Leeds Spur
Banned
We need the rich and these fudging corporations to pay their way. Then we'd have zero fudging deficit.
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Who set up our current tax laws!
- Thread starter Superhudd
- Start date
We need the rich and these fudging corporations to pay their way. Then we'd have zero fudging deficit.
southstand1882
Mitchell Thomas
Anyone? Anyone? Bueller
Richie
Naybet
If you think this through you'll realise how stupid it is.
Richie
Naybet
If you increase prices you increase revenue, thus the tax bill. It's so fudging idiotic.
Not to mention increasing prices hurts the consumer. Cutting of your nose to spite your face
southstand1882
Mitchell Thomas
Zero taxes is idiotic (taxing "profits" doesn't work)
There's no fudging money left!!!!! It's a credit fuelled ticking time bomb.
The world is swimming in debt. Our great grandchildren will be paying for this brick
Honestly, please open your eyes to what is happening
The money has to be raised from somewhere.
Billion dollar corporations are a good start
Smaller government next
Superhudd
Simon Davies
So, does anyone know what macaron set up our current tax laws so we can bend over and take it with a smile.
Interesting Starbucks cannot make a profit hey when the raw ingredients are 4p per cup of coffee on the example below, but lets give Starbucks the benefit and say theres is 10p :lol: Or maybe everyone is just getting mugged off.
I let another do the maths on a £2 coffee. As for the article stating that the rest pays for the ambience. Well what about take out!
I don't know if this means anything but I just read that there is zero excise duty on coffee.
The Economics of The Price of Coffee
After oil the most frequently traded commodity in the world is coffee. Coffee is an important export for many developing countries and coffee bars have become increasingly popular as an alternative to the old fashioned pub. Coffee is big business.
The price of coffee can vary hugely. I am currently writing this essay at Café Nero in Blackwells Bookshop Oxford. For a small cappuccino it cost me £1.95. On the one hand this is expensive; especially if you consider the raw materials of coffee and milk cost less than 4p. How do Costa Coffee justify charging such a high profit margin?
1. We are not just paying for the coffee but for the opportunity of sitting in a pleasant environment for up to 1 and half hours. Not only can I spend as long as I want but I can also consult books to help me write essays. (1) From this perspective £2 to stay in a premium location in the centre of town for 1 hours seems quite a good deal.
2. Coffee shops have to deal with low volume. A pint of beer in a pub used to have a low profit margin, but customers would regularly drink several pints. Lower profit margins worked because they were able to sell quantity. Coffee is not the kind of drink where you consume more than 1 or 2. With lower volume coffee shops need a higher profit margin to maintain profitability.
3. Price Discrimination. Like any firm coffee shops are seeking to charge the profit maximising price. Many consumers have a very inelastic demand for coffee. This is because there are few close alternatives to coffee and it is a relatively small % of income. If the coffee had been £3.00 I probably would still have paid it. The challenge for coffee shops is to find a way to charge to more to people like me without putting off customers who are sensitive to price changes.
4. Charging for Extras. This idea of price discrimination can be viewed in more detail by looking at how coffee shops charge for extras. One example is the extra price charged for the “fair trade” version. Fair trade coffee involves paying poor farmers a premium for their coffee. This can help them to gain a decent living. Café direct pay a premium to farmers of about 45p per pound. However to make a cappuccino requires only ¼ an ounce of coffee. Therefore the extra cost should be equal to less than 1p. However most coffee shops charge a premium of at least 10p. (1) This means most of the extra price goes in higher profit to the coffee shops.
However there are many customers who are price insensitive therefore they do not mind paying an extra 10p. In effect they are paying a premium for enjoying coffee with a conscience. From the firms point of view they are grasping consumer surplus from those with inelastic demand.
Other extras on offer at Costa coffee.
5 oz Soya milk (instead of milk) 30p
Decaffeinated 30p
Syrup 40p
Interesting Starbucks cannot make a profit hey when the raw ingredients are 4p per cup of coffee on the example below, but lets give Starbucks the benefit and say theres is 10p :lol: Or maybe everyone is just getting mugged off.
I let another do the maths on a £2 coffee. As for the article stating that the rest pays for the ambience. Well what about take out!
I don't know if this means anything but I just read that there is zero excise duty on coffee.
The Economics of The Price of Coffee
After oil the most frequently traded commodity in the world is coffee. Coffee is an important export for many developing countries and coffee bars have become increasingly popular as an alternative to the old fashioned pub. Coffee is big business.
The price of coffee can vary hugely. I am currently writing this essay at Café Nero in Blackwells Bookshop Oxford. For a small cappuccino it cost me £1.95. On the one hand this is expensive; especially if you consider the raw materials of coffee and milk cost less than 4p. How do Costa Coffee justify charging such a high profit margin?
1. We are not just paying for the coffee but for the opportunity of sitting in a pleasant environment for up to 1 and half hours. Not only can I spend as long as I want but I can also consult books to help me write essays. (1) From this perspective £2 to stay in a premium location in the centre of town for 1 hours seems quite a good deal.
