Money in the news and how you are going to pay and pay and pay
A REPORT out of the US about an investigation into Google’s tax dodging ways.
Google reported an effective tax rate of 18.8 percent in the second quarter, less than half the average combined U.S. and state statutory rate of 39.2 percent.
Something’s going on, obviously. What is actually going on is technically complex but can be, at the risk of losing a bit of detail, explained simply enough. There’s essentially two rules you need to understand.
1) An American company only pays the corporate income tax (what we call corporation tax) on profits it takes back into America. If an American company makes profits in, say, Ghana, the profits stay in Ghana or move anywhere in hte world other than the US, then the US doesn’t tax those profits.
SHELTER has a report out showing how rents are just too damn high.
In the majority of areas, typical rents from private landlords are over a third of the average take-home pay – the widely accepted measure of affordability.
From 1997 to 2007, rents increased at one and a half times the rate of incomes. Recent research by Shelter has also revealed that 38% of families with children who are renting privately have cut down on buying food to pay their rent.
OK, let’s accept their research as it is: what are we going to do about it?
BORIS Johnson wants to privatise London’s Fire Services. That’s the story according to Liberal Conspiracy at least, Boris is thinking of privatising the fire controls rooms in London and certainly some of his mukkers have muttered about privatising the whole shebang.
The Mayor of London Boris Johnson is planning to rush through the privatisation of the London Fire Brigade control centre.
It would be the start of privatisation within London’s fire services and open the door to further privatisation.
In 2008, Conservative London Assembly Member Brian Coleman, a key political ally of Boris, also refused to rule out privatising all of London’s fire services.
Coleman is now pushing plans to fully privatise the control centre by March 2012.
Sounds just absolutely appalling, doesn’t it? Letting private companies make money off saving lives, there ought to be a law against this sort of thing.
WANT to know what Microsoft boss Bill Gates is getting for the $600,00 a month rent he’s lashing out for his eldest daughter’s home?
Well, the 1997 home has: 4 acres; eight bedrooms; six bathrooms; 7,352 square feet of living space; a fountain with horse heads made of stone; a pool; lots of chairs and a wine cellar.
HATS off to unmarried lovers Dave and Angela Dawes from Wisbech, Cambridgeshire, who have won £101,203,600.70 on the EuroMillions lottery.
Dave, 47, and Angela Dawes, 43, plan to continue living in their £70-a-week one-bedroom flat; she will continue her volunteer work for the British Heart Foundation; he will continue to work 12-hour shifts as a forklift truck driver for Premier Foods; and she will keep the ring her engagement ring her and not buy a larger stone.
WE’VE another handwringing documentary coming to screens near us this month. Blood in Your Mobile is all about the appalling mining conditions in Congo
Umm, but hang on, haven’t we already had this? The stuff about coltan, the stuff that makes the tantalum which makes the capacitors in our phones? Why, yes, we have in fact already had this. And in fact there’s been a change in the law: makers of electronics, under the Frank Dodd rules, have to certify that their electronics, the 4 capacitors in them, didn’t come from minerals from conflict areas.
OK, so we’re not having much fun at the moment with the Euro, Greece, the eurozone and all that. The US isn’t having a great time of it either. However, they’re rather trivia as compared to what might be happening in China.
They’ve been having 10% 0r so growth for the past three decades: that’s 10% per year mind you. So the economy is about 17 times larger than it was when I were a lad at university: something of a change really.
However, there’s a general rule of thumb that a booming economy covers up a multitude of sins. Hey, so what you made a mistake? The growth is so fast that it’ll come right anyway. It’s only in recessions that you see, as Warren Buffett says “who’s been skinny dipping” rather than wearing trunks. When growth is high or the tide is in you can’t tell.
There’s also another set of economic theories, usually known as “Austrian” that says, roughly, that in every boom there are those swimming without their trunks. And you need to occasional recession to uncover them, get rid of them, purge them from the economy.
EMAIL of the Day reaches from Oliver Haiqing Hua, an “Economist, Business Consultant, Report Writer” who is offering his services as a translator:
I am a business consultant as well as avoluminous Chinese writer.
The Steve Jobs who founded Apple as an anarchic company promoting the message of freedom, whose first projects with Stephen Wozniak were pirate boxes and computers with open schematics, would be taken aback by the future that Apple is forging. Today there is no tech company that looks more like the Big Brother from Apple’s iconic 1984 commercial than Apple itself, a testament to how quickly power can corrupt.
Rude, dismissive, hostile, spiteful: Apple employees—the ones not bound by confidentiality agreements—have had a different story to tell over the years about Jobs and the bullying, manipulation and fear that followed him around Apple. Jobs contributed to global problems, too. Apple’s success has been built literally on the backs of Chinese workers, many of them children and all of them enduring long shifts and the specter of brutal penalties for mistakes. And, for all his talk of enabling individual expression, Jobs imposed paranoid rules that centralized control of who could say what on his devices and in his company…
he internet allowed people around the world to express themselves more freely and more easily. With the App Store, Apple reversed that progress. The iPhone and iPad constitute the most popular platform for handheld computerizing in America, key venues for media and software. But to put anything on the devices, you need Apple’s permission. And the company wields its power aggressively.
