

















From the BBC:



No longer.







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  1. Milton Arbogast

    If the poor of the world can be kept under the tyrant’s heel–and everything we see out of Egypt indicates that they can–then the game is over. Louis XIV would be proud.

    It has always been the game of the aristocracy to exact the most punitive taxes they are capable of on the poorest they can find.

    Birth. Find the group that believes they are entitled by birth and you have found the heirs of Louis.

    Oh, and watch the Oscars to see an apology for the aristocracy that will make you head spin. “The King’s Speech”, that paean to Kingship, will win them all. Pygmalion meets Louis XIV.

  2. a

    As much as I would like to get excited about this, I don’t see any estimates of how much money the British Treasury will lose (if anything) with this change. Does someone know or have a guess?

    1. Richard Smith

      If it works as intended it will be other Treasuries that lose out, not the UK one.

      That is where the race to the bottom starts. These tax regimes are analogous to beggar-my-neighbour currency policies. At best we just irritate the hell out of our neighbour states; which leaves us friendless if we get into trouble: consider the renewed Euro pushback on Ireland’s tax regime for a parallel.

      So these are qualitative arguments initially, not quantitative ones. You should be able to see the dynamic.

  3. attempter



    So this is the government itself openly calling the banks terrorist organizations holding society hostage, like in any number of James Bond movies. So why aren’t we dealing with them as such?

    Obviously the governments themselves are flunkeys of this criminal network and are there only to carry out the looting, and to do so with increasing contempt for the very concept of democracy:


    (“Clamour” – there’s a typical MSM characterization.)

    That and the various con games the governments are running demonstrate clearly how these are not responsive democratic governments but mere corporate adjuncts which have voluntarily abdicated all legitimacy.

    So the only option left is for the people to recognize the obvious and take their polities and economies in their own hands. There’s no disputing the facts about the corporations and their government lackeys. These are nothing but criminals who intend a totalitarian debt-slave economy. I defy anyone to offer a more plausible theory which fits the evidence.

    So the only choice is to reject this system or submit to this enslavement.

  4. killben

    Banksters and Politicians love suckers and who better than tax-payers. Pile on the tax-payers ….

  5. jpe

    The UK is moving closer to a pure territorial system, more in line w/ France and away from something like a US worldwide tax system.

    re: tax havens: per the HM Treasury proposal, the current anti-anti abuse regime will be applied to the new territorial system, and new anti-abuse rules will be designed to prevent corps from siphoning income off to low-tax jurisdictions.

    The devil will be in the details, and until those details emerge it’s too early to say whether this proposal will be a gift to companies or not.


    We’re one of the few countries w/ a worldwide tax regime; moving closer to a territorial regime has been kicked around for years and years and years. It’ll be kicked around again (Obama has supported moving our international tax rules to be more aligned w/ EU tax systems).

    1. Tim

      My personal opinion is that the US will fight hard to keep its worldwide based system. Having said that more and more countries are moving to a territorial system. Canada for example moved towards a territorial system starting in the 1970s and has only accelerated their move in the last few years.

  6. john bougearel

    Excellent piece here.

    Japan announced a 5% corporate tax cut from 40% to 35% in Dec 2010. I did not know that the UK is phasing in corp tax cuts from 28% to 24%.

    Yves, you are right, there is a race to the bottom to cut corp tax rates and the US is joining that race as of the past few weeks.

    From Bloomberg yd,see

    • Obama Seeks Business Support for Changing `Burdensome’ Corporate-Tax Code:

    President Barack Obama called for businesses to join him in an effort to change a “burdensome corporate tax code.” Too many businesses end up making decisions based on what their tax director says instead of what their engineer designs or what their factory produces,” Obama said, according to prepared remarks. “This puts our entire economy at a disadvantage.”

    Obama reiterated his call from the State of the Union address on Jan. 25, in which he announced his support for cutting the 35 percent top corporate tax rate without increasing the federal budget deficit.

