Silver badge
              Coat

              Re: just a reminder

              "Sweden, Norway,Finland, in fact MANY other countries"

              It all depends on how that money is invested, countries who do not understand to invest in education will always have problems. I think the Americans used to understand it years ago, I am not sure about the English, the class society it still is.

              And now we have Americans boosting about their low taxation while at the same time have huge debt's in both education and healthcare.

              Also democracy works better when less people fall for shenanigans and snake oil salesmen. Damned disturbing and hard to understand.

            2. LucreLout Silver badge

              Re: just a reminder

              the Laffer curve has been rubbished by most economists

              Most left-wing economists, yes. But then the left wing are to economics what astrology is to astronomy.

              You'd think Britain made nothing in the 50s/60s/70s and we were only sat around scratching our asses.

              For the 70s I'd be right - Sick man of Europe, remember? British disease, remember? Dead unburried etc etc

              Sweden, Norway,Finland, in fact MANY other countries have much higher tax rates and have amazing innovation.

              No, they don't. Tax as a percentage of GDP:

              43.9% in Sweden

              39.0% in Norway

              42.7% in Finland

              33.5% in UK

              So about 10 to 30% in your very carefully chosen examples of very small nations with very high tax rates. There's plenty of failed states with much higher taxes such as Algeria on 64% or Afghanistan on 60%.

              So lets have a look at a list of successful innovative countries with lower tax rates shall we:

              Canada 31.7%

              Australia on 28.5%

              Switzerland on 27.8%

              China on 20.1%

              Singapore on 14.2%

              UAE on 1.4%

              So using your logic all you have proven is that raising taxes will turn us into Afghanistan, and cutting taxes could turn us into Dubai, or Singapore, or Canada, or Australia. That and that low taxes scale up in terms of economic size but high taxes do not.

              Perhaps next time think through what you want to say and why before posting, because your view is clearly not based upon the facts you're hoping might support it.

              One thing in common across all of the successful countries in my list or yours is that the tax burden is shared much more equally across society rather than being heavily reliant upon just 300,000 people out of over 60 million.

          2. elsergiovolador

            Re: just a reminder

            People don't incorporate to avoid PAYE - but that could have been the case many years ago. This mechanism is not flexible enough to be used in a situation typical contractor is in though. The combination of Dividend tax and corporation tax is on par with PAYE actually for quite some time now.

      2. batfink Silver badge

        Re: just a reminder

        In a proper capitalist system, that would mean they become uncompetitive. Unfortunately we have monopoly situations.

        So the alternative is that they could take a decrease in profit. Oh no!!!!!

      3. vishal vashisht

        Re: just a reminder

        What Facebook? Google ? They're going to charge me more? doubt it.

        As for Apple, Netflix, etc ,etc that I AM paying for, I'm ALREADY paying to cover their taxes by MINE being used to subsidise them with reduced services & higher taxes on my income to cover the billions lost through their shenanigans.

        Each time the chancellor goes on about having to pay your way, remember YOU are paying YOUR taxes to subsidise the money lost, not only by the tech firms, but Starbucks, Phillip Green, Virgin etc. The leeches on society that take, take, take, drive legitimate businesses bankrupt & then turn around screaming for Government help because even though they shipped out all this cash, they haven't saved it for a rainy day like we, the plebs are supposed to.

        Tax the fuckers till they squeal, then tax them some more. I'll quite happily switch to using whatever alternative Cloud and other stuff the French and Germans are building.

      4. Anonymous Coward
        Anonymous Coward

        Re: just a reminder

        Time and time again, companies faced with some charge say "We'll have to raise prices. It will hit the consumers"

        If they were able to raise their prices without detriment, they'd do it already.

        Companies aren't charitues. They don't charge what is "fair" - they charge to maximise profits - they balance higher prices versus reduced sales to find the charge that hits the sweet spot.

        External costs don't change that - they just affect the companies profits.

    2. Anonymous Coward
      Anonymous Coward

      > they make their money here they can pay some tax here

      Depends how you look at it. I work in the UK for one of these companies, and the UK gets all the tax on my income, NI, VAT, council tax etc. The US gets tax on the stock grants - the company is listed on a US stock exchange, so that seems only fair (the case seems to have been about Altera hiding stock-related tax that should have been paid in the US because that is where the stock transactions occur).

      Personally I like the Irish model, i.e. keep corporate taxes low so that companies benefit from setting up local operations with high-value jobs - the kind of jobs that attract high income taxes. Then the money goes into the local economy via payroll taxes which are very hard for anyone to get around. Company profits are very much less than what is paid in staff salaries, so the tax take on a % of profits is less than a % of staffing costs.

      Taxing profits tends to make companies use the money internally - by growing - rather than paying out dividends. Encouraging businesses to grow is good up to the point where they can no longer grow their market, but must attack the business of other companies (and thereby put other people's jobs at risk).

      1. DavCrav Silver badge

        "Personally I like the Irish model, i.e. keep corporate taxes low so that companies benefit from setting up local operations with high-value jobs - the kind of jobs that attract high income taxes. Then the money goes into the local economy via payroll taxes which are very hard for anyone to get around. Company profits are very much less than what is paid in staff salaries, so the tax take on a % of profits is less than a % of staffing costs."

        I downvoted you because you are essentially saying

        "Personally I like the parasite model. Drive direct taxxes to companies as low as possible to they move to low-tax jurisdictions, taking both jobs and tax money from other countries."

        Of course, that's a stupid argument because it leads to an arms race and then the only winners are corporations and their shareholders. Everybody else loses. Fuck The Other Guy is a game that works if you only play once, but in the long run it doesn't. The Irish model is despised by all of the countries that it's fucked over.

        1. Doctor Syntax Silver badge

          "the only winners are corporations and their shareholders"

          The winners also include the countries small enough to take advantage of the open market in taxation of multinational corporations.

          1. Anonymous Coward
            Anonymous Coward

            "The winners also include the countries small enough to take advantage of the open market in taxation of multinational corporations."

            And the big countries that are disadvantaged by the bait and switch?

            We regularly see commentards bemoaning the lack of tax paid by big companies when they do this.

            Often ignoring the benefits we (the UK) gain from UK companies doing exactly the same thing

        2. DishonestQuill

          For the record, it is also hated by most Irish people as well, especially Dubliner's because of the affect it has had on rent.

          Me salty about my rent? No, not at all.

      2. Doctor Syntax Silver badge

        "Personally I like the Irish model"

        The Irish model is dependant on having a relatively small population and local economy. By bringing in multi-nationals a low tax rate on their turnover is large in relation to what the country would otherwise earn and the local businesses also benefit from a low corporation tax rate. Whilst you may personally like the Irish model it's not a model that's universally applicable.

        1. Julz Silver badge

          It is the same as Monte Carlo opening a casino in the 1800's so suckers patrons could travel there and be parted from their money, enriching the country. Only works if your small and the country's around you cooperate by providing you with a unique market. In this case keeping gambling illegal.

        2. LucreLout Silver badge

          The Irish model is dependant on having a relatively small population and local economy.

          No it isn't.

          A decade ago global corporate profitability was $7.2 trillion. Its very probably double that in 2019. See the McKinsey report for details - I can't give you a link as its on our intranet.

          Taking just 1% of that in tax would give an income of 72,000,000,000 to 144,000,000,000 USD. The UK's entire tax take is about £600 Billion. If the UK was competitive enough to earn just 0.5-1% of corporate profits that would be the only tax anyone would ever need to pay.

          Corporation taxes are a bit like drugs in sport, once one person gets competitive about them, everyone has to do the same or they simply lose out. Ideological objections add no value, because they amount to saying "We've given up competing so we're all happy to pay much more taxes than we need to".

          I'm fine with people saying "Lets not compete on corporation taxes" provided they also agree that they should pick up the tab. If you're looking at me to take up the slack then we have to compete for global revenues because there's only so much the higher earners can manage and we're already shouldering a massively disproportionate share of the burden.

