Money in the news and how you are going to pay and pay and pay
One of the amusements of recent times has been watching the tax campaigners like Margaret, Lady Hodge, huffing and puffing about how terrible it is that Amazon doesn’t pay much tax here in the UK. And it’s true, it doesn’t. But there is actually a good reason for this: Amazon doesn’t make much in the way of profits either:
Amazon, the US retail giant, has revealed its lost nearly $500m in the past three months, the largest amount in its history.
Shares in the company dropped 11pc in after-hours trading, wiping more than $15bn off the value of the company. The company increased sales by a fifth to $20.58bn in the three months to October, but it plunged $437m into the red as it spent heavily on new projects. That figure is more than 10 times the $41m loss Amazon reported in the same period a year earlier.
We’re generally told that the solution to the way that Amazon dodges UK tax is to adopt something called “unitary taxation”. This means that we entirely ignore all the various dodges and loopholes they use internally. We simply look at their sales around the world, the profit they make around the world, and say that if 10% of sales are in one country then so are 10% of profits. A reasonable enough system you might think.
But look at what happens here when we talk about Amazon: exactly the company that the tax campaigners have been saying this rule should be applied to.
The UK is about 10% of Amazon’s sales. So, therefore, 10% of Amazon’s profits (or losses) must be applied to the UK. So, in the last 3 months Amazon has, under this system, lost $50 million in the UK. And companies that lose money in the UK do not pay profit tax in the UK.
So, Hodge and those campaigners, all of whom are screaming for Amazon to pay more tax, are really arguing that amazon shouldn’t be paying any tax at all. Rather sweet of them really, isn’t it?
Asda is about to find itself having to explain a slightly uncomfortable set of facts: the men in its warehouses who load up the trucks get paid rather more than the women who unload the trucks onto the shelves do. And, since it can be argued that loading and unloading a truck is rather the same thing then, given that it’s mostly men doing the one, and getting paid more, and mostly women doing the other and getting paid less, then therefore this is sexual discrimination.
And that’s exactly what is being alleged:
Legal firm Leigh Day said it had been approached by 19,000 people – mostly women – after it announced it was taking action against the retailer.
The legal business said the case centres around women employed in Asda’s stores being paid less than male colleagues doing a similar work in its distribution chain.
“In the supermarkets the check-out staff and shelf-stackers are mostly women,” said Michael Newman, an employment law specialist at Leigh Day. “The people in the warehouses are pretty much all men. And, as a whole, the group that is mostly men gets paid more.”
“Our investigations suggest that the jobs are pretty much the same, in that warehouse staff are responsible for taking items off shelves, putting them on pallets and loading them into lorries.
“In the supermarket, they do the reverse: taking the pallets off the lorries, unstacking them and putting the items on the shelves.
“Where the jobs are not similar, we still think they are of equal value.”
Paying people for the same work differently is illegal of course. Illegal if it’s based upon such things as gender or race that is. There is another view possible, of course there is:
An Asda spokesman said: “A firm of no-win, no-fee lawyers is hoping to challenge our award-winning reputation as an equal opportunities employer.
“We do not discriminate and are very proud of our record in this area which, if it comes to it, we will robustly defend.”
And then there’s the more nuanced view that an economist might offer. Those warehouse jobs are indeed largely being done by men. Those instore jobs are indeed largely being done by women.
The obvious assumption is that there’s something about either end of the work that preferentially attracts (or repels) men and or women. None of us do think that Asda is being stupid enough to insist that only men can work in the warehouses, or only women in the stores: that’s so illegal that we really don’t think they’re that dumb. so, why do we have this gender segregation? We can come up with all sorts of theories but the most likely one is that there’s a difference in the physical strength required. Manhandling a tonne or two of pallet onto a truck is going to be rather different from placing the tomato sauce bottles on the shelf. And that is one area where there really are differences between the sexes: men do have greater physical strength (on average and in general).
Quite how the case will play out no one is at yet sure: but I’d run with the lawyers trying it on as my own opinion.
DID you sign up for Bachelor of… degree? Did you borrow money to pay your fees? The UK is not America – yet, where sky-high college fees are an affront to ideal of freedom. B ut it;s getting that way. Higher education is big business. And you owe it:
It is likely that there are at least as many adult Americans with student-loan debts outstanding as there are living bachelor’s degree recipients who ever took out student loans. That’s right: as many debtors as degree holders! How can that be? First, huge numbers of those borrowing money never graduate from college. Second, many who borrow are not in baccalaureate degree programs. Three, people take forever to pay their loans back.