    The relationship between Obama and the Chamber will be central to efforts to overhaul the tax code, because they can shape the framework of the debate in Congress, said Mel Schwarz, a partner at the Washington national tax office of Grant Thornton LLP.

    When Japan lowers its corporate tax rate this year the U.S. rate, when combined with state and local income taxes, will be the highest in the world.

    Also see:
    * Obama Says U.S., Business Must Work Together as Competition Grows `Fierce’

    As a government, we will help lay the foundation for you to grow and innovate,” Obama said in the text of his remarks. “But I want to be clear: Even as we make America the best place on Earth to do business, businesses also have a responsibility to America.”

    The forces of globalization have changed the way businesses operate and the way they hire, Obama said. Competition has “grown fierce,” he said.

    Back to me: “If the US cuts the corp tax rate in 2011, corporate margins will continue going through the roof. That will create illusion will be that US companies are firing on all cylinders and doing great, and thus able to hire more folks.

    But, nary a job will be created in the US by this corp tax windfall if the offshoring and globalization incentives are not simultaneously removed. Most of the windfall benefits to the jobs market will be in overseas markets.


    But, like MSM in the UK, this move to cut the US corp tax rate will be lauded as a net positive for the US economy. However, the move to cut the US corp tax rate will be billed as a move targeted towards job creation in the US jobs market. Unfortunately that just isn’t going to happen unless offshoring incentives are simultaneously removed. If O is going to cut the corp tax rate, fine, but there must be some quid pro quo that will boost the US jobs market rather than the jobs market overseas.

    *Bloomberg was not snookered by the UK chancellor’s be tough on UK banks:

    ““Without this bank-bonus tax — and with the banks set to benefit from a corporation-tax cut — George Osborne has actually delivered a tax cut for the banks compared to last year, even after today’s announcement,” Balls, who today faces Osborne in the House of Commons for the first time since his appointment, said in an e-mailed statement. “This panicky announcement seems to be a fig leaf to hide George Osborne’s failure to get a deal” with the banks on pay and lending.

    “The effort to present this bank levy as a punishment for the banks is pathetic, the money returned to the Treasury is a pittance, while bonuses are chucked around like confetti,” Len McCluskey, Unite’s leader, said in an e-mailed statement. “This levy does nothing to fundamentally reform banking in this country.”

  7. john bougearel

    Yesterday Yves Linked to a great article on “UK Uncut,” a decentralized and very effective grassroots movement protesting tax-evading companies in the UK. It was a fascinating read.

    The grassroots UK Uncut campaign that got underway and caught a bit of buzz and fire through social media “Tweeter” of all things.

    The UK Uncut grassroots campaign model is one that can be assimilated anywhere in the world where corp tax evasion runs rampant.

    Google “Everyday Brits Are in Revolt Against Wealthy Tax Cheats Can We Do That Here?” to read the article

  8. m-ga

    I’m a bit confused by this.

    We’ve got the UK tax cut on corporations hinted at today, and also the tax cut described here:

    in which tax on offshore finance operations are cut to a third (so, down to 8% from 24%).

    Are both of these the same thing, are they different, or is today’s announcement an extension of the earlier one (ie. the earlier discussed 8% rate being reduced to zero)?

    As a further question, what would happen if corporate tax was cut to zero across the board. Or, in other words, why should corporations pay tax in the first place? For example, it could be argued that all taxation should be raised from tax on individuals, Corporations are not people, and therefore shouldn’t pay tax (I know that corporations have the same legal rights as people in many senses, but that’s tangential for now).

    I’m having some difficulty countering this, even though I’d like to. About all I can come up with is that corporations use services such as courts and the police, and they should pay for these. I’d like to make a stronger argument. For example, you could counter that corporations are beneficial to all (ie. swallow free market theory wholesale) and therefore that it is acceptable, indeed desirable, for us to fund the infrastructure needed for them to prosper and therefore they get free court services, policing, protection by the military and so on. Everything else is privatised, as it should be.