          The top 1% of income tax payers pay almost 30% of income taxes. You need only 300,000 people to move abroad or decide the stress and hours aren't worth it, and you have a funding black hole you can't fill. That's about 8% of the total UK tax take from just 300,000 people, plus whatever other taxes they pay. They don't even need to retire or move, they could just incorporate and disco, the tax disappears. The burden of taxation is dangerously overbalanced on far too few people and far too few companies - it's a massive operation risk with no possible plan B.

          1. Doctor Syntax Silver badge

            "A decade ago global corporate profitability was $7.2 trillion"

            Yes but countries are dealing with individual businesses. For a country with the UK's size of economy (as of a few months ago) one or two wouldn't be enough and it's still within the scope of Ireland, Luxembourg etc. to under-cut the UK although the fear has been expressed by other coutnries that the UK could try such a tactic post-Brexit. There's also a concern, of course, that the post-Brexit UK economy could be small enough to make it worthwhile.

            1. LucreLout Silver badge

              For a country with the UK's size of economy (as of a few months ago) one or two wouldn't be enough and it's still within the scope of Ireland, Luxembourg etc.

              We could go all the way to zero and just tax dividends and capital gains. We'd make far far more revenue as companies the world over headquartered here and required the use of expensive professionals to organise their accounts and comply with local regulations.

              fear has been expressed by other coutnries that the UK could try such a tactic post-Brexit

              In the event of a no deal exit at the end of the year, they'd be absolutely right. We couldn't simply sit back while the rEU tries to conquer us, despite committing to a deal before Brexit and now denying a common trade deal, we'd have to fight fire with fire and moving their companies here then taxing EURO denominated currency trades would sort that out in a flash.

              Don't get me wrong, I'd prefer a deal, but we're not here to be punished by a smaller Europe, we're here for a fair trade agreement as equal partners. England doesn't fight to lose, and we'd prefer not to fight at all, but its up to the rEU to decide what they want to do - right now they're frothing at the mouth and spoiling for a fight so that's what they'll get. No tears.

              1. Lars Silver badge
                Happy

                @LucreLout

                You are still living in the brexiteer fantasy world.

                https://www.youtube.com/watch?v=Y0cgTYkN9bs

                1. Anonymous Coward
                  Anonymous Coward

                  Yes, Japan said at the time that they made the EU deal that sure, they'd be happy to make a deal with a non-EU UK, but of course, the UK would be silly to expect as good a deal as the EU got.

                  The spokesman said it half jokingly, as if he's saying it's obvious that the UK wouldn't expect to get such a sweet deal - he obviously doesn't know the dilusional arrogance of our little englanders.

              2. Anonymous Coward
                Anonymous Coward

                Boris has gone back on what he agreed previously with the EU.

                It's HIM who's moved the goalposts, not the EU.

                Oh, and the EU isn't trying to conquer us, or punish us. That's typical brexitter paranoia, straight from the tabloids.

                At least you admit "England";s arrogance. "Equal" partners? Nowhere near.

                Brexitters want all the perks of being in the club without any of the commitments.

                You are in for a shock. In 10 years time, we'll be back in the EU, and using the Euro - and that will all be due to the arrogant little englander brexiters.

                By the way, the Bank of America currency analysts have just released this report:

                Pound sterling as unstable as developing country currency due to Brexit, say analysts

                ‘We believe sterling is in the process of evolving into a currency that resembles the underlying reality of the British economy: small and shrinking,’ say Bank of America currency analysts

                The pound sterling has behaved more like the volatile currency of a developing country over the past four years since the Brexit referendum vote, according to an analysis by foreign exchange traders.

                Since the Brexit vote on 23 June 2016 the pound has suffered a record fall against the dollar, a rapid gain and then another precipitous slide to its weakest level in 35 years.

                https://www.ft.com/content/4fd04fd9-7209-4b7c-97a1-97466f226159

                The pound is now an emerging-market currency in all but name, according to analysts at Bank of America, who say that Brexit has turned it into a mirror of the “small and shrinking” UK economy.

                1. LucreLout Silver badge

                  You are in for a shock. In 10 years time, we'll be back in the EU, and using the Euro - and that will all be due to the arrogant little englander brexiters.

                  10/10 for trolling, 0/10 for accuracy. There won't be an EU to be part of 10 years from now. At best its 50/50 if they make it through next year.

                  At least you admit "England";s arrogance. "Equal" partners? Nowhere near.

                  I'm sorry, but if you think Scotland or Wales are England's equal then you're positively delusional. If you think the failing and shrinking rEU is going to stop shrinking in terms of global relevance then I have a bridge you may buy.

                  There's no guarantee the UK's future will be bigger than its past, but we can 100% guarantee that if we remained in the rEU it would have been significantly smaller. The rEU is less and less relevant on the world stage in terms of economics - its share of global GDP has been dropping off a cliff for the past 2 decades. Von der Lyin' and the demented Belgian are no part of solving that, nor is the deluded Frenchman capable yet of grasping that the money tap is turned off. It won't be long before they have more presidents than members..... Is it 5 now, or do they have 6.... its all just so forgettable.

                  And yet still, still 4 years on from the vote, no remainer has been able to give one single good reason to be part of it. Not one. They lost every economic argument years ago, so there's only the social side left, and for 99% of the population that was always irrelevant to their lives.

                  1. Anonymous Coward
                    Anonymous Coward

                    I think you're a troll.

                    Otherwise, you're getting seriously confused. Remainers have given many many good arguments for staying. There has been no good argument for leaving. Not one leaver has made one, well apart from those who bankrolled it.... Less protections for the workers... No tax loophole fixes, shorting a failing economy etc. Hell even the strongly held racist argument isn't based on facts.

                    Note the people banking brexit for the tax breaks have been caught buying EU citizenship in Cyprus.

                    Sterling is collpasing as a global currency due to brexit. https://www.internationalinvestment.net/news/4016971/sterling-emerging-market-currency-bank-america

                    The EU is seen as an economic threat by Russia and the USA. Only a fool thinks we are stronger outside the biggest trading block in the world.

                    Japan will never give us a deal like the one the EU has. Nor will anyone else. Economics 101

                    Who the hell mentioned Scotland/NI/Wales? You're the one who said that England was equal in power to the EU. That's what I was laughing at.

                    Anway, Scotland will leave the UK, followed by Ireland, and the Wales.

                    England will be the last to rejoin the EU, but they will.

                    In the meantime, welcome to your chlorinated chicken!

                    1. LucreLout Silver badge

                      Remainers have given many many good arguments for staying.

                      Name one then!

                      The economic arguments advanced byt he various remain campaigns have been rubbished both by all credible economists and by factual experienced reality every year since.

                      There has been no good argument for leaving.

                      If you ignore for a moment all of the economic benefits of leaving, then for a starter you would have:

                      Freedom from the ECJ's willful misinterpretation of the ECHR to allow terrorists to fight deportation for decades while inciting murder on our streets.

                      Ability to sign our own trade deals (7 years to do a deal with Canada - 7 years!!)

                      I'll stop there for now as its clear to all you don't have an argument on these grounds

                      Less protections for the workers.

                      And yet every single major protection enjoyed by workers was already in place before we joined the rEU, and nobody has proposed changing the legislation much less actually set out to do it. You're making stuff up or regurgitating propaganda spoon fed you by your union rep.

                      No tax loophole fixes

                      The rEU is WHY so many tax loopholes exist. I work in a division dedicated in its entirety to industrial scale tax avoidance and I can tell you for an absolute certainty that leaving or remaining will have flat dead zero impact on our business. We will have to restructure a few trades because we're leaving and that makes it marginally harder to avoid taxes than remaining in, but the effort on that has already been done.

                      Hell even the strongly held racist argument isn't based on facts.

                      Yes it is. Remainers are racists who seek to prioritise the access of white people to our economy over those of a darker skin colour. Leavers want to trade with the whole of the world, not just little europe.