Some retire before the loan the paid off.
That pension pot is shrinking:
“A]n estimated two million Americans age 60 and older … are in debt from unpaid student loans, according to data from the Federal Reserve Bank of New York. Its August Household Debt and Credit Report said the number of aging Americans with outstanding student loans had almost tripled from about 700,000 in 2005, whether from long-ago loans for their own educations or more recent borrowing to pay for college degrees for family members. . . . While older debtors account for a small fraction of student loan borrowers, who have accumulated nearly $1 trillion in such debt, the effect of owing a constantly ballooning amount of debt but having a fixed income can be onerous, said Senator Bill Nelson, Democrat of Florida, chairman of the Senate Special Committee on Aging.”
Families need to pay more for food and have become ‘far too used to paying too little’, Masterchef judge Jay Rayner told MPs today.
The food critic and author told a parliamentary committee that food was too cheap to support British farmers.
He said: ‘We pay too little. We’re far too used to paying too little. And the only way we have at our disposal, I think, to secure a robust food supply is by investing in British farming and that does mean consumers pay more and look for that label.’
There’s four sets of idiocy here.
The first is that no one at all is insisting that you must buy cheap food. If you want farmers to have more money you can quite happily go out and buy more expensive food: locally produced, organic, free range, whatever tickles your fantasy. If you really want to you can just stick some cash money through the farm gate.
The second is that a robust food supply is not achieved by relying upon the farmers of one country to supply it. You might have noticed that there’s not been any famines in the UK for the past century and a half or so. Which is about the same time that we’ve been importing a decent fraction of our food. The connection between these two being that when the weather makes the crops fail in this country, as it still does from time to time, we’ve got other places to get our food from.
The third is that the falling real price of food is one of the things that has made us all richer in recent decades. It really wasn’t all that long ago, within my lifetime, that food made up 30% of the average poor families’ monthly budget. It’s now more like 10%: freeing up money to be spent on other things, making us richer.
And finally, the fourth, is that if British farmers can’t make a profit doing farming this is the universe’s way of telling them to bugger off and do something else other than farming. In short, there’s just too many people trying to be farmers.
Yes, Jay Rayner is being an idiot here.
The usual lefties and liberals are up in arms about the fact that Facebook seems to have paid no corporation tax here in the UK for a second year. There’s a couple of really very impotant points they’re missing though:
Facebook paid no UK corporation tax for the second year in a row in 2013, while employees received shares in the company worth tens of millions of pounds.
The world’s largest social media company reported a pre-tax loss of £11.6m in the UK last year, despite its US parent company reporting a net profit of $1.5bn (£900m).
The company employed an average of 172 UK staff, who were paid £40.8m last year, almost double the 2012 figure of £21m.
This is because of a £15.5m payment cost for “share-based payments”.
UK staff received 1.52m free Facebook shares worth $118m at their current share price of about $78.
So, why didn’t Facebook make a profit in the UK? Because it gave out shares in the company to the employees. And over in leftyland we always thought that was a good idea: you know, the workers owning the means of production and all that? And Facebook UK has actually given the workers absolutely all of the value created in the company: the workers get the lot, the bastard capitalists none of it. So why isn’t there singing and dancing in the streets?
And there’s one other rather important point to make: those workers will have been paying 45% income tax on most of that money that they’re being paid. And if getting tax revenue is what you’re interested in that’s a rather higher rate than the 24% corporation tax rate for that year. And if you do care about the tax revenue then getting more tax is better than less, yes?
It’s just difficult to see why people are whining so much.
It’s possible to surmise that the use of a dildo might turn a woman off more bipartisan forms of sex. Pleasuring oneself with the “Extra Large Mandingo” model could lead to a certain disappointment with the more regularly sized equipment provided by the average male. That Rampaging Rabbit’s ability to still be firm in 20 minutes of activity, the lack of required recovery time, might make the more normal masculine two minutes of squelching less appealing. But over and above that we’ve the possibility that the dildos themselves could be causing women to desire less sex:
Chemicals found in PVC flooring, plastic shower curtains, processed food and other trappings of modern life may be sapping women’s interest in sex.
