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A Taxing Problem

The bosses have tried every imaginable remedy for the crisis. To no avail. Now they hope to find a lever to raise their profits by lowering taxes. The campaign to lower taxes has swept the bourgeois world like wildfire. Through every avenue at their command the capitalists and the landlords are clamoring for economy in government. They want “cheap government” and the support of the working class to force a curtailment of expenses. We workers are robbed as producers, robbed of the surplus labor, of the surplus value which the capitalist divide among themselves as profits, rent, interest and to pay their office boys’ (government) and for the gangster racketeers who rob the robbers.

The government (the state) operates for the benefit of the capitalists,  owners of the basic means of production and circulation of all commodities and wealth. Government functions through an army of administrators and officials who must be supported. Taxation is the general method by which capitalists colle…

Taxation and its burden

Continuing our tedious but necessary economic education posts. This one on the subject of taxes.

When capitalist political parties are in disagreement, the issue of taxation usually looms large. Should income tax be reduced or increased?  The serious-minded worker who does his own thinking will probably at first be amazed at the dexterity exhibited by both the Labour and Tory sections of the capitalist class. We watch them handling figures and statistics in a way that must cause a circus juggler to turn green with envy, each proving that the poverty and misery is bound to increase if the proposals of the other side are adopted!

Henry George

Green MP Caroline Lucas is supporting an annual land value tax, based on its market price, but, of course, with many "new" ideas this one has been proposed before. Henry George, a nineteenth-century writer who had popularized the notion that no single person could claim to “own” land. In his book Progress and Poverty (1879), George called private land ownership an “erroneous and destructive principle” and argued that land should be held in common, with members of society acting collectively as “the general landlord.”

Henry George's book "Progress and Poverty" was very popular. The book's starting point was man's God-given right to the land. Private property in land was unjust as it restricted access to the land. As technological progress increased industrial production, the benefits, George argued, went not to the labourers or even to the capitalists but to the landlords in the form of increased rent. The remedy proposed in Progress and Poverty was…

Income Tax - "It's not on "

"...completely unjust...Some people are talking about taking this to the European court of human rights." - What's got some people so het up ? Torture ? Exploitation ? Censorship ?Oppression ?

No - the tax-man is planning to to make life harder for the 2,000 British millionaires who call Monaco, the tax haven , home. The Guardian reports :-

Until now, tax rules that allow "non-residents" 90 days a year in Britain have contained a crucial loophole: the taxman has not counted "travel days" entering and leaving the country, allowing businesspeople to commute in on a Monday, leave on Wednesday, and claim to have spent just one day in the UK.It has in effect allowed Britons to spend most of the year - up to 270 days - working in Britain, while claiming to be residents of tax havens such as Monaco and to avoid paying tax. That will change under a stricter enforcement of the rules to be unveiled today which has unnerved tax lawyers serving Britons in severa…

Tax Fraudsters

THE tiny principality of Liechtenstein is one of three countries to be blacklisted by the OECD for failure to co-operate with a clampdown on tax avoidance.With a population of around 35,000, Liechtenstein has a banking system shrouded in secrecy.The OECD named it, along with Monaco and Andorra, as a country that could do more to clean up its tax laws. It has also been accused of condoning money laundering, and tax evasion.Non-residents can set up a foundation, allowing them to avoid taxes. Foundations also minimise requirements to file returns or accounts and guarantee anonymity for the investor.There is no need to keep accounts or submit financial statements if the foundation does no business or trade. If the foundation qualifies as an offshore company, it is not subject to income tax or capital gains tax in Liechtenstein. The only requirement is to maintain an "office" in Liechtenstein, but this can be a mailing address.