2. Coffee shops have to deal with low volume. A pint of beer in a pub used to have a low profit margin, but customers would regularly drink several pints. Lower profit margins worked because they were able to sell quantity. Coffee is not the kind of drink where you consume more than 1 or 2. With lower volume coffee shops need a higher profit margin to maintain profitability.
3. Price Discrimination. Like any firm coffee shops are seeking to charge the profit maximising price. Many consumers have a very inelastic demand for coffee. This is because there are few close alternatives to coffee and it is a relatively small % of income. If the coffee had been £3.00 I probably would still have paid it. The challenge for coffee shops is to find a way to charge to more to people like me without putting off customers who are sensitive to price changes.
4. Charging for Extras. This idea of price discrimination can be viewed in more detail by looking at how coffee shops charge for extras. One example is the extra price charged for the “fair trade” version. Fair trade coffee involves paying poor farmers a premium for their coffee. This can help them to gain a decent living. Café direct pay a premium to farmers of about 45p per pound. However to make a cappuccino requires only ¼ an ounce of coffee. Therefore the extra cost should be equal to less than 1p. However most coffee shops charge a premium of at least 10p. (1) This means most of the extra price goes in higher profit to the coffee shops.
However there are many customers who are price insensitive therefore they do not mind paying an extra 10p. In effect they are paying a premium for enjoying coffee with a conscience. From the firms point of view they are grasping consumer surplus from those with inelastic demand.
Other extras on offer at Costa coffee.
5 oz Soya milk (instead of milk) 30p
Decaffeinated 30p
Syrup 40p
Richie
Naybet
Well IMO zero corporate tax isn't idiotic, it's down right sane because normal people bear the burden of such a taxation but lets leave that aside for a second.
I'll illustrate the idiocy of taxing revenue by taking a high turnover, low margin business like Tesco.
Tesco took £67bn revenue and £3.7bn net income (i.e profit). So lets say we want to tax Tesco on revenue, if you tax them 5.5%, you eradicate their entire profit. Therefore taxes on revenue would have to comfortable less than this or risk spiralling prices and plunging stock figures. In reality, you likely couldn't tax a company for than 1% of revenue, likely less. Therefore for high margin businesses, this would result in a huge tax break and massive loss of revenue for the government. Not to mention businesses making a loss would possibly be stuck with a huge tax bill. Way to kill small start ups in their early years.
The idea is so ridiculous whoever suggested it clearly has no idea about basic economics.
southstand1882
Mitchell Thomas
Suggesting that profits would be the same under an alternative tax model, is ridiculous.
I also mentioned earlier that large corporations would have at least 12 months to become profitable and pay tax. If not, and revenue is over a certain threshold, we assume they're taking the tinkle, and revenues are taxed.
Tesco is a decent enough example. (and I'm sure they've never harmed small businesses!!!)
What would happen in reality :
- prices increase
- no more multibuys on microwave burgers
- alcohol is not sold for 0.0007p a litre
- increased competition from more traditional grocers
- reduction in alcohol related crime
- less burden on NHS
The alternative of course, is the current system, where it's ok for ME to be taxed at 50% even though I'm not making a fudging profit!!!!!!
And I'm supposed to sympathize at Tesco's 1%...and accept it makes economic sesnse!
Hahahahahaha. That is fudging ridiculous!
Steed Train
Clive Wilson
I bet most people who moan about it shop in large supermarkets. If these companies paid more tax they'd simply pass it on to the consumer. But I bet you're happy to get all your cheapo supermarket food instead of going to more expensive local shops with limited product ranges
southstand1882
Mitchell Thomas
I'm more than happy for my grocery bill to triple, if:
A) it reduces the structural deficit and ultimately the total debt
B) it helps reduce my personal tax burden
How does investment fare under a revenue tax structure?
At the moment investment in plant, infrastructure or even staff only costs a company 76% of its cost. Under revenue tax you'd be charging a company 100%. Hardly the way to promote growth.
At the moment investment in plant, infrastructure or even staff only costs a company 76% of its cost. Under revenue tax you'd be charging a company 100%. Hardly the way to promote growth.
Leeds Spur
Banned
Exactly. And in a competitive market the costs aren't passed on. Look at supermarkets. They hold prices down wen they can as its a proper functioning market. Unlike energy.
Leeds Spur
Banned
I've had a think. Isn't stupid at all.
These guys killed off the high street bookshop.
The world would be immeasurably better without them. If they are to be tolerated then they pay the fudging tax owed or fudge off.
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jts1882
Dean Richards
We could indeed do that.
But you were saying its the free market operating properly. Amazon operating in Britain are using the transport and legal infrastructure of this country. These things are paid for from taxes. Luxembourg are freeloading so distorting the pricing in the market.
A free market is one where market forces are left fee to set prices, not one where people are free to do what they want.
Broadening the argument, we need to move towards a system where people pay a proper price for products. This should include disposal costs of a product. A system where you buy cheap consumer goods and then expect the state to pay to dispose of it is not one where the free market is operating properly.
inkpenspur
Allan Nielsen
Just to pour more petrol on the fire (and another reason to detest facebook)
Facebook has been accused of taking the British taxpayer for a ride after experts suggested the company had depressed sales figures and that the website's average UK employee earned more last year than the whole social media network paid the exchequer.
