Bill Carmichael: Firms pay price for obeying law

In recent days David Cameron, Ed Miliband, Nick Clegg, the US Congress, the EU, Oxfam, Christian Aid and the House of Commons have all ganged up to give the wealth creators of this world a good kicking.

In the US, Apple – one of the most brilliantly innovative companies on the planet – was summoned for a dressing down before a congressional hearing, its executives treated little better than common criminals.

Here in the UK, Google was dragged before the House of Commons to be given a finger wagging lecture on “fairness” by sanctimonious Labour MP Margaret Hodge – herself a multi-millionairess thanks to inherited wealth.

The EU and the G8 meeting next month will both target successful companies and Cameron, Clegg and Miliband, who have never turned a profit in their lives, are all vying with each other as to who can impose the most punitive taxes on wealth creation.

And what exactly have these companies done wrong? As far as I can make out they are being persecuted for simply obeying the law.

Politicians make the rules, including on how much tax we have to pay. Companies and individuals are obliged to obey those rules. They are not obliged to pay a penny more than the legal requirement. In fact, companies have a duty to their shareholders to minimise their tax bill.

No one pays more tax than they need to. Even wealthy left-wingers – such as Ken Livingstone and Jimmy Carr – employ all legal means to reduce their taxes.

If politicians don’t think the tax system is “fair” – whatever that means – then it is within their power to change it.

What is not acceptable is for politicians and charity campaigners to gang up to bully and intimidate companies to pay more tax than is required by law. That is a sign of a capricious and oppressive government.

The argument goes that if all companies were forced to pay their “fair” share of tax then all our problems, including world hunger, would be solved.

Colour me sceptical. If we take the money off the people who created it and give it to politicians, they’ll use it to end world poverty? Really? If you are so blindly naïve to believe this then I’ve a Minster in York I’d like to sell you at a bargain price.

Personally, I’d rather more of the
 wealth stayed with the innovators where it can be reinvested to produce jobs and fantastic new products that can make our lives more productive, rather than being wasted on MPs’ expenses and ever increasing benefits for those who prefer 
not to work.

But even if you believe in the virtues of big government, the way to increase the money available for public spending is not by increasing taxes but by reducing them.

The reason that Apple and Google funnel so much of their business through Ireland is because corporation tax there is about half the UK rate. If the UK reduced its rate to below Ireland’s, then these companies and thousands of others would relocate to this country and the taxes they pay would flow into the British treasury, rather than the Irish one.

We’d be taking a smaller slice of a vastly bigger pie, and would be better off as a result.

Governments have no money, other than what they confiscate from productive citizens. Governments do not create wealth or produce jobs.

Everything we value in society – the schools, hospitals, roads, and welfare benefits – are the result of the actions not of governments, politicians and bureaucrats, but of hard-working individuals and successful companies.

Instead of persecuting and vilifying these wealth creators and innovators, we should be thanking them, nurturing them and welcoming them to our shores.