                      The EU is seen as an economic threat by Russia and the USA.

                      No it isn't. The EU is seen as a joke by Russia hence their annexation of the part of it not in NATO. The USA are far more focused on the challenge of competing with China and the rest of Asia than old europe which is economically less relevant every year.

                      Japan will never give us a deal like the one the EU has. Nor will anyone else. Economics 101

                      Dreaming I see. Go do economics 101 and report back.

                      You're the one who said that England was equal in power to the EU. That's what I was laughing at.

                      I was being kind and assuming you'd not be so deluded as to consider the rEU our equals. The whole think is a ticking bomb ready to explode. It won't be here 10 years from now, not in anything like its current form.

                      Anway, Scotland will leave the UK, followed by Ireland, and the Wales.

                      No they won't. Scotland can't afford to leave the UK, they'd be bankrupt in less time than it takes you to tie your shoelaces.

                      England will be the last to rejoin the EU, but they will.

                      There's not going to be an EU to rejoin. It's over. The whole world is laughing at you and you still don't see it.... frightened little europhiles. You're a joke. Without google I can pretty much guarantee that you, like 99% of remainers, can't even name all the rEU presidents much less state in a nutshell what they do.

                      You want to remain only because you're frightened of change. Its why you've STILL not been able to think up a real world reason to remain after 4 years of trying. You lost the argument, then you lost the referendum, then you lost a couple of elections, and another vote, and still you don't see that you're on the wrong side of history. The future is laughing at you.

          2. DavCrav Silver badge

            "Taking just 1% of that in tax would give an income of 72,000,000,000 to 144,000,000,000 USD. The UK's entire tax take is about £600 Billion. If the UK was competitive enough to earn just 0.5-1% of corporate profits that would be the only tax anyone would ever need to pay."

            It looks like you have messed up with your zeroes, so let's do it properly. Assume global corporate profits of $10trn, as you suggest. Then 1% of that is $0.1trn, about £80bn, roughly (order of magnitude) a tenth of the tax take of the UK. The UK is about 3% of world GDP though, so if we share corporate profits out equally (this is a massive simplification) the portion attached to the UK would be around £240bn. So you would need to tax at about 200% of corporate profit for this to work.

            This assumes that UK companies make profits at the same rate as all other countries' companies (not true) and that companies don't move their money around to avoid tax (very not true).

          3. juice Silver badge

            > The top 1% of income tax payers pay almost 30% of income taxes. You need only 300,000 people to move abroad or decide the stress and hours aren't worth it, and you have a funding black hole you can't fill. That's about 8% of the total UK tax take from just 300,000 people, plus whatever other taxes they pay. They don't even need to retire or move, they could just incorporate and disco, the tax disappears. The burden of taxation is dangerously overbalanced on far too few people and far too few companies - it's a massive operation risk with no possible plan B.

            On the other hand, a very small delta change (e.g. a 1% income tax rise) would have very little direct impact on those earners, and result in significant extra revenue for the country.

            As part of the process to deal with the Great Depression, and then the cost of WW2, the USA raised income tax for top-earners [*], and kept them high for over 50 years.

            E.g

            1932: 63%

            1944: 94%

            1964: 77%

            1965: 70%

            1982: 50%

            Admittedly, it sounds like accountants were able to chop this down to an effective top-bracket tax rate of 70%, but this doesn't really seem to have affected the USA's economic growth - the 50s and 60s are generally viewed to be the "golden years" for the USA - or led to rich people fleeing the country.

            Further musings about how much more money could potentially flow around the economy - and thereby come back to the government as taxes - if it wasn't all tied up in "top earner" offshore bank accounts is left as an exercise for the reader...

            [*] https://en.wikipedia.org/wiki/History_of_taxation_in_the_United_States#:~:text=In%201932%20the%20top%20marginal,withholding%20and%20quarterly%20tax%20payments.

            1. LucreLout Silver badge

              On the other hand, a very small delta change (e.g. a 1% income tax rise) would have very little direct impact on those earners, and result in significant extra revenue for the country.

              It'd raise nothing. You're assuming we won't just avoid it, when it should be obvious by now that we would. Further, there comes a point beyond which avoidance ceases to be retail level and starts to move more towards the professional end of the spectrum where it costs money to avoid the taxes, but less money than paying them (where my division operates). When people move to that end of the spectrum you end up losing most of the taxes they were paying already all for that greedy extra cut.

              Let me give you a very simple example of why cutting taxes works. Do away with the tax free earnings withdrawal, and instead of getting 67% of nothing, you'd be getting 40% of another £25k. Nobody is going to pay it, we just avoid it by working less (buying more holidays from the company, exploitation of the cycle to work scheme, working fewer hours or days etc etc).

              I'm running out of road for avoiding the taxes we have because I've maxed out the retail end of avoidance and am verging on requiring professional structuring - my current tax rate is around the low 30's and my projected tax rate with professional advice would be around 7% with another 20% lost in fees. It's not worth it right now but another turn of the screw and it will be. I'll make money from it but the state will lose over £30k in taxes annually. Alternatively I can get into the more gambling end of retail avoidance with SEIS, VCTs and EIS schemes, but unless you live in that world (and I don't) then it can be cheaper to just pay a tax pro.

              1. juice Silver badge

                > It'd raise nothing. You're assuming we won't just avoid it, when it should be obvious by now that we would

                I think you missed the point. The USA had an income tax rate of over 50% for top-earners for over fifty years - and it was over 70% for twenty of those years.

                And that period just so happened to be one of the best periods of economic and social growth for the USA. And I've not heard of any enclaves of American ex-pats, who sit around bemoaning about how they had to move out of the country because of the high taxes.

                Nor have I heard of any significant numbers of rich people fleeing other countries which have a higher income tax rate than the UK.

                In fact, many of the countries with higher income tax rates (e.g. Ireland, Germany, Slovenia, Israel, France, Sweden, etc) are generally considered to be highly prosperous and to have an overall better quality of life than countries with lower income tax rates.

                It's almost as if paying taxes helps to maintain and build the country's infrastructure, and therefore create more opportunities for wealth generation...

                > Let me give you a very simple example of why cutting taxes works. Do away with the tax free earnings withdrawal, and instead of getting 67% of nothing, you'd be getting 40% of another £25k.

                So... cutting taxes by introducing a new tax? Either way, I don't know enough about taxes to know whether that would be a viable approach, or whether that'd just push people into using a different mechanism to avoid the tax. I'm generally inclined towards the latter, but that could just be because I'm cynical ;)

                Sad to say, the empirical evidence to date indicates that if you cut taxes for rich people or corporations, that money just gets salted away and doesn't come back into the economy.

                E.g.

                The tax holiday for US companies bringing cash back into the country - https://taxfoundation.org/repatriation-tax-holiday-hangover/

                "Trickle down" tax cuts - https://www.theguardian.com/business/2012/jul/21/offshore-wealth-global-economy-tax-havens

                Reducing costly regulations to "enable" job growth, only to find the jobs were cut anyway, and the "saved" money ploughed into stock buybacks - https://arstechnica.com/information-technology/2020/01/att-slashed-billions-from-network-spending-cut-tens-of-thousands-of-jobs/

                And so on. I could try and dig out some British samples, but the USA does tend to provide bigger examples!

                Money handed to the rich stays with the rich. Money distributed further down the chain goes back into the economy and helps to spur growth.

                > my current tax rate is around the low 30's and my projected tax rate with professional advice would be around 7% with another 20% lost in fees ... the state will lose over £30k in taxes annually

                That suggests that £30k is around 5% of your annual income, which in turn implies that you're earning around £600k per year and paying around £200k per year in taxes while having around £400k - or over £1000 per day - to spend on your lifestyle.

                And without wanting to sound like I'm trying to be negative or score points, I genuinely do have a question: does your lifestyle actually needs that extra £30k in annual income, or is this all purely a matter of principle?