A study has linked low libido with the additives used to soften plastics which are found in every home.
Women with the highest levels of phthalates in their bodies were more than twice as likely to say ‘not tonight dear’ as those with the lowest amounts.
The problem here being that phthalates are used to soften plastics. This softening meaning that they don’t have hard edges like the earlier artificial products like Bakelite used to have, and also that softening leads to their being warmer to the touch. Those are quite desirable attributes in the manufacture of sex toys and so all of those sex toys that are indeed made of plastic do indeed use phthalates. Where, of course, they are being introduced directly into the female body and thus, presumably, contributing to that loss of desire.
There are material alternatives, of course there are, for there were sex toys long before there were plastics. But wood (splinters!) glass (rather cold) stone (ditto) were all superseded by those plastics when they became available precisely because of those drawbacks.
But it is fun to see that modern dildos are actually solving the problem they were created to solve. Women not getting enough sex: great use this to have sex and you’ll want less sex in the future.
You and I might think that giving blokes with weak hearts Viagra so that they stride around with stiffies might not be all that good an idea. Which shows how much we know, eh? For the medical profession is urging exactly that: got a weak heart, get a stiffie!
A daily dose of Viagra could become a safe treatment for heart disease, researchers have said, after finding it improved blood flow.
The drug, normally used to treat erectile dysfunction, was found to prevent changes to the heart associated with disease.
Because it is already on the market and known to be safe, the researchers said there was no reason it could not be used immediately but said larger trials would be beneficial.
It’s not actually quite as stupid as we’ve made it sound. for there is a certain section of heart muscle that is very similar indeed to the muscles used to gain an erection. And Viagra works on those extremely similar muscles in exactly the same way, beneficially in both cases. So, for that particular kind of heart problem it’s not a bad idea at all.
But the real joy of this finding is that it brings the whole story full circle. For Viagra was originally designed as a drug to treat heart disease (a very slightly different kind that it’s now being touted for). And they found out, when they tested it on various groups of both male and female pensioners that the men didn’t want to give their extra tablets back at the end of the trial while the women didn’t are a hoot about that. At which point a little more investigation was done into why the men didn’t want to give the pills back and thus was found the effect. That the drug didn’t do all that much for the heart but it provided those stiffies that the older male can find so elusive. Especially, given the way that erections work, those that have heart problems find so difficult to attain.
Of course, Viagra has actually been treating heart disease all these years anyway. Even a few minutes now and then of gentle and stimulative exercise is known to have a beneficial effect upon the heart so those stiffies have been put to good use in the treatment of the more general condition.
This might be the finest offer of corporate sponsorship ever. It is simply, in it’s initial form, so perfect that the refusal of the donation is absurd. For what one of the porn sites on the web did was offer a donation to one of the charities dealing with breast cancer. More than that, it offered a sum of money for each video of boobies watched in the relevant, let’s all be aware of breast cancer, month:
In 2012, the Susan G Komen Foundation declined a donation from Pornhub.com which had raised one cent for every boob video viewed on the site,
WHAT to to with your library book if you catch Ebola:
A fiver for catching Ebola is a small price to pay when compared to the late return charges…
One of the founders of Greenpeace has hit out, yet again, at that organisation. The example he’s using of how Greenpeace has slipped its original moorings is that of golden rice. One of the big killers in the world is Vitamin A deficiency. And so a type of rice, this golden rice, has been genetically modified to produce it as it grows. This is entirely non-profit, there are no patents, this isn’t big agri-business. And half a million children a year die from the vitamin deficiency: so rolling out this rice would be a rather good idea.
Yet Greenpeace won’t allow it:
On the organisation’s position of golden rice, he said: ‘The thing about golden rice is it’s a least-favourable option and it doesn’t actually exist yet, it’s been many years in proposal and… it doesn’t work
‘The real solution to this is a proper, balanced diet like the home gardening initiatives in Bangladesh have achieved.’
That’s flat out lying. Golden rice exists and it’s good to go. But such is Greenpeace’s resistance to any GMO that they’d prefer that half a million children a year die than that their ideological purity be affected in any manner. There’s a word for bastards like that. So it’s not all that much of a surprise to see one of the founders of the group saying the following:
Dr Moore told BBC Radio 4’s Today Programme: ‘My problem with Greenpeace is they have lost any humanitarian roots they had.
