It could provide expertly trained staff with experience of youth problems, people who would listen sympathetically and at a personal level. It would not solve all the mental health problems faced by young people, but it could contribute to a significant improvement in the lives of many of them.
We’ve found over the years that Sir Simon Jenkins is generally sound on the subject of civil liberties. But he’s a great deal less assured when it comes to the subject of economics. A pity, because he has decided to tell us all how corporations should be taxed: clearly within the purview of the economic way of thinking. He tells us that:
The answer is clear. Companies should pay corporation tax on the basis not of their headquarters or research base or place of origin.
They should pay on the proportionate spread of their sales. Likewise, individuals should pay tax to the country where they live or whose citizenship they enjoy – as is the case with most Americans.
That companies should pay on the basis of their sales is one of those Chesterton’s Fence problems. Why doesn’t the system work that way already? Because it has been considered and rejected, that’s why. Such a system would mean that the company that made on single overseas sale would then need to file a full corporate tax return according to the rules of that country. This is not something that is likely to increase trade among small companies. And that’s why the system is as it is.
It’s entirely possible that it’s not quite right in detail, but the current system operates on the basis that if you’ve a permanent establishment in a tax jurisdiction then you do indeed file a local return. And a permanent establishment, while it’s not perfect, is used as a proxy for the corporation being a large enough actor in that local economy that it should be filing a tax return in it.
A business that one of us was once involved in once made a single sale of $6,500 gross value into India. The only sale into that country in a decade of operation. No sensible tax system is going to demand an Indian tax return on that basis, is it?
Sir Simon’s suggestion also flies into the very face of the basic underlying rules of the European Union’s Single Market. All companies are equal, from whichever jurisdiction, and may sell from any one EU country into any and all others.
Finally, look at the underlying idea. People buy things because they make them better off, by their own lights. The point and purpose of having an economy at all is to maximise this, to maximise peoples’ opportunity to maximise their utility. We thus say, well, you, Mr. Johnny Foreigner, you have just made some of the residents of our country better off. Hmm, we’ll have to fine you some tax for having done that you know.
Just not a sensible logical basis for taxation, is it?
One of the biggest surprise announcements from today’s Autumn Statement – aside from the Chancellor’s spectacular U-turn on tax credits – was the decision to hand local councils full control of business rates. But it was a welcome one, too: devolving rates should deter excessive spending and stimulate competition between councils, while encouraging local government to be more responsive to business needs.
When the Chancellor first mentioned devolution during his Conference speech in October, over 60 per cent of IoD members came out in favour of the policy. The devil is in the detail of course, but at face value it’s hard to see a downside to the policy. Some have pointed to the potential for geographic disparities, but those rural communities likely to have the smallest rates receipts are predominantly run by fiscally responsible Tory councils.
Others suggest that local mayors will succumb to the temptation to hike rates (currently, the uniform business rate is set at 49.3 per cent of a non-domestic property’s free-market rental in England and 48.2 per cent in Wales) to raise revenues without the consent of the local landowners. The assumption – or hope – is that accountability to their local electorate will help them resist.
But while business rates have long been criticised by businesses (and any cut welcomed), it is important to note that it’s not occupiers that end up shouldering the financial burden but landowners. So the notion than business rates cuts, as a result of devolution, could bring business into an area is a misconception: business rates cuts lead to rent rises in almost exact proportion.
And business leaders will need to be better engaged with local government to ensure councils are fiscally responsible. For example, city-wide mayors will be given the power to levy a business rates premium for local infrastructure projects, and as such businesses will need to make sure their views are properly voiced through their Local Enterprise Partnership.
From now on, it looks like businesses are going to get the local government they deserve.
One of the points Owen Jones makes in The Establishment is that our country’s media is scandalously bent in favour of the free-market ideologues that monopolise newspaper ownership:
Whereas just 36 per cent of voters opted for the Tories at the 2010 general election, 71 per cent of newspapers by circulation backed David Cameron’s party.
Jones’s argument is that this lack of democratic accountability allows Rupert Murdoch and co. to wreak havoc on public opinion, leading astray the gullible and politically illiterate general populace.
The Sun’s recent attempt to convince us that 20% of British Muslims possess jihadist sympathies has forced fresh life into this debate, with questions raised as to the extent to which such flagrantly spurious material is any longer ‘acceptable’.
And yet, Jones’s argument is self-defeating – his statistic demonstrates that newspapers are not a primary determinant of the political climate in Britain. Those who call for regulation in response to this recent debacle fall prey to the same assumption: that people blindly believe what they read in the tabloids.
Jones’s position falls further apart when you look into extent of media bias in the first place – interestingly, 20th Century Fox movies appear to receive no special treatment in reviews from News Corporation outlets.
On the other hand, however, there is evidence to suggest that newspapers have some purchase at least. This 2007 study reports that those who received a free subscription to the Washington Post were 8 points more likely to vote Democrat. This does indeed seem a sizeable increase, and thus to demonstrate the important role of newspapers in determining how we think. But this figure surely shrinks to insignificance when you consider, firstly, that it’s a lot easier to decide whether Muslims are all evil ISIS-apologists than it is to decide between the two fairly similar political parties in the US, and secondly, that the Washington Post is a lot more respected than The Sun is.
Even if we were to concede that newspapers pose an almighty threat to the freedom and diversity of thought, it seems unlikely that in this particular case many people believed the half-truth they were being fed – the backlash from the rest of the media was a lot noisier than the original article.
The outrage in response to The Sun’s laughable figure-manipulation is misplaced and patronising. Just as we should afford a platform to the expression of racist or sexist ideas, we should allow newspapers freedom to present their own angle on things: the truth will out.
This is not quite what people seem to think it is. The report seems to show that people are happy with restrictions and taxes if they are for the common good. Thus we should go and tax meat. But that’s really not quite what is actually being said:
Taxing meat to simultaneously tackle climate change and improve global health would be far less unpalatable than governments think, according to new research.
Meat production produces 15% of all greenhouse gases – more than all cars, trains, planes and ships combined – and halting global warming appears near impossible unless the world’s fast growing appetite for meat is addressed.
The new analysis says this could be done through taxes, increasing vegetarian food in schools, hospitals and the armed forces and cutting subsidies to livestock farmers, all supported by public information campaigns.
The research, from the international affairs thinktank Chatham House and Glasgow University, involved surveys and focus groups in 12 countries and found that even measures restricting peoples’ behaviour could be accepted if seen as in the public interest, as was seen with smoking bans.
“Governments are ignoring what should be a hugely appealing, win-win policy,” said lead author Laura Wellesley, at Chatham House.
“The idea that interventions like this are too politically sensitive and too difficult to implement is unjustified. Our focus groups show people expect governments to lead action on issues that are for the global good. Our research indicates any backlash to unpopular policies would likely be short-lived as long as the rationale for action was strong.”
What they have actually found is that if they dress up the policy that they already desire as being something that is for the common good then people will complain less. Something which is obviously true, every orator and politician has known for ever that the more you appeal to peoples’ extant prejudices the more ridiculous the policy you can get them to swallow.
What Chatham House has just done is discover how to produce the propaganda for meat taxes, nothing else. And well done them of course, although quite when Chatham House got into the propaganda business we’re not quite sure.