I used to believe in the markets. I thought capitalism was good, it has brought many benefits and has brought the poor out of poverty over the ages.
But there is now a breed of capitalism in place that is damaging the West.
I call it Criminal Capitalism, mainly because it seeks to maximise profits any way it can, including illegal activity.
Most publicly represented by John DeLorean trying to save his car business by dealing in drugs, Criminal Capitalism is now hell bent on maximising profits by bullying government agencies into not paying tax.
Global Corporations have gutted the high street and replaced most of the shops. They now utilise expensive lawyers and offshore offices to pay zero corporation tax in the UK.
They exploit a loophole that government should plug, but of course these global corporations have powerful lobby organisations to keep MPs sweet and to not rock the boat.
These are part of the parasitical elite. They pay back into society an infinitesimal amount of what they take. A tiny fraction of what would be returned in taxes if the products and services had been transacted on the high street.
A prime example are the Water Companies in the UK. Almost exclusively owned by foreign parent companies, they maximise profits by not investing in the necessary repair work or in work to prevent sewage spills.
The problem of raw sewage being released is getting increasingly common. Only last weekend there was a lot of publicity about e.coli on the Thames whilst the Oxford-Cambridge boat races were being run. But of course there was, because the water companies do not re-invest, because there is no financial benefit for them to do so. To invest in new plant would dent the profits of shareholders, the parent company and the board.
Their lobby group was so strong it appears, they got the Government to relax the regulations regarding sewage release. Instead of it being a criminal offense, which it should be, the Government relaxed the rules and made it easier for water companies to release more sewage without penalty, therefore once again maximising profit over the health of the nation.
Google and eBay have offshore offices that allow them to pay corporation tax outside the UK. They argue that the transaction was done outside the UK because their office and their servers are not inside the UK. Yet the person they transact with and the bank account they receive funds from is inside the UK. Tax legislation needs to change to claw back some of that money in tax. It should be treated as a transaction on the high street with a foreign company based here. The location of the company should be immaterial.
Or the government could just double the VAT on online transactions with entities that continue to maintain they are outside the UK and outside of UK tax laws. I assume VAT is already being paid at the standard rate on any transactions, of course, so changing the rules to double it in these circumstances should not be a problem. If the online companies start to change their systems and use systems located within the UK then of course corporation tax will be liable on the profits.
This will also affect the City of London. The money-making machine of the mega-rich. Good.
UPDATE:
This report today emphasises my point: Thames water is facing administration as it is close to defaulting on it's debt liabilities. How can a company take on huge debts and at the same time service shareholder dividends and huge executive bonuses?
Taking on debt whilst simultaneously announcing "profits" should be outlawed.
If a company takes out debt, surely that impacts profit. "Profit" should be just that: the amount left over after operating costs and liabilities are met.
I know debt repayments are included in the liabilities, but surely there should be no bonuses or dividends while the company has any debt. The debt should be repaid and the company should return to ACTUAL profit without debt before any bonuses or dividends are paid surely? Or at least the debt/asset ratio should factor in any payouts?
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