‘When we started Greenpeace it was to stop nuclear war and the destruction of human civilisation, that of course is the “peace” in Greenpeace.
‘The “green” is the environment and that’s good as well, but they lost the concerns for humans… They have turned, basically, into an evil organisation.’
He gave the example of so-called ‘golden rice’, a crop enriched with vitamin A which supporters say would help millions of the world’s poorest people improve their diet.
Dr Moore said the fact that Greenpeace opposed the idea showed that they no longer care about people.
The Save the Whales part of Greenpeace is just great. But it would be a vastly better organisation if there was also a part of it that would turn it’s mind to Save the Kiddies.
There’s been a great deal of confusion over the years about Apple’s tax, what it pays, what it doesn’t and how it doesn’t. And there’s now been a change in the law that will impact, a bit, on one of the ways that it doesn’t pay tax. However, it’s not going to make all that much difference in the long run:
US companies including Apple and Google could be hit with demands for billions of dollars after Ireland yesterday unveiled plans to close the ‘Double Irish’ tax loophole.
However, a new tax break and pressure to tackle avoidance elsewhere in the world means US companies are unlikely to depart from the struggling eurozone economy.
Analysts and tax advisers predict that corporations which need access to the European Union’s 500 million consumers will find it difficult to set up equally effective schemes in other member states, as Brussels investigates other arrangements that involve paying minimal tax rates
No one’s going to move out of the EU over this, that’s obviously true.
But it’s worth thinking through what Apple used to do. The most important thing is that Apple hasn’t actually dodged any tax at all: it’s only delayed the date at which it might have to pay it. Yes, all the money they make in Europe ends up in Ireland and Ireland doesn’t tax it very much (the tax rate is about 2%) and the money ends up sitting in Bermuda, having paid very little tax at all.
But, and here’s the thing, Apple isn’t home and free, not just yet. Because in the end it wants to get those profits into the hands of the shareholders, the people who own the company. That’s what companies are for, to feed profits to the shareholders. and to do that Apple must move that money into the US: that’s just how the system works. And once it does that Apple will pay the 35% US corporate income tax, minus that 2% already paid. There is no way out of this: if Apple is to give the profits to the shareholders, which is what a company is form, then it will have to pay US corporate income tax.
So, the worst we can say is that Apple has delayed having to pay tax, it’s not got away without paying it at all.
This recent change does mean that Apple can’t use exactly the method it has been to do this. But there are plenty of other options (this is all about royalties for the use of the Apple name and technology, to add a bit of boring detail), for example, Holland has a 5% tax rate for royalties. So, instead of the Double Irish Apple could use the Dutch Sandwich instead. And that would mean a 5% tax rate, which is indeed higher than 2% but it’s still a lot less than 35%. So, we’ll still see those profits being parked offshore, just through a different network of companies this time.
Things will change, yes, but not very much.
And to be fair to him there’s a certain amount of evidence that Apple did indeed screw over important parts of the Finnish economy. The invention of the smartphone did screw over Nokia and that paperless computing environment is at least partially here which doesn’t help Finland’s paper making industry all that much:
The prime minister of Finland has blamed Apple for the economic downturn his country is experiencing which saw it lose its AAA credit rating on Friday.
Alexander Stubb said the remarkable success of the California-based tech giant has had a negative impact on his country’s two biggest industries – technology and paper.
‘We have two champions which went down,’ Stubb told CNBC on Monday.
Not only has handset manufacturer Nokia suffered due to the success of smartphones such as the iPhone, but Finland’s paper industry has also fallen on hard times.
The country is a key production site for Europe’s biggest paper producers, UPM-Kymmene and Stora Enso, but Stubb said the success of tablet devices like the iPad had hit the sector hard.
‘A little bit paradoxically I guess one could say that the iPhone killed Nokia and the iPad killed the Finnish paper industry, but we’ll make a comeback,’ he predicted.
That’s always the problem with any new technology, there’s people happily making a mint out of the older technologies being replaced and they get screwed. There weren’t all that many buggy ship makers left after the success of the Model T Ford either.
However, I’m not entirely sure that the iPad killing the paper industry is all that important. Years back, Alan Coren, when editor of Punch, told of how he’d gone to Finland to meet their paper suppliers. And he’d pointed to some trees and asked if they were for the paper they printed Punch upon. The Finns all fell about laughing and said no, no, these trees were far more valuable than that, these trees were to be made into toilet paper.