                1. LucreLout Silver badge

                  I think you missed the point. The USA had an income tax rate of over 50% for top-earners for over fifty years - and it was over 70% for twenty of those years.

                  One of us is, yes, but it isn't me.

                  You can have a tax rate of 100% if you like, but if nobody is paying it then you're not raising any revenue.

                  The entire offshore tax avoidance industry ballooned during the years of sky high tax rates in America and the UK, with the result that an awful lot less tax was raised than would have been the case with lower rates.

                  And that period just so happened to be one of the best periods of economic and social growth for the USA.

                  You're overlooking the end of two critical events World Wars 1 and 2 which is leading you to completely misunderstand the data and its meaning.

                  Nor have I heard of any significant numbers of rich people fleeing other countries which have a higher income tax rate than the UK.

                  As I've explained before, the people don't flee, their wealth does.

                  In fact, many of the countries with higher income tax rates (e.g. Ireland, Germany, Slovenia, Israel, France, Sweden, etc) are generally considered to be highly prosperous and to have an overall better quality of life than countries with lower income tax rates.

                  Same rubbish as elsewhere in the thread and already dispensed with in some detail. You;re wrong, your world view is wrong, and you understand nothing whatsoever about taxation.

                  It's almost as if paying taxes helps to maintain and build the country's infrastructure, and therefore create more opportunities for wealth generation...

                  We spend vastly greater sums on non-jobs like diversity co-ordinator and administrators than we do on infrastructure. It's almost like you don't understand anything about how the economy works.....

                  I don't know enough about taxes

                  I agree, you don't. Which rather begs the question on why you hold so strongly on to such batshit crazy views as you express here. Maybe go and learn a few things first then form opinions based on that rather than whatever emotion feels good at the time, yes?

                  Money handed to the rich stays with the rich. Money distributed further down the chain goes back into the economy and helps to spur growth.

                  Wrong on both accounts, so lets add some economics to your reading list right after taxation.

                  > my current tax rate is around the low 30's and my projected tax rate with professional advice would be around 7% with another 20% lost in fees ... the state will lose over £30k in taxes annually

                  That suggests that £30k is around 5% of your annual income, which in turn implies that you're earning around £600k per year and paying around £200k per year in taxes while having around £400k - or over £1000 per day - to spend on your lifestyle.

                  You're going to need to add mathematics to that reading list right after taxes and economics, and hell, lets put critical thinking right into the fourth slot shall we?

                  What it implies is that in attempting to take another 1% in taxes the state would lose 25-27% of my tax rate or about 75% of the tax it takes right now. I would then lose a further 20% of my earnings in fees for an overall dead weight cost of 27% vs the 43% target rate you'd have been aiming at by increasing higher rate tax by 1%.

                  And without wanting to sound like I'm trying to be negative or score points, I genuinely do have a question: does your lifestyle actually needs that extra £30k in annual income, or is this all purely a matter of principle?

                  There's two separate issues at play here. Firstly and most importantly is the matter of principle. I can see no morale case to continue paying extortionate sums to the tax man every day when I see the money wasted hand over fist on jobs that don't need doing, and paying for people to live broken lives on welfare, or for others that could put a lot more effort into their working lives but simply choose not to do so. Penalizing those of us that made and make sacrifices to become successful to prop up those that could have done the same but chose not to is extremely unethical.

                  Secondly, my income is tied to my profession. I get access to a money purchase plan where I can contribute up to 40k per year maximum and save no more than £1.2M in total. Now, that's exposed to stock market risk, and many plans just lost 40% of their total worth between february and april. It would produce a maximum income of around £36k per annum, and requires a hell of a lot of saving to get there and you'd need to be in a senior pay grade to make it. Oh, and the government keep delaying what age you can take it so now I have to work another 8 years over when I started the plan, and that's likely to rise too.

                  Contrast that with basically any teacher whose pension will paste that, risk free, for a part time job with 3+ months holiday, and early retirement options that see them done by the time they're 50-55. Or any council or hospital head or judge or head of department whose pensions in payment are several magnitudes of that, gold plated virtually non-contributory, and totally risk free.

                  So what do people do, well, much of BTL property investment is attempting to produce an annuity like income stream (the rent) that you can take when you're ready to retire, not when some spiv in the the civil service decides you get to retire while he's still planning to go in his early 50s.

                  And you think tax avoidance is an ethical problem? No, tax avoidance is a bloody economic necessity for most of us in the private sector. To see nothing of the morally reprehensible system rigged in favour of public sector workers to the detriment of the rest of us.

                  1. crayon

                    "To see nothing of the morally reprehensible system rigged in favour of public sector workers to the detriment of the rest of us."

                    Public sector workers provide public services. Without them you would be paying a lot more for privately provided services (private providers may initially be cheaper, but after a few rounds of buyouts and mergers you'll most likely end up with a duopoly in most sectors (to give the illusion of competition) - and we all know what happens when companies don't have to compete for business.

                    1. LucreLout Silver badge

                      Public sector workers provide public services.

                      That places no requirement on us to massively over pay their pensions.

                      Without them you would be paying a lot more for privately provided services

                      Not remotely accurate. Private medical care is much cheaper than the NHS and so much more effective. As is private ASU insurance, and a private pension. Thus we could dispense with everything purported to be covered by NI in one stroke.

                      Private education is still operating whereas state education is on a nice gap year for the teachers, and thus incomparable.

                      The vast array of public services that are outsourced would be much cheaper to contract directly (think bins etc) as we'd not be paying the massive overhead for all the administrative ball gazers, or tax collectors to make that work.

                      The only areas of public service that are actually cheaper to provide in bulk via nationalised configurations are infrastructure investment * management, and the military. So about 1/10th of actual public spending. Most of the rest is waste and inefficiency.

                      Without them I'd be paying less tax and less money for better service provision because the focus of the public sector is primarily as a means of income provision for public servants rather than a means of provision of services to the public. It's rotten to the core.

                      1. Glen 1 Silver badge
                        Paris Hilton

                        "Private medical care is much cheaper than the NHS"

                        The amount spent in the US would suggest that isnt true. The US *Tax payer* pays more per head than we do for the whole NHS, and they still need private insurance *on top* of that. Link

                        Any local difference in price for private care is going to be down to UK insurers/providers needing to compete with the "free at point of use" NHS.

                        " paying for people to live broken lives on welfare"

                        "If they would rather die," said Scrooge, "they had better do it, and decrease the surplus population."

                        I mean, we could go through your delusions one by one, and your "La-la-la-me-no-listening have a logical fallacy with no sources" replies when presented with counterpoints, but I will just deal with the biggest one.

                        The delusion that rEU is the UKs equal. Germany *ON ITS OWN* has a big enough economy that we would be the junior partner in any trade deal. That you hold onto the delusion that the UK can go to-to-toe with the EU - an economy that is the second largest in the world and a GDP over 4.5 times the UK.... your grip on reality is tentative at best. Link including GDP table

                        Everything else is you just saying "here are some idiots who agree with me" without siting any sources - as if that is some kind of appeal to authority.

                        We're not going to convince you. Trying to bring facts and reality to the table just causes you to dismiss it as remainer propaganda, or a lefty conspiracy theory. Fortunately reality doesn't give a shit about your delusions. Unfortunately voters are easily duped.

                        How much cognitive dissonance must the U.S. right-wing have to go through to still be convinced Trump is the right guy?

                        Just out of interest, what would it take to convince you you were wrong?

                        1. LucreLout Silver badge

                          Just out of interest, what would it take to convince you you were wrong?

                          Well, after 4 years, hows about a single real world reason why anyone would want to remain in the rEU?

                          There are no economic arguments you can advance because you lost them years ago, so give us just one actual reason to want to remain. One tangible benefit to most peoples lives. In 4 years of asking, no remainer has ever been able to come up with one, so go ahead, break the mould. Have an actual reason that you want to remain that isn't based on being a frieghtened little racist europhile, and we can take it from there.

                          You won't have a reason though, remainers never do....