In the name of protecting children from the evils of erotica — “freedom from porn” — and adults from one another, Jobs has banned from being installed on his devices gay art, gay travel guides,political cartoons, sexy pictures, Congressional candidate pamphlets, political caricature, Voguefashion spreads, systems invented by the opposition, and other things considered morally suspect.
I’M not sure that I’ve actually seen anything quite this stupid for some time:
“Greece could become the showcase of solar development in Europe‘s ‘sun belt’ and that development could become the main driver of Greece’s green economic growth,” said Costas Karayiannis, chief executive of Greece’s only solar energy investment fund, Axeon Navitas. “Germany is the global leader in solar energy and it has a lot less sun than Greece. It makes a lot of sense for it to invest in this type of project here.”
Yes, we know that Greece is bust, yes, we know that the Greek Government has run out of money and yes, we also know that yer average Greek on the Corinth Omnibus hasn’t got any money either.
There are of course acres of newsprint devoted to him today but for me two little stories stand out.
It was only a couple of months ago that his biological father (Jobs was adopted) was revealed to still be working in a Nevada casino and that the two of them had never met or even talked on the phone as adults. I wonder if they did in these last couple of months?
The second is a minor financial story and given that this is the money column, an annoying little detail it’s worth correcting. It’s about backdated options grants. In his Telegraph obituary:
In 2001 he was granted stock options amounting to 7.5 million Apple shares, allegedly without the required authorisation from the company’s board of directors. Furthermore, the option came with an exercise price of $18.30.
But this price allegedly should have been $21.10, thereby incurring a taxable charge of $20 million that Jobs did not report as income.
There was a little spate of this going on in tech companies at the time and it became a minor scandal. However, it’s almost universally misunderstood.
THERE’S a Belgian/French bank out there called Dexia. No, I’d not heard of it until a couple of days ago either. The reason I have heard of it, the reason it’s in the papers, is because it seems to be going bust.
At times during Tuesday’s trading session in Brussels, Dexia shares changed hands for less than €1 and at the close were quoted at €1.008, marking a 22.5pc fall for the day and close to a 60pc drop since the beginning of the year.
The collapse in Dexia’s market value, which currently stands at €1.96bn (£1.68bn), came as François Baroin, France’s finance minister, and Didier Reynders, Belgium’s finance minister, issued a statement saying they would “take all necessary measures for the security of depositors and creditors” and would “guarantee financing raised by Dexia”.
There’s two problems here, the second making the first much worse. The first is that they’ve blown most of the money, the capital of the bank that is, on buying Greek etc government bonds which are now worth 50%, 30%, of what they first paid for them. So the bank is teetering around being bust, having exhausted or nearly so all of its capital reserves.
WE’RE told today that Tube drivers deserve their £50,000 a year pay packets because, well, because they deserve them:
But the drivers who take the millions of Londoners and visitors and tourists to their destinations every day are unsung heroes and heroines. They should be recognised as such in their pay packets, which the Rail, Maritime and Transport Union is still in the process of finalising, not least for having to deal with the lurking possibility of a “one under”. That’s what’s so special about those guys.
As the comments in The Guardian point out, you don’t in fact get £50k a year because people die in front of you: ask a few nurses, paramedics or Marines how much they get paid.
Fortunately, the Guardian has a piece where they detail what it is that they are demanding:
Their message is very clear and simple: get money out of the political process; strive for equality in taxation and equal rights for all regardless of race, gender, social status, sexual preference or age. We must stop poisoning our food, air and water for corporate greed. The people on Wall Street and in the banking industrial complex that destroyed our economy must be investigated and brought to justice under the law for what they have done by stealing people’s homes and savings.
Jobs can and must be created. Family farms must be saved. The oil and gas industry must be divested of its political power and cheap, reliable alternative energy must be made available.
Cowell’s health lotto frenzy – He snaps up 5,000 tickets – Daily Star
Why I’m backing the New Health Lottery – Daily Express
The Express’s Giles Sheldrick is on message:
SIMON Cowell has a knack for spotting a winner and last night The X Factor creator backed The Health Lottery to transform the lives of millions of people across the country.
“I thought it was one of those great ideas that can make a real difference and to show my support I’ve bought 5,000 Health Lottery tickets. Raising £50million in the first year is going to help a huge amount of people and if my numbers come up I will put the money back into the charity.”
The Star’s Nigel Pauly is impressed:
Simon, whose TV talent shows have brought the world chart- toppers Leona Lewis, 26, Susan Boyle, 50, and JLS, is famous for his acid-tongued put-downs of hapless wannabes. But he had nothing but praise for Britain’s newest lottery game.
Five grand for all that publicity and halo polishing is not a shabby investment.
OF course, this may have something to do with the attitudes of women who take their husband’s name and those who do not. But the choice can affect your job prospects:
Even after controlling for education levels and work hours, a woman who took her husband’s name earns less — €960 compared to €1156.