So if loo paper is more valuable than printing paper then why’s the Finnish paper industry having problems? Surely no ones wiping their arse on their iPads are they?
This isn’t a definitive diagnosis just a potential indication that we might have a problem here. But it’s possible that Alan Sugar has just gone stark staring. He’s arguing that however bad Ed Miliboy is as a potential Prime Minister what we should really do is bring back Gordon Brown.
Celebrity Labour peer Lord Sugar has called for Ed Miliband to be replaced as party leader – by Gordon Brown.
The Apprentice star said Mr Brown had been handed a ‘bad deal’ after taking over as Prime Minister from Tony Blair in 2007 just before the economic crash.
Lord Sugar welcomed the former PM’s return to the Commons today – where he spearheaded the Labour’s opposition to Tory plans to ban Scottish MPs voting on English laws.
He added: ‘I wish he’d come back as leader of the Labour Party to be honest with you.’
He told Iain Dale’s LBC radio show: ‘He took over from Blair in 2008 or 2007 when the real problems in the world economy broke and he got the blame, as far as England is concerned.
‘It’s absolutely wrong. It wasn’t his fault.’
Well, that’s not actually quite right. For the deal between Brown and Blair was always that Blair would do the posturing and the leading and Brown would do all of the economics bit. And he was Chancellor right from that first election victory through to taking over aw Prime Minister. We can’t really let the Chancellor of the entire previous decade off the hook if the economy falls over now, can we?
But there’s something else about this: we’ve had Brown as Prime Minister, we’ve seen him operate as Prime Minister and when we had the opportunity to vote on it we said “No, ta, someone else please”. And it’s not for nothing that Guido Fawkes refers to him as the Prime Mentalist.
On the other hand we might be able to read some runes here. If Sugar knows all of this and still prefers Brown to the Miliboy then just how sodding bad does he think Miliband is then?
OIL is tumbling in price. But rising in value.
Roger Boyes looks:
Cheap oil may yet turn out to be the food of love. Plunging prices will hammer shareholders in the big multinationals, and rattle the Emiratis, but they could also produce an extraordinary peace dividend. The course of war is about to change in Ukraine, Iraq and Syria — and Vladimir Putin, who has been busy rebranding himself as a generalissimo, may find himself confined to barracks.
To make the sums add up in Russia, Mr Putin needs to be earning between $100 and $110 per barrel of Brent crude. Yesterday it was down to $86 and all the signs from Saudi Arabia are that it could stay that way, perhaps for as long as 18 months. That’s a disaster for Mr Putin and his growth model whereby oil and gas profits were funnelled into the consumer economy. The failure should show the US that the most potent way of responding to Moscow’s aggression is to produce more oil and consume less of it…
Two years ago I attended a simulation game at an Israeli security conference, which imagined what would happen if an Iranian-backed group attacked a Saudi refinery, causing the oil price to rise to $250 a barrel. The conclusion was miserable: war, bread riots, coups in the Gulf. There was only one winner, and that was Russia.
Now the reverse is true. Russia, so heavily dependent on oil revenue, is a loser.
HOW capitalism works: the domain name Ebola.com is for sale. You can buy it for $150,000. Jon Schultz is selling. He also owns biurdflu.com and terror.com, which is nice.
Schultz, of Las Vegas-based Blue String Ventures, looks at domains through the lens of a gambler. It’s not what a domain is worth today, he advised in an interview with the Washington Post. It’s what it is worth tomorrow. “Our domain, birdflu.com, is worth way more than Ebola.com. We’re definitely holding onto that one for the event,” he said, referring to an outbreak he contends could be way bigger than Ebola, turning the owner of birdflu.com into a very rich man. “That one’s airborne and Ebola would never go airborne in the United States like bird flu can.”
Schultz bought Ebola.com for $13,500, in 2008.
It’s boom time, baby!
Well, we know that of course, for in the colloquial meaning someone who starts a European war that leads to the death of near 50 million people is of course a wanker if not worse. But we’ve new revelations about the Fuhrer’s love life that lead us to believe that this is literally, not just metaphorically, true:
the leader of the Nazi Party ‘would fortify his underpants with clean serviettes and then would go into some form of excitation with Eva Braun at a safe distance’.
