Bill Carmichael: MPs posturing over tax rules

Labour MP Margaret Hodge is furious that Vodafone will not pay any tax to the UK Treasury on the £84bn sale of its stake in US mobile phone company Verizon Wireless.

And Julian Smith, the Conservative member for Skipton and Ripon, said he was shocked and disappointed that Yorkshire Water had not paid a penny in corporation taxes despite paying out £250m in dividends to shareholders.

Let’s get one thing straight; as even the MPs concede, both these companies 
are acting entirely within the law – laws made by precisely the same politicians who are now getting their knickers 
in a twist and bleating that the system 
isn’t “fair”.

Paying taxes isn’t a matter of morals – it is a matter of law. If the system isn’t “fair” then it is the politicians who made the rules who are at fault, and not the businessmen and women who obey them.

And if the politicians think the system should be changed they are in a perfect position to do something about it – they are, after all, elected as lawmakers.

What isn’t “fair” – and is in fact downright illegal – is for politicians to bully companies to pay more tax then they are obliged to.

If company executives take cash that rightly belongs to shareholders and hand it over to the Government when they aren’t required to by law, that is theft, pure and simple.

And if we expect companies to pay taxes, not according to the strict and transparent rule of law, but instead on the whims of politicians who arbitrarily decide what may be considered “fair”, then we are on a slippery slope towards cronyism, corruption and tyranny.

Yorkshire Water pointed out that the reason it paid no corporation tax was because the government had designed 
a system that gave tax breaks to companies to encourage investment in infrastructure projects – and that is precisely what it is doing, spending £1m a day improving water quality and protecting communities against flooding.

And the reason Vodafone is paying no UK tax on the sale of Verizon is because in 2002 the last Labour government introduced an exemption on capital gains tax for companies when they sold shares in other firms.

And who was a Minister in that Labour government who helped vote the 2002 Finance Act into law? Step forward Margaret Hodge MP!

A laughing stock

In one of his many lofty speeches full of windy rhetoric, US President Barack Obama rejected the cowboy diplomacy of his predecessor George W Bush and promised to “reset” America’s relations with the world.

Even at the time it sounded like a cheesy advert for Coca Cola. Muslim nations would learn to love the US, traditional enemies such as Iran and Russia would become firm friends and peace and harmony would rule throughout 
the globe.

To quote Sarah Palin, how’s that hopey-changey stuff working out for ya?

Well, much of the Middle East is ablaze, Iran is pouring petrol on the flames, Muslim nations hate the US more than ever and relations with Russia are at their lowest point since the Cold War.

Worst of all tyrants from some of the world’s nastiest regimes are in defiance 
of the West because they have twigged that Obama is little more than an empty suit who lacks the will to impose US power for the good of liberty.

Machiavelli wrote that it is better to be feared than loved, but either is preferable to being openly laughed at.