Re: Corporation tax should be abolished
Why do shareholders and other investors allow it to pour money into the UK, when it's barely profitable?
Why? Capital gains. The annual earnings that could have been profit are instead ploghed back into growth, allowing the firm to make even more money later down the line.
Thanks to the foolery with the UK tax system, it's actually way better from a tax perspective to make capital gains over dividends.
large multi-nationals are strangely reluctant to show territorial P&L in their consolidated accounts because that would show places like the UK are likely very profitable
No, they aren't. See my earlier post on Lout UK vs Lout Cook Islands etc for why. They do raise a lot of revenue here, but revenue is not profit. You seem to grasp this further down your own post:
"So hardly suprising the UK makes very little profit under that kind of arrangement, and then there are all the other tricks, like intercompany loans, trading, IP licencing etc etc."
Those are the kinds of tricks that allow coffee shops to survive, despite buying the world's most expensive coffee beans.. Unless you're a smaller coffee shop that can't afford to buy those ultra-premium Swiss roasts.
My local independent coffee shop does exactly this. They pull the same basic tricks as Starbucks et al do. The bigger multinational chains make damn sure that nobody using the same loopholes as they do loses a case in court - That's how the RIAA managed to kill Napster etc, by allegedly stooging a case which the defendant then lost, thus setting a precedent.
Nothing will change quickly because it's not something national goverments can really fix, ie international tax treaties and accounting standards that permit this kind of global piss-taking.
Absent a global flat tax for both people and corporates, which ain't ever going to happen, it's impossible to "fix". Should the company in Holland really not be paid for it's creative IP? Should the importer in Denmark not be paid for their work? And the bean roaster in Italy, should they not be paid? Why should the UK coffee shop be made to fund the operational costs of the entire supply chain? Obviously, if the same multinational "owns" all of the entities, it encourages price elasticity in the supply line, but that can be very hard to prove.