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back to article 'It’s called capitalism. We are proudly capitalistic. I’m not confused about this'

This was the week when the Snoop Charter to implement 1984 conditions on Brits online was scrunched up into a tiny little ball and punted out the door by MPs and peers. After being roundly criticised by pretty much everyone, Theresa May's plan to give thinkpol law enforcement and spooks access to Blighty's internet activity was …

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capitalism

I'm sorry, I'm confused.

I thought that capitalism was getting bailed out by the State when you showed obvious signs of being declared bankrupt.

Maybe Adam Smith could help us out here.

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Re: capitalism

Capitalism can't be bailed out by the state, the state doesn't produce anything to bail anyone out with

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JDX
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Re: capitalism

They bail them out with taxes gathered from the capitalists :)

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Re: capitalism

No, they bail them out with taxes gathered from normal people who can't divert their income to Luxembourg or the Caymans.

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Re: capitalism

I don't think 'normal people' quite captures their situation; 'tax serfs' conveys it more accurately. Still, they keep voting in the machinery that robs them, so i guess it must be fair.

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Mushroom

Re: capitalism

no,no no!

They bail them out by printing a few billion extra notes and handing them over to the capitalists.

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JDX
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@nichomach

>>No, they bail them out with taxes gathered from normal people who can't divert their income to Luxembourg or the Caymans.

A rather poor piece of sarcasm, since the majority of companies in UK aren't multi-national corporations using such tricks.

And of course, it's capitalism which gives people their salaries to tax anyway.

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Re: @nichomach

Salaries still exist in socialist and mixed economies, and currently it's rather the work of the people who can't dodge their taxes that contributes to the profits of the people and organizations that do.

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Re: @nichomach

And all the time taxation is based on profits / earnings and other such ambiguity, rather than the services / value received from the community, this will continue to be the case. The people stuck paying the taxes will be the ones stuck in a government services situation they already pay a market price to others (the rich) for.

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Re: capitalism

The term "capitalism" is used to denote collusion between the state and corporations by the socialists, and free market ideology by the libertarians.

In my opinion, the main problem is not so much an "-ism", but more that most countries are way too large, so that most people cannot judge the state of the nation, and so consequently there is not enough resistence to the unsustainable growth of government that most parts of the world have seen over the last century, and which is now 'coming home to roost'.

We need to restrict countries to be about the size of Liechtenstein or Iceland, to keep ambitious politicians in check.

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FAIL

"That's right Reg readers, unless you're some sort of a dirty socialist, you should be totally cool with firms avoiding any sort of payback to the customers, economies and countries that guarantee their success."

Errr what? Who said that? I completely support Schmidt's statement - he's completely right. But does that mean I don't think that Google should be paying more tax in the UK, of course not! To blame Google for operating within the law is plain stupidity; Politicians calling them "immoral" are simply trying to shift the blame from their own incompetence when it comes to setting the tax rules that allow this.

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Is the Reg base socialist then? I thought beardy Linux types were traditionally liberals?

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If people want to complain about this they should be SCREAMING at the corrupt and easily corruptible politicians that set the rules. Better still, stop voting for the bent bastards.

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It’s called capitalism. We are proudly capitalistic. I’m not confused about this

Good on you. Don't act all mock-guilty about it and fumble with your thumbs - if you did it for a reason then stick to your guns,

It's not evil to follow the law. Those who are upset about this perfectly reasonably - spend your time boycotting the government to change the laws, not beseeching corporations to donate more tax.

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Re: It’s called capitalism. We are proudly capitalistic. I’m not confused about this

"It's not evil to follow the law."

This is so wrong I think my head might explode. The law is perfectly capable of allowing evil, whether it's slavery, rape of single women, or the gassing of minorities.

Google (and others) are acting fraudulently in a moral sense even if they are not breaking the law (as decided by some unelected oaf somewhere in a wig).

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Re: It’s called capitalism. We are proudly capitalistic. I’m not confused about this

You are the one mixing up morality and legality The tax system is not a moral system, it is nothing but a legal technicality and is designed as such to remove ambiguity. Moraly, people are assumed to have done their duty by paying their taxes. Rape, slavery etc are moral issues which go beyond any technicality of law

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"acting fraudulently in a moral sense"

Good soundbite, you sound like one of those overly earnest middle-class students who puts on rags to sit and protest with an iPad in their satchel and an iPhone in their designer skinny jeans.

You don't have an ISA do you?

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Re: "acting fraudulently in a moral sense"

I don't have an ipod and i'm not student

Do you watch a lot of daytime tv?

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JDX
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Re: "acting fraudulently in a moral sense"

What's TV got to do with it. Are you a tax-dodging ISA fraudster?

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Re: "acting fraudulently in a moral sense"

I dodge taxes, in that if i put enough effort into it i could probably be taxed more - I also 'dodge' stubbing my toe on furniture and walking my face into the edge of doors

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Re: It’s called capitalism. We are proudly capitalistic. I’m not confused about this

You can't mix the two up, they are the same - laws are there to protect our moral standards!