                          1. Glen 1 Silver badge

                            You have already been given several reasons by other commenters, you just ignore them or dismiss them without actually refuting them, Thus my comment about "La-la-la-not-listening". Its like talking to flat earther. Whats the point in engaging with someone who cant form a cogent counter argument?

                            At least CodeJunky actually makes points. You just sound like General Melchet, eager to send the boys over the top. Ignorant to any thoughts that don't already agree with your mindset.

                            From the exodus of manufacturing, to half our exports suddenly being less competitive thanks to tariffs imposed by our biggest export market Our fishing industry, so beloved of people whining about sovereignty, currently sell most of their catch into the EU... which , as it looks like we are heading to no-deal, will be subject to tariffs and customs checks. Talk about cutting off your nose to spite your face.

                            So when the head man himself says that Nissan Sunderland is "unsustainable" in the event of No deal. Well... what? Do think he never said that? Thats its somehow lefty propaganda? Do you think hes lying? Just trying to get a handout? Do you think hes an EU plant? or do you just not care?

                            The latter, I think. Thats what makes you immune to evidence. I belive its called wilful ignorance. With a large side helping of conformation bias.

                            1. Glen 1 Silver badge

                              As for the racist delusion. "Most African countries enjoy duty-free and quota-free access to the EU market" (pdf)

                              It isn't remainers baying about uncontrolled immigration. The Vox pops about needing to leave the EU because of the muslims. But, hey don't let facts intrude on your delusions, amirite?

                              1. LucreLout Silver badge

                                It isn't remainers baying about uncontrolled immigration.

                                No, you just want to keep it limited to prioritising the white folk over everyone else. Racist, yes.

                            2. LucreLout Silver badge

                              You have already been given several reasons by other commenters, you just ignore them or dismiss them without actually refuting them

                              No, I haven't. I've been given this excuse by other remainers but no actual reasons. Come on, you're the one making a scene about it, so state your reasons for wanting to be in the rEU. The remain campaigns economic predictions ALL turned out exactly opposite to what they had predicted, so you can't make a case on those.

                              From the exodus of manufacturing

                              There's been no exodus of manufacturing - the work has been moved here! See Nissan closing factories all over Europe but not here.

                              to half our exports suddenly being less competitive thanks to tariffs imposed by our biggest export market

                              Only about 7% of our exports go to the rEU. What's the other 43% you think will gain tariffs? You're forgetting the balance of trade deficit with the rEU that means any tariffs they apply we can afford to directly refund to our exporters and still make a profit due to the tariffs we'll be charging them.

                              Our fishing industry, so beloved of people whining about sovereignty, currently sell most of their catch into the EU...

                              Their fishing industry sells most of their catch to us. Its a trivial deal to sort out once we have the main trade deal done. You seem to misunderstand that leaving the rEU means we won't be trading with them. We will, the trade deal just determines the level of tariffs.

                              So when the head man himself says that Nissan Sunderland is "unsustainable" in the event of No deal. Well... what? Do think he never said that? Thats its somehow lefty propaganda? Do you think hes lying? Just trying to get a handout? Do you think hes an EU plant? or do you just not care?

                              In the City we call that talking our book. You can see the brimming confidence he has because he's shuttered his rEU plants and brought the work to Sunderland. Its not what they say, its what they do. Do you just not understand reality, or are you trying to look through it because it doesn't fit your racist little europhile views? Are you actually so dim that you listen to what he is saying, see that it doesn't fit at all with what he is doing, and then just dismiss that as what exactly?

                              All of the evidence to date backs up the Leave campaign and destroys all economic arguments advanced by remain. That is why I'm still waiting to hear why you want to be in so badly. What specifically is it you think you gain from being in? The answer is nothing, you're just making much sound and fury signifying nothing because you don't want to accept defeat. The future is laughing at you - you're the modern flat earthers, and it is you that is immune to evidence.

      3. vishal vashisht

        YOU are paying those taxes

        If your employer wasn't here, you'd be working for someone else. You'd be still paying NI, Income Tax, etc etc, spending money in the country and paying VAT. It might not be for a big multi national, it might be for a little less; or even considering the amount of outsourcing we have to compete against, it might be for a little more.

        However, YOU would be more or less contributing the same to society as you are now.

        We need to move away from this americanisation where we have to be grateful to our employers for our jobs. YOU are supplying YOUR skills that YOU took time to learn and hone. They aren't paying you for a laugh & would get rid of you at a drop of a hat if they could.

        If Suddenly Google have to pay a Sales Tax, paid in the LOCATION of the sale, suddenly they wouldn't be able to shift all that VAT and tax about. they would HAVE to pay taxes locally or sell nothing in the UK. How many Billions does Google make selling Advertising in the UK? Do you think they'd suddenly bugger off if they only made 81% of those Billions?

        The same with Apple, Facebook, etc. They threaten, tehy scream they cry, but they make TOO MUCH MONEY in the UK to leave. Even if they did, someone else would step in and take those £Billions of suddenly available business. Workers would still do the same jobs, just for different companies. The ONLY losers would be the tech firms who throw their toys out of the pram and suddenly have lost access to the UK/EU Market.

        1. Doctor Syntax Silver badge

          Re: YOU are paying those taxes

          Bob, is that you?

          1. Glen 1 Silver badge
            Angel

            Re: YOU are paying those taxes

            I don't think Bob would ever advocate people/companies paying more tax. Tax is SOCIALISM after all

      4. Pen-y-gors Silver badge

        @AC and the UK gets all the tax on my income, NI, VAT, council tax etc

        Totally irrelevant. That's actually true of employees of companies who DO pay their tax. So why should big companies be different?

        Let's keep it simple: turnover tax. Say 5%?

        1. LucreLout Silver badge

          Let's keep it simple: turnover tax. Say 5%?

          You'll get nothing from Apple for that. The order may be taken by Apple Dublin but the sale takes place with Apple Bahamas and the product ships from Apple China.

          You'll get nothing from Google for that. The searches take place in the UK and that is where the advertising is viewed, but the sale of that advertising is in Google Cook Islands which is where the turnover then happens.

          You'll get nothing from Amazon for that. The product may be viewed by someone in the UK on a website hosted in America, for a product sold in Sarl, Lichtenstein or some other EU tax haven.

          In all cases the turnover in the UK arm is virtually zero by comparison to the revenues you're making eyes at.

          There's nothing simple about a turnover tax, save for my local Bahamas based coffee shop - them you'd get, but the companies you're aiming for you'll miss by a country mile, and that's before people in my industry get creative with the corporate structures and accounting.

          1. vishal vashisht

            the SALE is in teh UK

            If your customer is in the UK, your SALE is in the UK. Doesn't matter where your servers are, where your head office is, where your corporation is.

            I buy advertising in London, me, my company, are in the UK, the sale is in the UK, tax is charged in the UK. I guy a widget from Amazon, I'm in the UK, the SALE is in the UK, the tax is in the UK.

            I buy a laptop from the Apple Store, the laptop is in the UK the sale is in the UK, the tax is paid in the UK. Thats the advantage of a sales tax over VAT or anything similar to that. LEGISLATE, get rid of VAT and state that the sale is located where the customer PHYSICALLY resides and all that tax avoidance goes out the window.

            Unless you can talk every single one of your customers to incorporate in the Bahamas you're screwed.

            1. LucreLout Silver badge

              Re: the SALE is in teh UK

              If your customer is in the UK, your SALE is in the UK. Doesn't matter where your servers are, where your head office is, where your corporation is.

              It doesn't work like that. It never has and it never will.

              Lout (Cook Islands) sells the widget to Lout (UK) who resell the widget to you at a small markup. Most of the profit on that transaction exists between Lout Cook Islands and Lout UK, and so becomes taxable in the Cook Islands. That's the very very basics of what is called transfer pricing.

              That is before Lout (UK) pays its financing charges to Lout (Lichtenstein) from who it has loans. Interest on debt is not profit and so not liable to taxation. That is a very basic overview of what is called structured capital.