A study showed:
Despite the fact that other than their name choice the women were identical, the participants overwhelmingly described the woman who had taken her husband’s name as being more caring, more dependent, less intelligent, more emotional and (somewhat) less competent. Not necessarily qualities you would seek in a potential employee.
WANT to know what George Monbiot earns? The Guardian oput the news on its front page. He published a “registry of interests“. Tim tells us that Monbiot earns £75,000 a year gross or thereabouts.
As opposed to a Toynbee which runs at £116,000 I’m told, or a Rusbridger which is £500,000 plus bonus and pension contributions.
WHEN Hippy communities die out… Or rather why eaglitarian societies lose out to unequal ones. The basic problem is that equal societies, being equal, are reasonably happy. So they never go and do anything. Unequal societies have lots of pissed off people who then bugger off elsewhere, thus expanding that society and killing off the more equal ones.
That’s the explanation that these blokes are putting forward at least:
Agent-based simulation results show that in constant environments, unequal access to resources can be demographically destabilizing, resulting in the outward migration and spread of such societies even when population size is relatively small. In variable environments, stratified societies spread more and are also better able to survive resource shortages by sequestering mortality in the lower classes.
Oh and that second point as well: when there’s the hard times in an unequal society the poor die: in an equal one everyone gets weak and thus more likely to get wiped out by the next tribe over.
WE’VE all seen that lovely video where Bill Nighy can’t work out why there shouldn’t be this Robin Hood Tax thing. Tiny amounts, 0.1%, sliced off every bank transaction to fund all sorts of lovely things. There’s been some argument in technical circles about this of course and the split’s along the usual lines.
Those who know what they’re talking about, you know, Nobel Laureates and the like, think it’s a very bad idea, those who would just to have more money to spend, you know, like politicians, think it’s a great idea. And so we come to the European Union which has just proposed exactly such a tax, a financial transactions tax, and FTT. As Sr. Barroso says:
He added: “It is a question of fairness. If our farmers, if our workers, if all the sectors of the economy from industry to agriculture to services, if they all pay a contribution to the society, also the banking sector should make a contribution to the society.”
The Daily Mail says he is – or might be:
Was the BBC’s trader from a hell one big hoax? Claims greedy dealer praying for a recession in which to get rich was a FAKE
“Rastani said the stock market was “toast“. Rastani said:
“The governments don’t rule the world – Goldman Sachs rules the world.”
To take an example from Ed Miliband’s ideas at the Labour Party conference. As background, and I know you’ll find this hard to believe, British politics is remarkably free of corruption. I speak as one who has worked in both the US and Russia and believe me, a few dark corners of the occasional local council aside, brown envelopes and cash bribery really aren’t part of the British political scene.
Ed seems to want to change that:
He will tell delegates in Liverpool: “Let me tell you what the 21st-century choice is: are you on the side of the wealth creators or the asset strippers?
“For years as a country we have been neutral in that battle. They’ve been taxed the same, regulated the same, treated the same, celebrated the same. They won’t be by me.”
While not spelling out the detail of how venture capitalists in particular could be assessed, Mr Miliband believes that a tougher tax regime could be imposed on some firms deemed less responsible than others.
RECESSION? Goldman Sachs rules the world. So says Alessio Rastani. He says you can make money from a downward market. He also says – and see below the video – that you can hire him to help you:
YES, yes we all hate bankers. After all, they’re the ones who got us into this whole mess, aren’t they? So, we’ve got to rein them in, force them to our will, instruct our politicians to tell them what to do.
Well, so much for that. The FTSE 100 fell as much as 1.7 per cent this morning, while overnight the euro and Asian stock markets tumbled, after Europe’s leaders announced their grand 2-trillion-euro plan over the weekend to drag the Eurozone out of the mire. It appears the markets are well past the point of believing that political leaders can get us out of this mess. The consensus is that the plan is not concrete enough.
Now it’s true that FTSE has recovered but that doesn’t change the basic insight of the observation.
YOU knew it was coming: as soon as someone suggests that perhaps having only 2% of England covered with houses we might make 3% of the country so covered….to bring down house prices, provide everyone with a garden, that sort of thing….those who already have large houses with large gardens will complain.
You know, the “concreting over of the countryside”, the National Trust on the march, all that. My problem with these people is not just that I don’t believe some of their arguments: I don’t believe that they’re stupid enough to believe their own:
That policy exceeded all expectations, with up to 80 per cent of new homes constructed on such “brownfield land” in recent years – up from 55 per cent in 1989. Between 1995 and 2007, 117 square miles of it were developed for housing; had this been on “greenfield land” instead, an area of open countryside more than six times the size of Southampton would have been swallowed up.
ARE we screwed? Growth’s in the toilet, countries are going bust left right and centre and they’re going to take the entire banking system down with them and…..well, no, hang on a minute. Have a look at this one little statistic:
Things aren’t looking that great for the rest of the world either. There isn’t a single upward revision to be seen, and global growth has been revised from 4.3pc to 4pc.
Now yes, we’re wondering whether the UK economy is going to grow at all this year, the US might manage 1% growth and Greece has shrunk by 5% (or if we use the usual Greek attitude to economics statistics, elebenty percent) but global growth is carrying on at 4% ish.