THE identities of wealthy British tax evaders will be…

The tax-free rich

From the Sunday Herald journalist Iain Macwhirter ...According to the BBC business editor, Robert Peston, the top 50 UK-based billionaires paid just £15 million in tax last year on a combined fortune of £126 billion. In fact, most accountants say that for the modern rich - the 4000 Britons earning over £1 million a year - taxation has become largely voluntary, as there are so many ways of avoiding it. The man likely to take over Northern Rock this week, Richard Branson, is a champion in offshore tax farming... ...This impoverishment of the middle classes has been disguised by the boom in house prices which gave people an illusion of wealth, as they were "eating" their houses by equity withdrawal - another name for debt... ... As people find out more about the way banks have been manipulating the system to pay themselves stupendous bonuses, attitudes are hardening. British society is no longer in thrall to wealth. Only this time it's the middle classes, not just the workin…

Tax and the rich 2

More than a third of Scottish farms sold this year have been snapped up by cash-rich businesspeople anxious to avoid paying inheritance tax .

According to the annual Scottish Estates Review by property agency Strutt & Parker, the number of farm buyers who cite IHT as a reason for their purchase reached 36% this year.

Prime Scottish arable land has now more than doubled in value since 2004, selling for at least £3,500 an acre, compared with £1,600 three years ago. Farmers have traditionally been allowed to pass on their land to their children without the value being calculated for inheritance tax purposes. Any assets above a threshold of £283,000 are normally taxed at a rate of 40%, but farms are excluded so that they do not have to be split up to pay death duties.

But the tax break is now being exploited by wealthy investors.

"These are people with maybe £20m, £30m or £40m and they are looking for ways to shield that money from IHT in the future. They are buying farms and shelter…

Tax and the rich

The Treasury has admitted its plans to clamp down on super-rich non-UK domiciled taxpayers are being hampered by a lack of reliable data

A little more than 15,000 people are thought to have a combined wealth of £140 billion, and that includes £65 billion attributed to a small number of super-rich.

The combined taxable annual income of this latter group is estimated at about £1.9billion and "non-dom" rules allow these people to avoid a £600m tax bill. The Treasury has estimated that it is losing £1billion a year to the "non doms".

Tax sharks

Almost a third of the UK’s 700 biggest businesses paid no corporation tax in the 2005-06 financial year as reported here .

Another 30 per cent paid less than £10m each, an official study has found.

According to a National Audit Office analysis of the tax raised from the 700 companies handled by the large business service of Revenue & Customs 50 businesses, or 7 per cent of the 700, paid 67 per cent of the tax while about 220 paid none and another 210 each paid less than £10m.

Some tax experts were taken aback by the small amount of tax many of the companies paid. Michael Devereux of the Oxford University Centre for Business Taxation, said: ”It is certainly surprising.”

NOT so to the Socialist Courier , it isn't .

We reported in the Socialist Standard way back in June 99 that Rupert Murdoch's News Corp protected their profits by a series of complex financial arrangements involving off-shore tax havens—arrangements that have seen News Corp pay no net British corporation tax in 11…

Gap between rich and poor 'could cause riots'

One of Britain’s richest men has given warning that the gap between rich and poor could eventually lead to violence and rioting on the streets.
Sir Ronald Cohen, founder of Apax Partners, the private equity firm, and a close ally of Gordon Brown, said in an interview that if people are “left behind” in the race to accumulate riches, Britain could see a repeat of the Paris riots two years ago.
Sir Ronald Cohen , a big Labour donor who has an estimated £260 million fortune, highlighted his concerns about the future for Britain’s haves and have-nots, saying that the widening gap was "something to be concerned about".
He said: “Entrepreneurial economies which have high rates of growth and high rates of job creation do lead to great divergences in wealth.When economic situations get bad, it takes a spark to ignite a violent reaction.”
His spokesman told the newspaper later: “He was referring to how when people get left behind, when young men get left behind, for economic or welfare…

Not such a taxing year for some

My , isn't the State generous to certain capitalists .

The Aberdeen -based oil and gas company Venture Productions have had a boom-time in 2006 with a 50% increase in output helped by bringing fields onstream and strengthened by acquisitions. It averaged a net production for 2006 of 44,706 barrels oil equivalent daily and conducted a £153m takeover of CH4 Energy .

"2006 was a record year for Venture and we have continued to make great progress in increasing both production and reserves," said chief executive, Mike Wagstaff.

In September it announced a profit of £97.7million in the six months ended June 30 .

YET:-

Venture said it probably would not have to pay any tax on its 2006 profits after claiming 100% tax relief .