He said: ‘I imagine Eva would stand a good distance away and lift her skirt and then there would be some sort of soggy climax on Hitler’s part and that would be that.’
So where does this stunning information come from?
Hitler and Eva Braun ‘had sex without touching each other or taking their clothes off’ because he was so fanatical about hygiene, says author Martin Amis.
Speaking at the Cheltenham Festival of Literature, the novelist claimed he believes the German dictator kept Eva at arm’s length and would achieve orgasm just by watching her lift her skirt.
He also claimed that Hitler was an asexual and may have had a similar kind of sexual relationship with his half niece, Angela ‘Geli’ Raubal.
Well, someone who is asexual does not get their rocks off by looking at some bird’s panties so we know there’s something wrong with this vision right from the start. And the truth is that these images leap, fully formed, from the imagination of a novelist. There’s absolutely no evidence whatsoever that any of it is true: along with the one ball thing actually.
This all tells us rather more about the fantasies going on inside Martin Amis’ head than it does about any historical figure. Interesting, for all that, but possibly more than we really wanted to know about Mr. Amis, eh?
Of course, all we citizenry like to have policemen walking our streets. Much better than them racing around in Panda cars where they can’t see anything, can’t hear anything and can’t do anything. But it is perhaps possible for this to be taken to extremes. Like the copper who spends almost his entire shift walking between the two places he’s supposed to be patrolling rather than around the two areas he’s supposed to be patrolling:
A Police Community Support Officer has told a stunned village council that he spends up to six hours of his eight hour shift walking to different areas on his beat as he is not qualified to ride a bike.
The officer told parish councillors that he couldn’t ride to their village because he hadn’t passed his “police cycling proficiency test.”
The minuted meeting prompted one of the councillors to put in a complaint to North Yorkshire’s Police and Crime Commissioner claiming the situation was “beyond parody.”
Police said that before officers were able to ride a bike on duty they had to go through health and safety procedures, which the officer had not completed at the time.
So instead he spent up to six hours of his eight hour shift walking the seven miles from his base in Clifton Moor, York to and from the two villages that formed his beat.
Perhaps we’re not beyond parody here but we’re very definitely approaching the parody horizon.
And of course we shouldn’t blame this PCSO: it’s not his fault that the regulations on which policemen are allowed to ride a bike were written by complete dickheads. We should though be complaining that those regulations were written by dickheads: and even more so we should fire the complete incompetent who assigned a non-bike riding PCSO to a beat that clearly required the ability to ride a bike.
Sadly, the one group of incompetents in our society who never do get fired are those that piss away our tax money. Perhaps that ought to change….
THE fat and rich exercise; the fat and poor take pills:
…a new study published in the American Journal of Preventive Medicine,researchers from Concordia University looked at the incomes and health habits of more than 3,000 children and teens between the ages of 8 and 19 and more than 5,000 adults over the age of 20.
At least two-thirds of the study subjects reported attempting to reduce food intake or exercising in order to lose weight in the past year. Despite these efforts, the adults in the study gained an average of three pounds, while the youths gained about 12 pounds. The people in the lower income brackets gained about two pounds more than those in the highest one.
One reason for the disparity might have to do with the tactics they used to try to shed pounds: Compared to adults making $75,000 or more, those making less than $20,000 were 50 percent less likely to exercise, 42 percent less likely to drink a lot of water, and 25 percent less likely to eat less fat and sweets. And adults making between $20,000 and $75,000 were about 50 percent more likely to use over-the-counter diet pills, which aren’t proven to work.
Read it all here...
Exciting news for the spam filters on our email: scientists have revealed that they can now grow a penis in a laboratory. Just think what’s going to happen when the mass marketers get ahold of that idea: if you thought that pills to increase size were heavily marketed you ain’t seen nothing yet.
Scientists have successfully grown penises in a laboratory and say they could be tested on humans within five years.
The organs would be used to help men who have suffered a serious injury to the region, had surgery for cancer or are suffering from a congenital abnormality.
The work is being carried out the Wake Forest Institute for Regenerative Medicine, North Carolina.
NOR does Nick Clegg harbour any ambitions to shag around: which does rather raise the question of what on earth he’s doing in the Lib Dems of course. But of course that’s not quite what he’s really said: instead he’s said that he’d rather sleep with his wife than Ed Miliband or David Cameron.