As a society we think it is immoral to steal/hurt other people - that is why we have laws to protect us (from the immoral people).

If someone is following the law, but we think they are still being immoral that means that the law need to change to reflect our standards.

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Re: It’s called capitalism. We are proudly capitalistic. I’m not confused about this

I don't think someone is being immoral by not choosing to do something the government charges them for doing. Your moral standards make no sense

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Re: It’s called capitalism. We are proudly capitalistic. I’m not confused about this

"Rape, slavery etc are moral issues which go beyond any technicality of law"

That was my point - being legal does not make them less evil.

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FAIL

Freedom goes both ways...

There's a system & Google is playing it. Good for them. Freedom's wonderful, isn't it?

And of course, we are equally free to point out that Google has earned a lot of money and intends to keep as much as it can for itself, while we, the people who need that money and created it in the first place have to use our own money to pay for government services since Google won't be contributing to that.

We also have the freedom to point out that Google, whose motto was 'Don't be evil', has become another parasitic corporation. And we have the freedom to cheerfully wreck its reputation, refuse to use its services and tell all its advertisers that we won't be buying their goods & services because they're advertising with a morally-repugnant organisation.

Isn't freedom wonderful?

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Re: Freedom goes both ways...

And i'm free to point out your use of the word 'evil' to describe doing exactly what practicality and law indicates should be done, doesn't make much sense at all

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Re: Freedom goes both ways...

Well, you're free to point out that *you think* his use of the word 'evil' doesn't make much sense. And you're free to explain your reasoning, if you don't mind making a prat of yourself in public. Very generous of you to do so, saying that you believe that any act that is practical and within the law is de facto not evil. I'd love for you to expand:

- why does practicality have a bearing on whether an act is evil or not?

- do you believe that the law perfectly reflects (defines?) what is evil or not? if you do, there's a whole bunch of subsdiary questions to work through, eg how do you explain changes in time and between countries in law? does something that is evil in one country become not evil in another country because the law has changed? are laws that sanction acts such as killing of people because of their skin colour evil or not evil? etc

If you don't, then you need to explain why you've not acknowledged a category of acts that are evil but not illegal.

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parasitic?

That suggests they don't provide a service. This is clearly tosh whether you like or hate Google.

Perhaps focus your arguments on accuracy rather than how emotive you can make them?

As for "the people who need that money"... oh please.

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In other news...

...an unknown number of evil games companies will defraud the country by applying for the tax break that the government has just brought in.

Seriously - I'm not particularly happy (understatement) that large firms don't pay more tax - but the answer is to change the rules not get the arseache when they follow them. Fewer rules and hence fewer ways of gaming them might be a start .

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Re: In other news...

Exactly. It is not Google's fault our tax code was written by dishonest lawyers and dribbling morons

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Re: In other news...

Right with you. People can argue the moral argument all day, but at the end of the day it's the legal one that rules out. Honestly ask your lawmakers when they wrote this law that they couldn't see this happening. Hell, your lawmakers probably designed it this way to help move their and their buddies money in to tax shelters. Now their antics have come to bite the economy as a whole.

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Re: In other news...

"Exactly. It is not Google's fault our tax code was written by dishonest lawyers and dribbling morons"

Well, isn't it? Who's spending the lobbying money to get the laws written that way? It's not me; I doubt that it's you.

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Wooah there. take a step back; there is no 'action' or 'act' here. Google's supposed misdemeanour is a failure to do something that might have helped others - failure to do tghis thing is not only legal and moral, but the government actively deters people from engaging in this action by fining (taxing) them when they do it.

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Anonymous Coward

Follow the law to the letter or follow its spirit?

That's pretty much the question. It's rather obvious that multinationals set up complicated webs of companies for the sole reason of tax avoidence. They know they are following the letter of the law while crapping all over its spirit. I feel identifying this as evil is quite appropriate.

I agree the best way to handle this appears to be to improve the laws and make tax avoidance harder. On the other hand, crafting laws without loopholes is probably as achievable as writing software without bugs.

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Re: Follow the law to the letter or follow its spirit?

Imo it takes continuous effort by thousands of lawyers and politicians to make and keep our tax law as useless for purpose and unjust as it is presently

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Capitalist love capitalism

until that all important part called 'competition' shows its ugly head and they run cap in hand to the governments they despise for help.

I personally don’t think that Google, Starbucks et all have done anything illegal - unless you can prove they helped write the loopholes in the laws by actually breaking any. But why the City of London still has a legal right to see the prime minister or the head of state (that’s the Queen in this case) at short notice is an interesting thing.

If capitalists really believed in capitalism we wouldn’t have any of the banks we have at the moment - or most of the financial institutions either.

Except maybe the Co-op and the Giro.