The British arm paid its 90 UK-based staff an average of £275,000 each in 2011 while contributing just £195,890 to the Treasury's coffers, according to the firm's latest accounts filed at Companies House.
The website also reported UK revenues of £20.4m, a fraction of the £175m that media analysts estimate the firm made in the UK in 2011.
Most of the sales are believed to have been booked in the firm's international headquarters in Dublin, where they will attract lower corporation taxes.
Richard Murphy, of Tax Research UK, said: "The UK is being taken for a ride. Facebook is taking standard practice for these IT companies to a new high, or low, depending on how you look at it. The UK is giving the tax break and the Irish get benefit of all the tax on the sales."
The chartered accountant added that the arrangement between Facebook UK and its Dublin office suggests that only around 11% of total sales made into the UK are declared in this country – a standard industry mechanism whereby a UK-based company is paid a commission for the sales it generates by a sister company located in a lower tax jurisdiction.
Furthermore, Facebook UK's latest figures show that the company charged £15.4m to its 2011 accounts – which can be used to reduce future tax bills – as a cost of awarding its UK staff share options. Murphy said: "That appears to be £15.4m to reward £20.4m in sales. That makes no sense. The options must, of course, be based on the value of sales recorded in Ireland but the UK is bearing the cost of the tax relief on paying these options."
When asked if Facebook had chosen to set up its international headquarters in Dublin in order to lower its tax bill, a company spokeswoman responded: "We have our international headquarters in Ireland that employs hundreds and a series of smaller local offices providing support services all over Europe. Dublin was selected as the best location to hire staff with the right skills to run a multilingual hi-tech operation serving the whole of Europe."
Media research group Enders estimates that Facebook UK made £175m in revenues in 2011, which it predicts will increase to £236m this year. The company analyses factors such as how many advertisements are being placed on Facebook, the number of users and how long they spend on the site, as well as surveying advertising agencies and large advertisers.
Overall, Facebook UK reported a £10.2m loss in the UK last year, although the company appeared to admit that the published numbers showed little resemblance to how the business is trading.
Facebook has been accused of taking the British taxpayer for a ride after experts suggested the company had depressed sales figures and that the website's average UK employee earned more last year than the whole social media network paid the exchequer.
The British arm paid its 90 UK-based staff an average of £275,000 each in 2011 while contributing just £195,890 to the Treasury's coffers, according to the firm's latest accounts filed at Companies House.
The website also reported UK revenues of £20.4m, a fraction of the £175m that media analysts estimate the firm made in the UK in 2011.
Most of the sales are believed to have been booked in the firm's international headquarters in Dublin, where they will attract lower corporation taxes.
Richard Murphy, of Tax Research UK, said: "The UK is being taken for a ride. Facebook is taking standard practice for these IT companies to a new high, or low, depending on how you look at it. The UK is giving the tax break and the Irish get benefit of all the tax on the sales."
The chartered accountant added that the arrangement between Facebook UK and its Dublin office suggests that only around 11% of total sales made into the UK are declared in this country – a standard industry mechanism whereby a UK-based company is paid a commission for the sales it generates by a sister company located in a lower tax jurisdiction.
Furthermore, Facebook UK's latest figures show that the company charged £15.4m to its 2011 accounts – which can be used to reduce future tax bills – as a cost of awarding its UK staff share options. Murphy said: "That appears to be £15.4m to reward £20.4m in sales. That makes no sense. The options must, of course, be based on the value of sales recorded in Ireland but the UK is bearing the cost of the tax relief on paying these options."
When asked if Facebook had chosen to set up its international headquarters in Dublin in order to lower its tax bill, a company spokeswoman responded: "We have our international headquarters in Ireland that employs hundreds and a series of smaller local offices providing support services all over Europe. Dublin was selected as the best location to hire staff with the right skills to run a multilingual hi-tech operation serving the whole of Europe."
Media research group Enders estimates that Facebook UK made £175m in revenues in 2011, which it predicts will increase to £236m this year. The company analyses factors such as how many advertisements are being placed on Facebook, the number of users and how long they spend on the site, as well as surveying advertising agencies and large advertisers.
Overall, Facebook UK reported a £10.2m loss in the UK last year, although the company appeared to admit that the published numbers showed little resemblance to how the business is trading.
Richie
Naybet
So you don't believe any foreign company should be allowed to trade in the UK because they haven't paid taxes here? By extension, you must also believe UK companies shouldn't be allowed to trade in other countries because they haven't paid taxes there.
jts1882
Dean Richards
Why would you think that when its not what I have said and is contradicted by what I have said?
I have clearly said that companies should pay tax on profits on the business done in a country. Tax on profits on business done in the UK gets paid to the UK Treasury, regardless of where a company keeps its head office. British companies doing business in Luxembourg pay taxes on the profit from that business to the Luxembourg tax authority.
Its a very simple concept and is the basis of international free trade. Or was until companies paid their local politicians to introduce loopholes to the tax code allowing all the trade distorting money transfers to tax havens.