Faced with the choice of “going to bed” with Ed Miliband and David Cameron in a new coaltion deal he would choose his wife “Miriam every single time”, Nick Clegg has said.
Well, yes, so would I of course. Either my wife or Clegg’s wife to be honest. In fact, we might be able to persuade the wives of David and Ed that they’d prefer Miriam: and wouldn’t that be a tape that would sell well?
But the real point to this story is that it’s now newsworthy when a politician says that he’s quite happy sleeping with his own wife. Blimey, whatever next eh?
Or perhaps we should say that the Australian Parliament is going to look into the tax payments that Apple and Google don’t make in that country. I’m sure they’ll produce a lovely report and that they’ll complain mightily. But it’s very difficult indeed to see what they might actually be able to do about it:
The upper house yesterday supported a motion from Greens leader Christine Milne for the committee to examine and report on the “tax avoidance and aggressive tax minimisation by corporations registered in Australia and multinational corporations operating in Australia”.
Or as another report has it:
Milne suggested that by pulling up some of the largest businesses operating in Australia on their tax domestic commitments, the government could plug its revenue shortfall without removing funding from social services.
“Instead of pulling safety nets out from under people in our community who most need support, the Abbott government should look for ways to raise revenue from those who can afford to pay,” said Milne in a statement.
The inquiry, which will look at “tax avoidance and aggressive minimisation by corporations registered in Australia and multinational corporations operating in Australia”, is set to place in its cross hairs some of the biggest technology companies operating in Australia, including Apple, Google, and Amazon.
The federal government has previously called out companies such as Google and Apple for using the so-called “Double Irish Dutch Sandwich” method of funnelling money through countries outside of Australia to pay very low taxes domestically, despite significantly high revenue from Google’s advertising and Apple’s products sold in Australia.
The thing is that there’s really not very much at all that the Australian government can do about this. There’s something the US government could do, sure, but that wouldn’t change the amount of tax paid in Oz. There’s also something the Irish government could do but that would change the amount of tax paid in Oz. And whatever the Oz government decides to do isn’t going to change the amount of tax paid in Oz either.
For, what the two companies do, both Apple and Google, is to sell their products into Australia having manufactured them elsewhere. They thus pay whatever import duties there are (not very much if anything) and that’s it. All the profit they’ve made by making those things just isn’t made in Australia: thus there’s no profit tax paid in Australia.
And it really is that simple. Other than trying to increase import duties, thereby screwing up the entire world trade system, there’s just nothing Oz can do about it.
This is something of a hostage to fortune: Morrison’s has promised to match prices with the other supermarkets in the UK. OK, they often do that against Waitrose (which is generally more expensive anyway), Sainsbury’s and the like but now, in a piece of majestic bravery, they’re going to try to go head to head with Aldi and Lil. And it’s really not certain that this is going to work out well either. For there’s a very large and very basic problem here:
Morrisons has announced a new price match system, which is set to exacerbate Britain’s brutal supermarket war.
The fourth biggest grocery chain said that in addition to price matching Tesco, Asda and Sainsbury’s, it would now do the same with discounters Aldi and Lidl.
The new price comparison and points system will see users automatically refunded card points, along with extra points for selected products and fuel.
Here’s what the problem is. The actual price a supermarket pays for something isn’t really what determines what it then tries to charge you for it. Sure, it has an influence and we’ll get to that in just a moment. But it’s all the other costs associated that do make up the total price. And when you think about it a supermarket is really just a logistics chain. That’s their real special sauce: being able to run the lorries and the warehouses that get everything into the stores so they can be sold but not too much so that the store overflows with things unsold. And that is also a very expensive part of their system.
And that’s the secret sauce at Aldi and Lidl. They typically carry only one brand of anything. One type of smoked Swiss cheese, say, instead of the offerings from several or many different manufacturers. And that makes all that logistics stuff a great deal cheaper.
There’s also that bit we’re just getting to. Byt stocking, in general, only one of anything this means that they’re buying in higher volume from that one producer. That means they get better prices.
The general consensus is that a full service (or full range) supermarket simply cannot compete directly on price with that Aldi/Lidl (and in Germany there’s several others as well, Penny Market, Billa and so on) strategy. But that’s exactly what Morrison’s has just committed itself to. It’s going to be, in a business sense, a bloody and bitter war. And not one that Morrison’s is necessarily going to win.
