Reply to post: Re: About bl**dy time

US slaps tariffs on countries that hit Big Tech with digital services taxes ... then pauses them immediately

Dave314159ggggdffsdds Silver badge

Re: About bl**dy time

"CGT only triggers when you liquidate assets, so you can't use that instead."

Why not? That is how we deal with growth rather than dividends. It's worked for many decades.

"LDS seems to be suggesting..."

A wealth tax, yes. As usual, it's a ridiculously terrible idea. We tax flows, not stocks in very nearly every case. (Let's ignore council tax bands. It's just a weird, weird system compared to everything else we do. Not terribly important in terms of taxing people with money, though.)

>> Because foreign people investing in our economy benefits us.

>It's not nearly that simple.

Yes, it's just that simple. Foreign direct investment raises average wages and low end wages. It is an increase in investment in productivity, and one that doesn't cost the recipient country anything. It is wholly good; end of story. (Obviously competition for investment opportunities isn't good for domestic investors' investments. But it's good for the economy as a whole. In other words, it increases the return to labour rather than capital. Was that what you intended to disparage?)

"It can be beneficial, but isn't automatically so - especially if that "investment" is of a form that means an increasing proportion of "our" funds are funnelled offshore. Trade complicates things significantly. Foreign investment into stuff we can export benefits us (as it effectively moves money into the country, despite some them moving out). Foreign investment that drives up imports though, isn't nearly as clear cut."

I'll give you the benefit of the doubt and assume there's some meaning you didn't manage to put into words. I have literally no idea what you were trying to say there. I assume it's wrong, given how you started, but really I can't tell. I'm somewhat amused by the concept that people sending you money means 'your' funds being offshored. It's the exact opposite, obviously.

You appear to be labouring under the misapprehension that exports are good. They aren't. The benefits of trade are imports, not exports. This has been well-known for over three centuries.

Please, if we're going to try and talk economics, can't you at least learn the basics? It's like discussing maths with someone who argues about whether addition is commutative.

"You're a US company, and you've recently set up a warehouse in the UK, and are making a mint shipping widgets around the country, and into the EU (or wherever)."

Yes, and you're paying property taxes, transport taxes, fuel taxes, and employment taxes. You want to argue for an increase in those, that's defensible - I have no opinion on the subject in general; a justifiable rate is, by definition, reasonable. But we're here discussing corporation tax because _it doesn't work_. So why bother? Tax business activities, but not business profits until they turn into income for someone.

Ultimately, I think you're basing your ideas on the notion that the tax system is supposed to be fair in some way or other. Lovely concept, but in fact taxes are raised wherever there is the least political problem in doing so, and the budget is based on what can be raised, rather than what needs to be raised.

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