              The ownership of these entities may be transparent in some cases, and obscured in others. for instance there are several places in the world where I can quite legally own a company and you cannot determine that it is me that owns it. This is called corporate structuring in the most basic sense.

              "You" can't legislate beyond your border but "I" can trade beyond it and in many places simultaneously.

              LEGISLATE, get rid of VAT and state that the sale is located where the customer PHYSICALLY resides and all that tax avoidance goes out the window.

              No, it doesn't, not in the real world. While I have some sympathy with your idealism, it is borne of ignorance I'm afraid. There's nothing you or any commentard could conjure up that my department couldn't work around in seconds, minutes at a push. There's nothing HMRC could ever enact that isn't already backstopped or could not be worked around.

              Absent a global flat rate tax system the only option where corporations are concerned is to make the tax rate low enough that the avoidance isn't worth it, and preferably to do so before the avoidance begins as unwinding these things can be costly and time consuming.

              I know that isn't the answer you were hoping for and that folk here have a tendency to shoot the messenger, but the sooner you accept it and incorporate it into your thinking, they happier you'll be, and the less fanciful your world view will become.

              1. DavCrav Silver badge

                Re: the SALE is in teh UK

                "No, it doesn't, not in the real world. While I have some sympathy with your idealism, it is borne of ignorance I'm afraid. There's nothing you or any commentard could conjure up that my department couldn't work around in seconds, minutes at a push."

                It is possible though, at least for consumer goods. One can close almost all of the loopholes and make it a lot harder to do it.

                1) All sales are booked at the physical location of the purchaser. One might prefer to choose the location in which they are normally resident, but I prefer physical location.

                2) Tax is paid on gross revenues, not profit. Fuck business's special pleading with one face while pushing everything round the world to save tax with the other face. This will destroy a lot of wafer-thin margin business, so I'm in two minds about it, but I think overall things would be better. Perhaps there would be an appeal if you can show (to a jury, not to an HMRC appointee you can bribe) that the business is not profit-shifting and is genuinely low-margin and needs to be measured on profits.

                3) Debt, loans, etc., are not tax-deductible. Even if we are not trying to do anything else, I want this one to screw over debt-fuelled buyouts.

                1. LucreLout Silver badge

                  Re: the SALE is in teh UK

                  It is possible though, at least for consumer goods. One can close almost all of the loopholes and make it a lot harder to do it.

                  Only if you close your eyes and wish away transfer pricing,

                  1) All sales are booked at the physical location of the purchaser.

                  Lets say it costs Lout (Bahamas) £100 to make a widget. They sell it to Lout (Caymans) for £1000, Lout (Caymans) sells it to Lout (UK) for £1100 and Lout (UK) Sell it to you for £1200. How much tax do you think you captured with your scheme? Not much, is the answer.

                  2) Tax is paid on gross revenues, not profit.

                  Congratulations you just made an unemployment spike the like of which Jeremy Corbyn could only dream of.

                  Literally almost every business in the land would be toast. Profit margins for some industries are so tight you'd lose whole swathes of cultural and economic activity forever.

                  3) Debt, loans, etc., are not tax-deductible. Even if we are not trying to do anything else, I want this one to screw over debt-fuelled buyouts.

                  Good luck with that. Now as well as all the low margin businesses you've killed with your second suggestion, you've just seen every major company in the land cease trading in or with the UK. You now have no private sector employment and so can afford no public sector employment of any kind nor any welfare. You've literally killed the country out of spite and jealously - you must be a labour voter.

                  Of course, the successful people you started off wanting to tax will just leave for less hostile places and you'll be literally back to subsistence farmin in your garden to try and survive another winter.

        2. Doctor Syntax Silver badge

          "Let's keep it simple: turnover tax. Say 5%?"

          A bit tough if your sales margins are, say 6% and even tougher if they're 4%.

          1. Peter2 Silver badge

            My view is that there should be a "taking the piss act 2020".

            Upon conviction by a jury for "taking the piss" by exploiting rules in what a jury feels is an unfair manner a company may be taxed an amount of revenue from 1% to 100% of it's turnover for up to ten years.

            Sentencing guidelines: A company should end up paying at least 50% more tax as a result than they would otherwise have paid by following the rules. 100% taxes should only be applied to a "shell company" so judged by a jury.

            /end problem. At the moment there is no real downside to not paying tax by employing an army of accountants. If you increase the penalty for playing games well beyond the benefits of playing those games then the problem would fairly immediately cease in order to avoid punitive taxation. If it bankrupts companies or forces them into being noncompetitive? Too fucking bad. It's not as if they hadn't done that themselves for years to companies that had been paying tax.

            Far too many of our laws were written on the basis of fair play making assumptions that people running these companies are gentlemen and would never be dishonourable enough to engage in these games because doing so would tarnish their personal honour, ruining their personal reputation and leaving them a social pariah. This was undoubtedly effective two hundred years ago, probably still effective one hundred years ago questionably effective 50 years ago and utterly ineffective today.

      5. elsergiovolador

        Why do you think someone who worked hard their entire life to get high paying job should pay substantially higher tax than someone who has not contributed much and has not invested in personal development?

        1. vishal vashisht

          because society helped them there.

          I would never have got where I am without living in a tax payer funded society with safe streets, running water, a police service, an NHS, publicly funded libraries, lack of civil wars. Even though I was privately educated, my teachers were trained by the tax payer at university, ni those days fully funded with no fees, the enforced driving laws in this country mean that I'm far less likely to be run over here than in countries that don't have the laws or enforcement capabilities.

          I was never kidnapped to join a child army, I am able to buy property and have it protected legally by a system of law paid for by the tax payer. My employer is legally obliged to pay me. I can walk down the street without the fear of being mugged, which when you compare London to other capital cities the risk is incredibly low. The food I buy is tax payer funded checked and safe. The work environment is checked and tax payer funded safety inspectors make sure that the chance of me dying at work is incredibly low.

          It's always amazing that people who favour low taxes always mention Singapore but never Sudan. And realistically, what has Singapore brought to the table from an engineering, educational, medical perspective? It's a tax free banking hub where the rich live great lives and every other local is hidden in the dirt somewhere on the edges of the city

          1. LucreLout Silver badge

            because society helped them there.

            When I was studying long hours late at night I didn't see society there with me.

            When I was training long hours late at night I didn't see society there with me.

            When I was working long hours late at night I didn't see society there with me.

            In fact, society has done literally no more to make me a success than it has for all those people that didn't bother to lift a finger to help themselves. I could have sat back, watched dancing on the stars with ice in the jungle book like everyone else did and society would have done exactly the same things towards that.

            Society has therefore played no greater part in successful people being a success than it has in failures being failures. Your whole argument is a massive non-sequitur and a triumph of emotion over reason.

        2. DavCrav Silver badge

          "Why do you think someone who worked hard their entire life to get high paying job should pay substantially higher tax than someone who has not contributed much and has not invested in personal development?"

          Why should society provide you with security? I would put a list of tax-dodgers on a website, together with their addresses, and point out that they no longer will be protected by the police, so rob them if you fancy it.

          You say that you can employ private security? They cannot stop people robbing you either, or they go to prison/go on the website. You leave? Well, you can leave your property behind.

          It's time we started really dealing with people who want to live in society but don't pony up through being a tosser, rather than having no money.

          1. LucreLout Silver badge

            Why should society provide you with security? I would put a list of tax-dodgers on a website, together with their addresses, and point out that they no longer will be protected by the police, so rob them if you fancy it.

            I pay for it. Yours too. You're being silly, but lets indulge your delusion for a moment anyway, just for giggles....

            Happy to just pay for my own security if that's where you'd like to go but don't blame me when you suffer the consequences though - half of men are below average strength, fitness, and combat training. I might be knocking on in years now, but even at 50 I'm still confident I'm in the top half, though lower down than 30 years ago. Many people in finance have a robust background rather than a silver spoon.

