Thursday, 3 January 2013

Richard Murphy nearly gets it

Although Mr M was one of the people putting about the myth that There is $21 trillion hidden in tax havens, common sense appears to have prevailed. What he now says ties in with my post of yesterday evening.

From today's City AM Forum:

I disagree with Sir Martin Sorrell’s claim [that corporation tax payments are a "question of judgement"]*, which is based on the perception that capital can locate where it wishes and can move at will.

Three things perpetuate this myth.
* The first is that tax havens (and low-tax jurisdictions), whose opacity allows much of the supposed mobility of capital, obscure the reality that often nothing moves bar the ink on a contract.
* The second is a financial sector that promotes and services this myth.
* The third is that tax authorities are unwilling – as the Public Accounts Committee has suggested – to tackle tax avoidance.

Multinational companies cannot make money without engaging customers, staff, and by employing assets. Paying tax in the right place at the right time is not a moral obligation. The right place is where the customers, staff and assets are.** The right time is when the law of the land dictates. It is not "a matter of judgment"; it is a legal obligation.


* On the facts and under current rules, Martin Sorrell is quite correct. The relevant question is the "mobility" or otherwise of "capital".

** Change that sentence to "The right place is the locations at which their customers, staff and assets are" and that's your cluebat as to what the ideal tax base is.

5 comments:

. said...

Yep.

One incredible by-product of being the "first mover" into this brave new world would be that all this mobile capital would want to be mobile to the first mover.

Especially if that first mover was already a trusted jurisdiction such as Britain.

BE

Mark Wadsworth said...

BE, I also assume that the first mover advantage would be enormous.

Elby the Beserk said...

Murphy is an utter hypocrite. He used to write a column in the Guardian. On how to avoid paying tax. Scum.

Mark Wadsworth said...

EtB, that's true, but even an utter hypocrite must be right some of the time.

James James said...

Hypocrisy is a minor vice, used to criticise people when they're right but you still want to criticise them for something. Some hypocrites have no intention of living up to the principles they espouse, but others are good people, just spirit is willing flesh is weak.

Murphy is not a hypocrite because he has publicly repudiated his earlier actions. He is, however, thick as pig shit. This is an accountant who doesn't know the difference between govt debt and deficit.