Lewes Forum thread

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That's how it is...

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On 24 Jan 2016 at 9:26am Mark wrote:
Well it seems that we're all OK with the idea that Google don't really have much obligation to pay anything much into the exchequer. The tab is going to be picked up by other means.
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On 24 Jan 2016 at 11:06am observer wrote:
Worth watching BB2's 'Britain's trillion pound island - inside Cayman' on catch up. Contained a reasonable assessment of where we're heading. Without the new old Labour there would have been no mouthpiece to condemn Osborne's ridiculous hype on such a pitiful sum from Google.
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On 24 Jan 2016 at 4:31pm Paul Newman wrote:
Ok, imagine Lewes was supplied with Milk in the 18th century by a few farms about the place and the price was set in Lewes market or just in the shops or dairies or something. Now suppose Lewes decided to impose a tax on the people transporting milk.
Well as they have rivals there would be little slack so in effect we would just have increased costs of Milk delivery and Milk would duly go up in Price .
In fact Companies stock expertise in the work place longer than any other surplus and it might be that they would be able to cut salaries but basically the tax is paid by the milk drinkers of Lewes
There is another effect. If you increase the Price demand will go down along the demand curve so the production of milk required would also drop to match it
This would cause unemployment possibly the complete failure of the weakest market player
So in normal market conditions you can see that taxes on Companies are paid by consumers, employees and in unemployment .
I think this basic economic model might be useful when the free money ( big company version)is flagged up. Is it operating in a competitive market or not is the only question and not an unreasonable one in this case IMHO ?. I suspect it is not and more could be squeezed, nothing of any relevance to the £75 billion deficit though and there would be a cost to this country in advertising our disinterest in attracting large companies to invest here.
Basically this sort of thing it is a fraud which along with many is designed to allow those who want more pubic money to pretend it won`t come from increased borrowing or the tax payer
That is the only place it can come from and Banks, evil multi nationals et all are just so much sand thrown in the air .Lews is full of people on the state payroll and thats why this sort of thing gets an airing. Simple stuff
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On 25 Jan 2016 at 10:13am Mark (the other one) wrote:
Words fail me Paul. Why on earth do you waste your time in this way? The flipping 17th century milk company (why a milk company?) needs roads to travel on. It benefits from having skilled drivers.
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On 25 Jan 2016 at 4:39pm nevillman wrote:
People with wealth invest it in a business like google and get a share of the profit as their reward. If this is taxed their income is reduced. Unless the tax on the profit is so high that they would prefer to do nothing with their wealth then they will continue to invest. The same applies to the financial institutions that also have wealth which they invest. Really don't understand the milk bit. Taxing and spending by government is just forcibly transferring money. If wealthy individuals and companies don't like that I understand but do not sympathise.
 
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On 26 Jan 2016 at 3:53am Paul Newman wrote:
Nevillman( fellow Nevillman actually )
The milk thing was an attempt to show that in a functioning market a tax on suppliersis paid by consumers ( as well as in unemployment )
Taxing Companies is not free money, that money must come from somewhere. On that we agree , but you think that the tax will be paid by ” wealthy investors” who will continue to invest until they are better off putting their cash in a sock under the bed .Not so.
The key concept here is “Normal Profit”, which is defined as a cost by economists, the cost of investment / entrepreneurial activity . That price is set in its own market ( usually in shares ), if a Company fails to create it over time it will fail .If it is able to make more … ( “supernormal “ profits ), the other competitors will be attracted to the market until all are making “Normal profits “ again .
On the road to failure a Company’s share price will fall expressing the movement of “wealthy /institutions” into other opportunities and the banks providing credit will pull out . We see this in real life regularly do we not? As you will see the “wealthy individuals and pension funds “will not generally suffer.
As taxes must levied on classes of Company not individual companies to work ( for obvious reasons ), all they do is increase the cost of production which increases the price at which the product must be sold in order to make “Normal” profits .So we are back where we were . The tax will be paid by the consumer, and , possibly in unemployment as less will be demanded at the new sustainable market price.
In real life there may well be barriers to entry allowing super normal profits. Arguably Google is in this position but that is the question, not “ Why not screw those wealthy investors “.
On Companies using infrastructure and social capital . That is only to say people use these things which is why taxes are a good thing . Different taxes however have different effects .Do you wish to dissuade people from spending , from earning, from buying food from buying luxuries , from using the internet , which ? .
The choice is not pay tax get the money form some disembodied “Company” and phantom” wealthy people” . That is just the magic money tree again, a way pf pretending there are not choices to be made between tax borrowing and spending . There are; as the vast majority of the British people understand
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On 26 Jan 2016 at 2:00pm nevillman wrote:
I am fully conversant with the concepts of normal and abnormal profit but thank you for attempting to explain your position. Getting google to pay reasonable tax on their profits in the UK is not 'screwing those wealthy investors'. Fear of competition should mean that the tax comes out of abnormal profit. You are right that the question of why there appear to be barriers to entry is important and should be addressed but history shows us that competition will come. Look at tesco's perceived market dominance of only a few years ago and where they are now.
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On 27 Jan 2016 at 8:04am Mark wrote:
Despite ALL of your remarkable effort I think that the vast majority of economists would agree that your argument here is utterly ridiculous Paul. Try again if you want. Explain why requiring a vastly profitable company in a wildly restricted market to pay tax is "magic money tree" thinking.


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Cliffe Tableau 2015 24:132
Cliffe Tableau 2015

Shame they won’t resurface it at the same time.
The central white lines are non existent as are the cats eyes
That road is... more
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