            You're also assuming the people meting out the justice and recovering my property will be domiciled here, when there's really no reason for that. I'd only need one witness, who could be my neighbour, and a pre-agreed contract with some unsavory offshore types - in your scenario someone would emerge to fill that need thanks to the wonders of capitalism.

            Be careful with your post-civilization fantasizing, because the only groups that do well in it are either the men with the shotguns or the men paying the men with the shotguns - in your post you're neither of those. Don't assume the successful will simply sit back in passive compliance with your wishes - we didn't get to being successful that way.

            They cannot stop people robbing you either, or they go to prison

            Spoken like a man with no clue how hard and how long you have to try to get sent to prison, even assuming you get caught, and that is far from certain.

            Make sure the consequences for the first scrote in line a severe enough and the line evaporates. It's easier to pick on a softer mark instead, you for instance. Word gets around, list or no.

            It's time we started really dealing with people who want to live in society but don't pony up through being a tosser, rather than having no money.

            It's time we realized that the single greatest cause of their having no money is themselves, time we stopped pitying them and allowing them to live broken useless lives, and forced them to get up and make something of their day. Take responsibility for yourself man.

            Frankly there's a limit to how much I'm willing to pay for you to have your least little whim fulfilled while your greatest challenge is how to wile away another day of idleness. Its time you grew up and stood on your own two feet instead of mooching off the successful. We don't owe you a damn thing.

  2. Flak

    A small contribution to countries' Covid-19 costs...

    ...gratefully received on behalf of the many

    1. Robert Grant Silver badge

      Re: A small contribution to countries' Covid-19 costs...

      From the companies creating the tech that's allowed us to weather life in these times.

      1. DavCrav Silver badge

        Re: A small contribution to countries' Covid-19 costs...

        "From the companies creating the tech that's allowed us to weather life in these times."

        And they did it all because of the love in their hearts, and a trillion-dollar valuation.

        1. Robert Grant Silver badge

          Re: A small contribution to countries' Covid-19 costs...

          Who cares why they did it? Everyone does everything for money. It's normal.

          1. Pen-y-gors Silver badge

            Re: A small contribution to countries' Covid-19 costs...

            @Robert Grant

            Everyone does everything for money. It's normal.

            I'd disagree. Demanding more and more money to buy things you don't need is not normal. It's a sign of a serious mental illness. Not everyone does things solely for money. Otherwise why would we have charities? One of the interesting things from this pandemic has been how communities have drawn together, people helping each other - and not expecting payment. Community-oweed and village/corner shops have kept going, offering free same-day delivery services to local residents when the supermarkets offered them a delivery in 3 weeks time. That's normal.

            1. LucreLout Silver badge

              Re: A small contribution to countries' Covid-19 costs...

              Demanding more and more money to buy things you don't need is not normal.

              Agreed. I long ago stopped working longer or harder for more money as the tax system is too great a disincentive once you hit the 67% rate due to tax allowance withdrawal.

              Most people that earn good money don't spend it all buying things they don't need, they spend it buying assets to produce a passive income so they can one day retire and still buy the things they need. Most people in the private sector don't have access to a gold plated risk free final salary pension scheme or even a career average one.

              To make the same pension a retired head teacher gets requires buying a massive amount of shares each year - truly eye watering amounts in fact. You need to build a pot of about £2 million to achieve the same thing. It's about £1000 per month net of taxes for 40 years. It won't fit into a private pension pot so you're going to need to save more than that due to being taxed on the second half of the sum.

              You're assuming greed where you should be seeing prudent retirement planning.

              1. Julz Silver badge

                Re: A small contribution to countries' Covid-19 costs...

                I guess the question is, how much is enough?

                1. LucreLout Silver badge

                  Re: A small contribution to countries' Covid-19 costs...

                  I guess the question is, how much is enough?

                  If I could mirror the earning power and pension arrangements of the highest paid public sector worker in the land, that would be enough. That, however, is very nearly £500,000 per year I'd need to earn every year, and it'd have to be risk free and a job for life. I'm nowhere near that and I never will be.

                  Now, I'm happy to have the whole public sector converted to pay as you go pensions so we can all see the truly epic cost of this, and allow fair comparisons with the private sector, as well as harmonized tax rates (public sector pensions are a massive tax advantage over private provision due to the actuarial fraud in the calculation of market value for each year accrued).

                  If its not enough for the public sector, don't come crying that its not enough in the private sector. So same question now for the public sector - how much is enough?

  3. Pascal Monett Silver badge
    Coat

    "the amount of money at stake is enormous"

    Officer, you can't ticket me, the cost of that ticket compared to my paltry revenue is enormous.

    Inspector, you can't arrest me, the cost of losing my freedom is enormous.

    Your Honor, you can't put me in jail, the cost of losing my illegal drug cartel is enormous.

    . . .

    Man, the ways that argument could be used is dizzying.

    1. James 139

      Re: "the amount of money at stake is enormous"

      That is how it works for the rich, no?

      Things arent fines or penalties, its the cost of doing something, because its low in comparison to their wealth.

  4. Kev99

    My heart bleeds purple kool-aid for the techies. Instead of trying to actually invest in product they instead invested in tax dodges.

    1. James 139

      Funny that, it seems to be the way many groups do it these days.

      Why improve and reform when they can find ways to dodge the problem?

      Consider the US police departments that have union leaders, and probably members, complaining about how they are being stopped from doing their job or being made to look like the "bad guys", would it not be easier for them to change their behaviour rather than try and defend it?

      Trump then offers grants to police forces that do certain things, and you can almost guarantee that some of the people who will be involved in that are immediately thinking of ways to make it look like they are taking the steps, whilst actively not.

      They have already found ways to be able to retaliate against "beligerant suspects" by provoking them or otherwise causing them to "bump" an officer.

      Legitimising bad or poor practices does not make them good practices.

    2. elsergiovolador

      Maybe this is a sign that taxes are set too high...

  5. vtcodger Silver badge

    IT's late and I'm kinda dumb

    It's probably obvious. But not to me. Why is stock based compensation taxable to the corporation rather than the employee who receives it? It sort of sounds like the IRS is saying that the costs of paying employees in part with stock options aren't legitimate business expenses. Maybe not. But it'd be nice to have an explanation of why not.

    1. Jellied Eel Silver badge

      Re: IT's late and I'm kinda dumb

      I am not a lawyer, or an accountant, and certainly not a tax specialist.. But I think it's this-

      it will not review a decision by the Ninth Circuit of Appeals that stock-based compensation should be considered a US taxable asset.

      Which always struck me as a bit odd, but then so does much of modern finance. So seemed to me that if anything, it's a liability, ie money due to employees assuming they survive long enough for it to vest. I'm guessing there are devils in the details, ie if I have an option at $25 and stock price when it vests is $100, company needs to find shares either in the market, or from unissued stock and books a $75/share loss. That then reduces company tax liability. So my guess is the options should be treated as assets at the prevailing value, or just can't book the loss.

      How employees get shafted is down to their own tax circumstances, so when I worked for a US company, some staff like Germans and I think French had to pay tax as soon as the options were awarded, even if they wouldn't vest for 2-3 years or more.

      1. keith_w Bronze badge

        Re: IT's late and I'm kinda dumb

        I once worked for a company that had a stock purchase plan which you contributed over a year. They set the price of the stock at 85% of the lower of either October first of the current year or Sept 30 of the following year. One year, there was a minor glich which resulted in a stock market price of about half the prior price on Oct 1, setting the first price. During the ensuing year the price rose to it's normal region which made the 85% of the Oct 1 price an outstanding bargain, except that all the participants got nailed for Capital gains of approx. 65%. One of my co-workers complained that it had cost him 3 months pay. I looked at him and said 'so sell the shares'.

