Monthly Archives: May 2014

Britain, Business, Economic, Finance, Government, Legal, Politics, Society, Taxation

Amazon’s tax advantage is economically unfair. Time to put a halt to it…

 

TAX LOOPHOLES

The age of the internet has brought colossal benefits to many large, multinational companies. No more so than for Amazon, a distribution giant. The company has earned very lucrative revenue streams, but has managed to deftly reduce its corporation tax bill through skilful use of tax loopholes. Last year, Amazon paid just £4.2 million in UK corporation tax, despite generating UK sales of £4.3 billion. The firm has been heavily criticised because it has now emerged that it avoided paying billions of pounds in tax last year by funnelling revenue of £11 billion through an overseas company based in Luxembourg. Amazon is also reported to have received a financial inducement and rebate amounting to £4m from the authorities in Luxembourg as part of the controversial arrangements.

This is all the more startling considering Amazon has received more than £10m in financial assistance from the Scottish Government, with the company opening a logistical distribution hub in Dunfermline, alongside its customer call centre in Edinburgh.

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Striking the right balance between competitive rates of Corporation Tax to attract foreign direct investment such as this while ensuring companies pay their rightful share is a difficult and complex area for politicians of all parties. Whilst Amazon’s avoidance causes public anger, governments have to take into account the investment the company has made in a country and the employment which that investment has created. Amazon may well argue that it would not have invested if it had been discouraged from exploiting this position.

A low rate of Corporation Tax which the UK offers in comparison to other countries is generally attractive for foreign firms wishing to make direct investment. But such schemes should also encourage companies like Amazon to pay and reduce the incentive for elaborate avoidance schemes of this sort. The loopholes provide too much of an economic and financial advantage for many large multinational firms. These require to be reined in through tighter political scrutiny and more exacting and better enacting of legislation.

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Britain, Defence, Government, Military, National Security, Politics, Society

New round of British Defence Cuts…

DEFENCE

Intro: Our severely reduced military capability amounts to a mere standing defence force, and one that is barely equipped enough at present to deal with the most basic of future threats

The announcement from Whitehall that there is to be further cuts to Britain’s already shrinking Army, albeit on grounds of economy rather than strategic priorities, is deeply alarming.

The new rounds of cuts are aimed, primarily, at Britain’s elite rapid reaction force – the most unwarranted target for making economies and savings through cost-cutting. A prime target earmarked is 16 Air Assault Brigade, a core component of which is Britain’s elite Parachute Regiment. It is to be stripped of half its regular infantry battalions, as well as reductions in some of its helicopters, artillery and armoured vehicles. The Royal Engineers, who support our elite forces through maintenance of equipment and servicing, are also to suffer wide ranging cuts to its budget. 16 Air Assault Brigade is to be reduced from the current level of 8,000 troops to 5,000 by the end of this year. Such a scaling-down is difficult to discern given Britain’s post-Afghanistan strategy. This was meant to be focused on our military capability deemed agile enough to respond and execute contingency operations as they arise in the future. A diminishing capability raises fresh concerns over the Government’s overall defence policy.

Alarmingly, these latest cost reductions are to be implemented alongside the already massive cuts inflicted on the Armed Forces. The last strategic defence review in 2010 proposed the reduction of the Army’s strength from 102,000 regular soldiers to just 82,000 by the end of the decade. Parallel reductions of 8,000 personnel in the RAF and 5,500 in the Navy were also part of the defence reconfiguration. Not since before the Napoleonic Wars has Britain had such a low level of manning to call upon in the event of defending sovereign interests.

Some £10 billion has already been cut from the defence budget. Whilst understanding the need for austerity and for efficiency gains to be made where they can, of which the Ministry of Defence cannot expect to be excluded given its high wastage rate on incompetent procurement programmes, defence of the realm is a paramount obligation of every government. If that duty is neglected, a government runs the risk of all of its other priorities and government policies becoming compromised in the process. It is crucial, then, that Britain retains an effectively trained army with a full complement of experienced and professional troops. For many, though, our severely reduced military capability amounts to a mere defence force, and one that is barely equipped enough to deal with the most basic of future threats. Yet, the world is a far more dangerous place than it has ever been, and Britain should be punching above its weight: diminution of military resources reduces the UK’s global influence – military cuts which go against the Government’s aspiration of retaining a place at the top table around the world. To have a positive influence, it is crucial that Britain’s Armed Forces are sufficiently maintained if that ambition is to be met.