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Anonymous Coward

We encourage capitalist behaviour. Own entire world system depends on it. I'm not sure why it's become the responsibility of the companies to moderate it. I thought that's what politicians were for. Was it Cameron throwing the word "immoral" about? As our tax regime is ultimately his responsibility, is he being mendacious or incompetent? How can a multi-national company be expected to cope with some as vague and socio-geographically various as morality? This is why we encoded rules into our lives in the first place.

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Cameron is being mendacious. The reason this is being framed as the moral responsibility of the taxed is to avoid the question of much needed tax reform. People are being led up the logical cul-de-sac of blaming / accusing companies who have no power to initiate reform

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Stop

Corporation tax is not the only tax!

Don't Google employ people in the UK? Don't these people pay income tax etc.? Don't all products sold om the UK have VAT levied? The UK govt. gets plenty of tax from Google and Starbucks and Amazon etc. This is just a case of political grandstanding.

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FAIL

Re: Corporation tax is not the only tax!

You are right, it isn't!!

But, re-read what you posted, taking note of the emphasized words, and my comments afterward:

Don't Google employ people in the UK? Yes, they do.

Don't these people pay income tax etc.? Note the operative words these people, that being the employees - from their salary! As far as Google (or any of the others, for that matter) is concerned, it is the same expense - wages and benefits. Oh, and don't start on the employer benefit taxes, those are taken into consideration when setting salary.

Don't all products sold om (sic) the UK have VAT levied? And, guess who pays those taxes the purchaser of those products, not the merchant!!!

The UK govt. gets plenty of tax from Google and Starbucks and Amazon etc. It depends on what taxes we are speaking of, taxes on profits, or taxes collected by these companies from the purchasers of the products they sell. The latter does not come out of their (Google, etc) pockets.

This is just a case of political grandstanding. On this, to some extent, we agree!

Icon because, well, it should be obvious!

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FAIL

I think Schmidt IS confused about this

Capitalism is a system where the means of production - the capital if you will - are owned by one group of people (the capitalists) who then hire another group of people (the workers) to use the capital to create good which are sold for profit.

It has nothing to say about "maximizing shareholder value" (there might not even be any shareholders). It says nothing about whether avoiding tax is good or bad (and Adam Smith would say it's bad, because it gives advantage to companies with good lawyers, rather than good products, and Smith wanted the competition to be between products so as to yield the greatest good for the greatest number).

Schmidt was confused. He should have said: "It’s called greed. We are proudly greedy." But that wouldn't sound so good.

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Re: I think Schmidt IS confused about this

It's the government's responsibility to create a tax system that rewards production rather than lawyering; not a company's responsibility to pay tax they need not pay

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"...no doubt unintentionally..."

Sounds like civil service speak for "you mendacious cow, that's a pile of crap, did you really think we're that stupid?"

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Holmes

Socialists are by definition mathematically illiterate, because they can't balance an equation.

All tax you charge corporations eventually gets passed onto the customer as higher prices for the tax and admin costs, as it is with VAT; excessive tax encourages business to leave and make a base in lower tax countries, this drastically reduces tax income.

No tax is free, the cost is always passed on in some form or other, the politicians are either lying to you or morons when they suggest otherwise!

This is the tragedy of a modern democracy, it ends up being run by career politicians and mandarins who have bribed the population with 'free' benefits so that they can stay in power and loot the taxes; so they keep growing the drain on the economy until the lenders dry up, taxes are too little, so the country eventually has to default and instantly make all the now dependent Zombie Socialist Suckers much poorer!

Given the rate that state debt levels are rising, I expect that a default of some form will happen within a decade, so I'm busy storing my savings in something of genuine value, so that I don't suddenly end up much poorer as the pound suddenly devalues even faster.

If you are not averaging at least 10% annual gain on your investments or other savings (you do save?!), over the years, you are a sucker paying the inflation tax. A lot of inflation is hidden from you by BS government statistics, sly product manufacturers, and sly retailers.

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Nations reap what they sow.

If Nations and States would work together and set the same tax rates, not offer subsides or rebates then they wouldn't have these problems. But they don't. They all chase corporations, begging for them to set up shop.

Of course the multinationals will move the money around, everything they are doing is legal. If the politicians didn't like it they would change the laws.

Bastards are clever. Goverments should stop complaining about their broken business models and come up with taxation laws that prevent this. : )

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Paris Hilton

Okay (just in case ...

... any one missed it)

In the UK I want to buy something that costs £1.00

I have to pay £1.20 because the thing probably attracts value added tax (VAT) at 20%.

In order to have £1.20 to spend one needs to have earned £1.56 making allowances for National Insurance (NI) and income tax paid on a pay as you ear basis (PAYE).

In other words: buy something for £1.00 means giving the UK Treasury £0.56

The above assumes VAT, income tax (PAYE) and National Insurance but there are lots more taxes, duties and contributions on top of those probably taking UK tax burden to about 1 on 1 (every £1 spent means giving £1 to they Treasury).

The only way forward is contra inflationary reductions to all UK taxes of all kinds. The inflationary model just makes for more tax costs, less competitive nation and top heavy government civil servantia

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