    2. vtcodger Silver badge

      Re: IT's late and I'm kinda dumb

      I read much of the Ninth Circuit's opinion. It's actually quite well written considering that it addresses material that is stunningly dull. It's unclear to me exactly what the details are here. But it appears that Altera shifted stock option related obligations around between entities they control in such a way as to somehow minimize taxes. What seems to be at issue is the extent to which the IRS can undo that. And the answer is that the Ninth Circuit feels that IRS doesn't have to treat transactions between wholly owned entities the same way as it would transactions between independent companies if it determines that the only reason for the transactions is to hide taxable activity.

      Or maybe I have that all wrong.

    3. ettery

      Re: IT's late and I'm kinda dumb

      I don't know for sure about the US, but in most countries the employer is liable for deducting the tax from the employee's pay and submitting it to the revenue service - you only get the post-tax amount in your bank account. This makes life much easier for the revenue services - they can chase a (relatively) small number of companies for large numbers rather than lots of individuals.

      And - if a court later decides that the companies gave employees benefits which should have been taxable, and the tax wasn't paid, the revenue service is going to try to recover that tax from the companies involved. The companies will end up paying it, and it's very difficult if not impossible for them to recover it from the employees, some of whom are probably no longer employees. Generally they don't try, for obvious reasons.

    4. JohnSheeran

      Re: IT's late and I'm kinda dumb

      Standard disclaimers in play (not an attorney, accountant, etc.)

      As I understand the logic, it's this: Stock based compensation is taxed to the corporate level because it's essentially wage compensation for them. The receiver of the stock is not taxed until they either sell the stock or when they receive dividends for the stock. They are then taxed for capital gains from the proceeds of the transaction.

      Is this fair? Sure. We're not talking about the tax model in this measure.

      Is it a loophole? Yes. The way taxes are assessed on capital gains is not the same as it is on other forms of income and those of us that don't get that advantage regularly realize that it's a way for corporations to work around the tax laws. There is a lot more to say about this and how it works in the modern world but it's probably too long to discuss in this particular context.

  6. Anonymous Coward
    Anonymous Coward

    An alternative view

    My understanding is that what Altera did was correct up until they were purchased by Intel and tax liabilities crystallised as entities were relocated or disbanded.

    I'm not sure that this is a tax dodge - more a screw up during an acquisition. Someone didn't pay enough for their tax advice....

  7. hoola Bronze badge

    It's a scam

    Stock options are always a scam to avoid someone involved paying tax. IT also has a vested interest in the stocks rising in value, something that until very recently has been considered normal for tech stocks.

    Correct me if I have misunderstood but staff are given an option to buy stocks at a fixed price, some point in the future, regardless of the value at the time it is purchased.

    Value last year 5

    Current stock value is 10

    Option to buy at 12 in 3 years time

    Value in 3 years time 20.

    If it was not a large corporation doing this it would be fraud.

    1. Cederic Silver badge

      Re: It's a scam

      How is this a scam?

      It's an incentive based reward. "Help our stock price grow and you'll benefit."

      It has a cost to the business, and it's that very cost (in the form of an intangible liability) and how it was allocated between related businesses that led to the court case. It has a benefit to the employee, who in the UK would be liable to pay tax on the actual cash benefit realised; I rather suspect the same applies in the US.

    2. James 139

      Re: It's a scam

      But you can sell stock you own at any price you like, off market.

      I can give you stock I own for nothing, if I so wished, or even in exchange for other services worth more or less than the current stock market value.

      Market price is just what open trading thinks its worth to someone else willing to pay for it.

      1. Pen-y-gors Silver badge

        Re: It's a scam

        True. And the taxman is interested in the value of what you earn, not its nominal cost.

        Remember the case of the 'cunning' business that paid its staff £5 per month - in gold sovereigns! They then bought the sovereigns back with banknotes ready for next month. They tried to argue that no NI or tax was payable on £5/month, although the employees paid income tax (or CGT?) on the gold sales.

        They lost.

    3. Pen-y-gors Silver badge

      Re: It's a scam

      Not quite.

      If the company offers options over 1 million shares they have to but those shares in at the time the offer is made. Then in 3/5/7 years or whatever they can sell the shares to the staff, who will (in the UK) be liable to CGT as and when they sell.

  8. big_D Silver badge
    Facepalm

    It will cost us money...

    challenged it in court, arguing that "the amount of money at stake is enormous."

    That has never been a valid defence in any case I've heard of, where the IRS or equivalent is concerned...

    1. DavCrav Silver badge

      Re: It will cost us money...

      "That has never been a valid defence in any case I've heard of, where the IRS or equivalent is concerned..."

      I felt like being charitable and interpreting it as "the amount of money at stake is enormous, so it's important to make sure the the legal situation is crystal clear, hence a court case is necessary". But then that feeling soon passed.

      1. Cederic Silver badge

        Re: It will cost us money...

        I was reading the judgement from the 1772 case that confirmed slavery was not legal in the UK last night and they deferred judgement explicitly because 700,000/- was at stake - the 14,000 slaves in the UK at that time, valued at approximately 50/- each.

        The /- nomenclature tends to mean shillings, but 700,000 shillings in 1772 equates to just over £5m now. While that may not seem a lot, relative purchasing power (e.g. by comparing Government expenditure then and now) puts it at the equivalent of £269bn of value now.

        Then they explicitly discounted that financial implication and made the judgement based on the law and not its impact.

        1. The First Dave Silver badge
          Boffin

          Re: It will cost us money...

          Writing such a large amount of money as shillings seems very unlikely, though I agree with your characterisation, much more likely that this is in pounds, or even more likely that it is in guineas.

        2. Pen-y-gors Silver badge

          Re: It will cost us money...

          The compensation paid in 1833 worked out at about £30 per person, so I think they meant £50 not 50s in 1772.

          Comparing 'value' over time is very difficult. Depends what you count and how. RPI? Wages? There's a nice online calculator which came up with this

          In 2019, the relative value of £1 0s 0d from 1772 ranges from £127.70 to £15,880.00.

          A simple Purchasing Power Calculator would say the relative value is £128.80. This answer is obtained by multiplying £1.00 by the percentage increase in the RPI from 1772 to 2019.

          This may not be the best answer. (Their words!)

          I was doing some work on social history in the 1850s. Weekly wage for a skilled craftsman (Smith, Carpenter etc) was £1/1/0 (I guinea, 3/6d/day) What does someone like that get now? £25K? So about 500x . Beer then was usually 1d or 2d a quart. It's now about £3, so maybe 720x (but it's now heavily taxed of course! About 10/- per pint + VAT, so take that off and that's down to £2, so about 500x again over 170 years). It looks like wages increased by maybe 50% from 1770s to 1850s, So a 'fair' estimate of the 'value' of £700K now is probably about £500 million (about 1/6th of an aircraft carrier), not £269billion!

          1. Cederic Silver badge

            Re: It will cost us money...

            It did seem to make more sense to use pounds (or I guess guineas) for that magnitude, but I couldn't track down contemporary writing guides that would help confirm that they didn't in fact mean shillings.

            My £269bn estimate derived from £35,000 (i.e. 700k shillings) in 1772 as a percentage of Government spending in that year and applying the same percentage to Government spending in 2019. An obvious flaw is the significant increase in the welfare state during the intervening centuries that will distort figures somewhat.

  9. Anonymous Coward
    Anonymous Coward

    Wall St. didn't care about it.

    If the share prices weren't affected by the news, then Wall St. knew that this was coming, and the companies will just pay up quietly. In order to get round it, they would need to get a law passed which exempted them, and have it made retrospective. And nobody can see that happening in a famously honest and incorruptible country like the U.S.

  10. Lars Silver badge
    Thumb Up

    The Age of Reason

    The Age of Reason started in Europe after all.

  11. Anonymous Coward
    Anonymous Coward

    Your scheme involved the Cayman Islands?

    Guilty. Next case.

  12. macjules Silver badge

    Among the companies that urged the Supreme Court to take up the case were Apple, Google and Facebook

    Petard meet hoist. Hoist meet petard.

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