The European Commission has now released its document about why and how it thinks that Apple has been playing hooky with the Irish tax system. And it’s a real joy for connoiseurs of the intricacies of bureaucracy and taxation. Essentially, what the EU is saying is that the profits Apple made actually in Ireland were not properly taxed. And that, if they can prove that, then Apple must pay over to Ireland the tax that they should have paid.
The thing is, even if the EU manages to prove all of this then the likely amount that Apple will pay is $200 million or so. Yes, that’s all:
Apple set aside about $12 billion for U.S. federal and state income taxes in fiscal 2013, on sales of $62.7 billion in the Americas, according to a filing with the U.S. Securities and Exchange Commission. The company, which doesn’t break down revenue by country, set aside just $1.1 billion for foreign income taxes over the same period, on sales outside the Americas of about $88 billion. It reported foreign pretax earnings of $30.5 billion that fiscal year.
Apple could be asked to pay up to $200 million in back taxes, said Heather Self, a tax partner at Pinsent Masons LLP in London. She said the company could also agree to pay a smaller amount to settle—or pay nothing if Ireland offers a robust defense.
And another estimation:
Seamus Coffey, an economics lecturer at University College Cork, who has examined Apple’s Irish tax affairs, said: “The EC can demand back payments for 10 years, which would take it back to 2004.”
Figures in the commission’s calculation show that the relevant Apple subsidiaries – Apple Operations Europe and Apple Sales Europe – had annual profits of between €60m and €80m between 2009 and 2012, and annual revenues of between €500m and €680m.
“You’re taxed on profits, not revenues, but even if the EC said that all that revenue was pure profit, then over 10 years it would owe the Irish tax rate of 12.5% on about €6.8bn – that’s about €850m,” said Coffey. However, Coffey said a more likely figure would be 12.5% on total profits over the 10 years of perhaps €800m, amounting to €100m.
Well, the EU itself says back to 2003 but that’s trivia. The point being that over this same period of time Apple has made profits of around $150 billion (yes, that’s billion) and having to fork over another $100 million really isn’t going to be anything they’ll worry too much about.
As to why the sum is so small, it’s because the tax bill in Ireland is only on whatever profits come from actually doing business in Ireland. It’s a so called “territorial tax” system. So all of the vast profits Apple has been making by selling in the UK, and Germany, and Italy and so on and on don’t come into the Irish tax question at all.
This is, at worst, a pinprick, nothing more.
EBay has just announced that it’s to sell off PayPal. All of which comes as something of an amusement as the company has been screaming loudly for ages now that of course it is not going to do any such thing. The reason being that a hedge fund investor (he prefers to call himself an “active” investor) has been pushing the company to do this. So, of course, management has been shouting “No!” for no one wants to be told what to do by outsiders. Especially when it turns out he’s right and you change your mind:
EBay said on Tuesday that it would spin off its PayPal payments unit into a separate publicly traded company, taking a step the activist hedge fund magnate Carl C. Icahn first demanded nine months ago.
The move will cleave eBay almost in half, separating it from the payments processor it acquired 12 years ago and built into a giant that generates almost half of the company’s revenue.
For nine months that management has been saying that Icahn is crazy to be demanding such a thing. And now they’re saying he’s been right all along.
As to why the plan might make sense: it’s hugely expensive to set up an electronic payments processing operation. Not because the code is difficult but because the bureaucratic regulations about money laundering and so on are so fearsomely complex. Meaning that if you’ve got one already then there’s a great opportunity to get other people to use that system you’ve already got. But, if you’re tied into one auction house or online retailer then people who own other such companies will be extremely hesitant to adopt your payment method (it’s notable that Amazon doesn’t take PayPal, in part because it’s owne4d by EBay). Thus divorce the payments processor from the auction house and each could be worth more alone.
Yet Mr. Icahn succeeded in the long run. In an interview, Mr. Donahoe acknowledged that eBay was following the strategy Mr. Icahn had recommended and that the company had vocally rejected.
We “got to the same place that Carl said early on,” he said.
But he contended the company arrived at its conclusion through “a deliberate process,” and not by reacting to outside pressure.
Yeah, yeah, sure you did, sure you did.