There is no doubt that Britain’s military Armed Forces have been pared to the bone. It has reached the stage where any further cuts may well imperil national security.

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Arts, History, Human Rights, Philosophy, Society, United States

Quantum Leaps: Thomas Paine…

THOMAS PAINE 1737 – 1809

English born political philosopher, Paine not only invented the term ‘United States of America’, he inspired the revolutions both there and in France. He was forced to flee from England when he tried to do the same thing there. Awareness of his importance in the formulation of the American constitution and the American ‘way of life’ is pivotal to understanding the entity that is modern day America.

Having emigrated to the New World in the early 1770s, Paine became editor of the Pennsylvania Magazine and published one of the first essays calling for the abolition of slavery. With the beginning of the American Revolution, Paine made himself famous by publishing his book Common Sense. In it, he argues against the notion of a ruling class, insisting that government and society must be kept distinct. Independence for the American colonies, Paine argued, was both morally and practically justified. He continued to write and publish pamphlets throughout the War of Independence in support of the revolution.

Thomas Paine was a philosopher, political activist and revolutionary. As a political theorist he advocated that ‘the proceeds of land and property tax should be invested in a welfare system’.

Thomas Paine was a philosopher, political activist and revolutionary. As a political theorist he advocated that ‘the proceeds of land and property tax should be invested in a welfare system’.

After the success of the war for American independence, Paine went first to France and then to England. In response to Burke’s Reflections on the Revolution in France, Paine wrote and published The Rights of Man, his seminal treatise on democracy and republicanism. According to Paine, all men are born with equal rights. The necessity of social living however, can bring about situations where we impinge on the rights of others. Moreover, we may not always have the means to protect our rights from others who do not respect them. Consequently, it is necessary to develop the state and a constitution in which individual rights are encoded as civil rights, enforced by the state on behalf of the individual. The only morally acceptable constitution is that of the democratic republic in which citizens are granted the further right to vote in order to choose their own leaders. It is just this right, to choose one’s leaders, that the hereditary monarchies of France and England deny to their people and provides justification enough to abandon them as immoral constitutions.

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The British Government, in response, charged Paine with treason, causing him to flee back to France. With Paine gone, the government quashed the British revolution before it had a chance to gain momentum. In France, Paine was at first welcomed and given a seat in the National Convention. However he was later imprisoned and only just escaped execution.

Paine developed his ideas on civil rights and justice in his Agrarian Justice. He argues that a state is predicated on the basis that it makes its citizens better off than they otherwise would be without the constitution. But, he finds, many of the poorest people in the civilised societies of Europe are in a worse state than so-called ‘uncivilised’ Native American Indians. The inequity has much to do with land and property ownership, a privilege Paine suggests should be taxed since the generation of wealth that makes it possible requires the support of society. The proceeds of land and property tax should be invested in a welfare system, access to which is a right of every citizen.

In 1802 Paine returned to America, but it was not to be a happy homecoming. In the Age of Reason Paine had argued against both atheism and Christianity in favour of a deism which rejects any appeal to divine revelation. Rather, the belief in God is claimed to be intrinsically reasonable, a logical conclusion to the question of why anything exists at all. Paine rejects both organised religion and the Bible’s portrayal of a vindictive, vengeful God. Unfortunately for Paine, America was resolutely Christian and frowned upon his religious writings, despite his previous service to her. Though he remained in the United States for the rest of his life, he died in obscurity.

Paine’s work is characterised by a rare integrity that rails against political oppression, organised religion and poverty. Despite the massive influence of his early writings he remains a philosopher who, curiously, is now rarely mentioned.

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