    This is a really extreme viewpoint, along the lines of Murray Rothbard or something. But it looks like a desirable end game for the UK government. Unless I’m misunderstanding something.

  9. KnotRP

    It’s ironic that the lowest common denominator is set by a Centrally Planned government where they don’t even go
    through the motions of voting before the plan is applied to the populace.

    That’s the “optimum efficiency” point the elite is aiming at.
    Sure hope they have their cups on, because an angry
    populace doesn’t respond in a linear way to abuse.

  10. Charles Kiting


    The stimulus will require borrowed money, which will be a lot more expensive after debt renegotiations/writedowns.

    I agree with the renegotiations/writedowns, but they have a cost that can’t be ignored.

  11. ang

    My impression is that the renegotiations/writedowns needed are for private sector debt, in which case public debt fueled fiscal stimulus wouldn’t really be more expensive.

  12. scratch

    Project Merlin; serious skullduggery indeed. Typical tory filth, bending over for the chaps and it makes me want to throw up. And to have that little establishment rat Preston straight on the wires telling everyone that “the bankers are livid” makes my blood boil…livid over 800mln, i wouldnt think so? The British electorate are squarely in the dock over this, how could they be so foolish, how could they be such fools?

  13. Schofield

    Who needs government interfering in our lives say the Republicans lying through their teeth. The reality is the rich have needed governments from time immemorial to give them low or no taxes, tax havens, minimal tax inspection, production subsidies, advantageous trade agreements, minimal pollution controls and enslaved low wage workers. In the UK the former Neo-Liberal New Labour started the tax scam ball rolling allowing Multi-National Corporations head-quartered in the UK to escape UK corporate tax for their subsidiaries earnings from abroad. They also slashed the tax evasion staff at the government’s Revenues and Customs service. The Conservative led Coalition Government is now extending the corporate tax break to Multi-National Corporation branches abroad and yes they are slashing tax evasion staff too. 50% of the Conservative Party funding comes from the financial sector. Where have you heard that one before. Yep. Yves is right it’s a race to the bottom to strip taxation off the backs of the rich and their corporations and load it up real heavy on the backs of the peasants. Austerity programs here we come in the USA led by the Republicans and given the nod by the charlatan Obama.

  14. Francois T

    My question is: Why? Why is David Cameron government willing to take such an enormous political risk in the name of kissing the banksters’s kigaling?

    I mean, unless they’ve been promised a lump sum or very plush job when they leave politics, or mega contributions of campaign cash for the next decade, this smells like the most stupid political risk to take right now.

    Unless they’re convinced it can be done, John Q. Public be damned. Rather unlikely: after all, UK journalists are far better at speaking truth to power than all the farcical imitators of National Zimbabwe TV anchor-bagwans we’ve got as political pundits in the USA.

  15. Confused

    What am I missing? Putting aside the propriety of paying a corporate tax as a national services user, won’t this encourage returning profits domestically to England?

    Re-Patriating Profits

    Current Situation: Tax Rate Country A + Tax Balance = Tax Rate UK

    Effect: Companies encouraged to shelter their profits abroad and not re-repatriate them to avoid the “Balance” Tax

    Proposal: Tax Country A + 0 = Tax Rate UK

    Effect: Companies subsidized by tax expenditure to repatriate profits?

  16. Stevie b.

    Yves – dare I…dare I think you may be getting… confused?
    George Monbiot is an -environmentalist- & not an -economist-…and like Monbiot, the Guardian is a left-wing paper with a Labour agenda, so I’d treat them both together with a meaningful pinch of salt.

  17. BigBadBank

    Utter rubbish.

    It would be politically impossible for George Osborne to carry out the plan you impute to him and I doubt he would wish to. In fact the only thing he is good for is stubbornly focusing on keeping our deficit down and reducing the corporate tax take to zero would hardly help with that.

    We have a small highly indebted economy and the bond vigilantes are all too close. Do not project the ignorant and greedy madness of your broken polity onto ours.

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