The tide of ignorance of EU law laps over the wall of reality

The Mail has bought and run as its own a piece from the Guardian about what its like to work for Amazon.

It focuses on the working conditions, low pay, use of agency labour and number of jobs they estimate the company’s rise has cost elsewhere.  But no such attack piece on a company like Amazon is complete without bringing up taxation:

It is taxes, of course, that pay for the roads on which Amazon’s delivery trucks drive, and the schools in which its employees are educated.

Taxes that all its workers pay, and that, it emerged in 2012, Amazon tends not to pay.

On UK sales of £4.2 billion in 2012, it paid £3.2 million in corporation tax. In 2006, it transferred its UK business to Luxembourg and reclassified its UK operation as simply an ‘order fulfilment’ business.

The Luxembourg office employs 380 people. The UK operation employs 21,000. You do the sums.

One can understand this line.  One can also sympathise with it to a degree because it underlines what is wrong with the corporatist system we have, something that too many people wrongly describe as capitalist.  But that sympathy erodes somewhat when what follows a few paragraphs further on shakes us back to our senses and reveals yet again the sheer ignorance of the people railing against this situation:

MPs like to attack Amazon and Starbucks and Google for not paying their taxes, but they’ve yet to actually create legislation compelling them to do so.

All too often these left leaning campaigning writers are pro-EU, they love the idea of knocking over nation states to create a nationless unions such as the EU.  Yet they are either too stupid to understand the reality, or too dishonest to report it, by not pointing out it is EU law and one of the four freedoms (of movement of capital) that prevent MPs creating legislation to tax profits made in the UK when that company’s UK operation is merely ‘passported’ because its base is in another EU state.

Such is the pisspoor calibre of our media, they continue to misinform, mislead and misdirect their slowly dwindling audience, ensuring the sum of knowledge is minimised yet rousing rabbles to attack MPs for inaction where in reality they have no power.

Rather than attack MPs for not applying taxes they are barred from levying, these prestigious know nothings should be attacking them for allowing power to be taken by Brussels, leaving the UK without sovereignty.  But this is what happens when we are flooded by a tide of ignorance so big the walls of reality are breached.

11 Responses to “The tide of ignorance of EU law laps over the wall of reality”

  1. 1 Barrie Singleton 09/12/2013 at 12:16 am

    Eau de EU

    José Manuel Barroso is flushed!
    As once more rationality’s crushed.
    He’ll have loos harmonised
    Every flush EU-sized!
    Will such eulogies ever be hushed?

    See my site for more ‘Limerick of the Day’.

  2. 2 Mb 09/12/2013 at 11:58 am

    It’s the UK that time and time again blocks EU-efforts to attack tax arbritage within the EU. So, yes, UK MPs inaction is to blame.

  3. 3 Autonomous Mind 09/12/2013 at 12:04 pm

    If what you say is correct in the context of what I’ve written, where has the EU sought to end freedom of movement of capital?

    The issue in question is taxation of transfer payments by companies to the Euro HQ. So do explain where these EU efforts are.

  4. 4 Barrie Singleton 09/12/2013 at 12:41 pm

    It was you employment of the “tide of ignorance breaching walls of reality” that struck me AM. Movement of capital (not my area of expertise) is a small wave. Faux democracy has got the process od distillation of leaders upside down. Delusonal dross rises to the top and fine spirit is buried inthe sludge. I suspect this is why history shows all complex societies wither and die.

  5. 5 Brian H 09/12/2013 at 4:45 pm

    Oof. Judging by the quality of the limerick sample, I’ll pass, thanks.

  6. 6 Edward Spalton 10/12/2013 at 5:58 am

    You have drilled down to the bedrock of the matter here – something which the mainstream media, whether right, left or centre always avoid. For thirty years I have noticed the reluctance of the media to do this. We get plenty of outrage about EU regulation ( what I term “straight banana” or “mad official” stories) but hardly anything about the political surrender which has created them. Even the supposedly pro independence Daily Express is usually stuck in this rut. It is the absence of sovereignty every time which is ignored. Because the trappings of Parliament still exist and they still change the guard at Buckingham Palace, most people still haven’t grasped the enormity of the betrayal.

    A while ago there was a large rally in Derby protesting the award of a contract for railway rolling stock to Siemens. There was a strong presence of the harder left of the trade union movement. Nearly all of them were demanding nationalisation – both of Bombardier ( the Derby based company which took over the former British Rail carriage and wagon works) and of the railway itself. I spoke with several groups and told them it was pointless doing that unless they first nationalised the government. It was an entirely novel concept for most of them . Most struggled very hard to get their minds around it and some thought the idea was racist!

  7. 7 John 10/12/2013 at 9:58 am

    It takes time.
    To start with, companies have to be required to provide information about where their income actually comes from. Laws to enable that are being framed now. Ownership of many companies is difficult to obtain, laws are being framed to solve that.
    Of course, as fast as new laws are being made, new ways to enable avoidance are being designed.
    It´s not as if the revenue do not know, all schemes to legally avoid tax have to be cleared with HMRC first!
    Of course, since the UK has the worlds largest network of tax havens (or secrecy jurisdictions), it is hard work to solve the avoidance problem.
    It isn´t going to get easier because the queue to be a tax haven is not getting shorter!

  8. 8 Autonomous Mind 10/12/2013 at 2:17 pm

    Barrie, movement of capital is actually a very large wave in the scheme of things. The sums involved are in the billions and represents a significant amount of income that would be taxable if it were not being transferred, legally under EU law, to the EU base of the corporate entity.

    It’s not even about tax avoidance in the way John has discussed. It is not an avoidance scheme and does not require approval by HMRC, it is simply a default freedom – one that that benefits corporates. For the EU to achieve the status of a state in its own right, it needs to ensure money can move without molestation within the bloc.

    The net result is the removal of tax sovereignty from nation states. It is part of the process to make nation states redundant. In the mind’s eye of the EUphiles the nation states would be the equivalent of counties in the UK. Administrative districts within a single state.

  9. 9 Barrie Singleton 10/12/2013 at 2:51 pm

    A very civil (civilised) reply. Genuinely appreciated. I was not ‘too far away’ but the terminology caught me out. I tend to regard power and money much as energy and mass of Einstein’s equation. Interchangeable. Power can annexe money and money buys power. And the money/power elite all belong to the ‘Club’. Decades of pondering have lead me to believe the only salvation is maturity (wisdom, integrity, honour, dignity, etc) culturally infused into the individual. While the desperate broken child strives to the top, there to use war as a tool of civilisation, and school (faux education) as a means of mass emasculation (institutionisation) this wave of complex living is – just like so many before – waving goodbye. The Kogi have it right.

  10. 10 EForster 10/12/2013 at 3:41 pm

    There are two arguments to be made against corporates registering “offshore”, firstly that the government of a country where they do business loses tax revenue and secondly that home based businesses face unfair competition from those offshore registered companies.

    It is interesting to look at the situation in the USA:
    “President Obama has criticized outposts like the Caymans, complaining that they harbor giant tax schemes. But here in Wilmington, just over 100 miles from Washington, is in some ways the biggest corporate haven of all. It takes less than an hour to incorporate a company in Delaware, and the state is so eager to attract businesses that the office of its secretary of state stays open until midnight Monday through Thursday — and until 10:30 p.m. on Friday.

    Nearly half of all public corporations in the United States are incorporated in Delaware. Last year, 133,297 businesses set up here. And, at last count, Delaware had more corporate entities, public and private, than people — 945,326 to 897,934.
    It is also a great place to reduce a tax bill. Delaware today regularly tops lists of domestic and foreign tax havens because it allows companies to lower their taxes in another state — for instance, the state in which they actually do business or have their headquarters — by shifting royalties and similar revenues to holding companies in Delaware, where they are not taxed. In tax circles, the arrangement is known as “the Delaware loophole.” Over the last decade, the Delaware loophole has enabled corporations to reduce the taxes paid to other states by an estimated $9.5 billion. ”

    In the USA a lot of businesses have clearly got round the second objection by joining the crowd. Businesses in the UK also have similar opportunities to do the same, some closer to home than Luxembourg.

    In doing this, corporates save money and can offer lower prices to customers for goods and service supplied. Governments lose tax money, but could simply raise the lost income by imposing additional taxes on sales (if permitted by the EU), except that they wish to avoid exposing the reality that in all cases the consumer pays. The indirect method preferably via corporation taxes keeps the voters happy in the belief that they aren’t really paying.

    If the UK left the EU and we adopted more distributed regional government, expect the same as long as we use companies as tax collection conduits.

  11. 11 Barrie Singleton 10/12/2013 at 4:04 pm

    Just taking UK in isolation, our culture is now utterly devoid of shame and (ironically, as out MPs are ‘de facto Honourable’) stripped of honour! Across the world (where we took our influence) such ideas as horror at bringing the Family Name into disrepute, or even just acting shamefully, have atrophied. We have brutalised ourselves. Hence any act, however digraceful, that adds to personal power/wealth, is not just OK, but praisworthy on the Thatcher-Scale of achievement. Nuff sed.

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