Monday, February 2, 2009

Guardian’s Tax Hypocrisy is Ridiculous

The multi-millionaire columnist Polly Toynbee is this morning ranting against tax dodging corporations in the Guardian. The paper has even set up a campaigning website with fancy interactive graphics. According to the their own annual report Guardian Media Group made £306.4 million before tax. Using astute tax planning and legal manipulation of the tax laws; such as the use of an equity owning trust and a Caymans Islands offshore corporation to avoid stamp duty, they managed to only pay get a rebate of £800,000 in tax last year. That is less than they paid the Guardian Media Group’s chief executive, Carolyn McCall, she got a package of £827,000 whereas so the media fat cats got paid by HM Revenue Commissioners a mere £800,000 in corporation tax. Unbelievable isn’t it?

Here it is in black and white:

 

GMG P + L

The hypocrisy of the Guardianistas is just beyond satire, they are starting a campaign to get corporations to pay more tax, just like they campaign to undermine private education yet themselves went to private schools, they rail against City bonuses yet pay the editor and CEO hundreds of thousands in bonuses. Media fat cats attacking City fat cats is just laughable. Polly says “it’s time to rattle and bang in protest at this outrage”. Quite. Guido has tried to mention this on the Guardian’s Tax Gap campaign blog to no avail…

UPDATE 11.55 : Richard Brooks from the Guardian’s “Tax Gap” blog emails to say they are going to explain the Guardian Media Group’s situation using the same approach they used on the FTSE 100 corporations. Incidentally, before anyone points it out, this blog is published by an offshore corporation owned by an opaque charitable trust, in a remarkably similar way to the Guardian set-up. However, crucially, this blog takes an editorial line which is hypocrisy free, Guido is opposed to most forms of taxation in principle: “Do unto others as you would have them do unto you.”

UPDATE 12.09 : As some have pointed out, that looks like an £800,000 tax rebate, rather than a payment. Even worse. No wonder the Guardian can afford shiny new fancy offices…

UPDATE 16.50 : Note amendments and strike-throughs, also note that the Tax Gap blog has now let Guido’s comments through. They also cite Richard Murphy as a tax expert who approves of GMG’s tax strategies. Richard Murphy is hardly independent, he is a regular writer for the Guardian. The Cayman’s dodge was tax neutral they claim. Except when, in the future, it comes to capital gains tax of course.

Saturday, January 24, 2009

Polly Should Look at Her Bosses’ Fat Cat Bonuses

The Tuscan redistributionist friend of the down-trodden, the three-house-owning, multi-millionairess toff, Polly Toynbee, is ranting against undeserved bonuses. With the colourful prose that earns her £117,000 basic (before book royalties, media fees and advances) she lays into the worth of “performance-related pay” and the bonus culture that sees loss making Northern Rock bosses get a 10% bonus.The loss making Guardian’s editor, Alan Rusbridger, got by on a total compensation package of a mere £544,000 up from £473,000 last year. A 15% increase as a reward for losing £26.4 million – no belt tightening for him. His boss, the Guardian Media Group chief executive, Carolyn McCall, was paid a package of £827,000, comprising a salary of £424,000, plus a bonus of £385,000 and benefits in kind of £18,000. An eye watering 90% bonus.

Handy having your friends, rather than shareholders, decide your pay isn’t it? Guido has said it before and he will say it again, Polly merely dislikes the “wrong type” of rich people.

Incidentally, GMG have always been adept at using the Scott Trust and other dodges to minimise tax charges. Guido congratulates them on achieving an effective tax rate 4.99% last year. Remember that the next time Polly Toynbee calls for higher taxes and everyone to pay a fair share.

Tuesday, January 6, 2009

Clearly Blurred

More profound insight from Steve Richards in the Indy this morning:

“The dividing lines between the parties remain blurred.”

Tuesday, 6 January 2009

Hold on a second:

“It’s taken a recession for Brown to be candid about what it takes to make a fairer society. Suddenly the dividing lines in British politics are vividly clear.”

Tuesday, 25 November 2008

Still, it fills the space, here as well as there.

Wednesday, November 26, 2008

VAT Charade Shows Politicians in a True Light

Gordon’s dithering now appears to be the official government macro-policy stance. We all remember the introduction of the 10p tax rate, the disastrously implemented abolition of it, then Gordon being forced to compensate losers he denied existed. We can see with this inadvertent release of the Treasury document on the implementation of the immediate VAT cut and the planned subsequent VAT hike, how Gordon’s government really operates:
  1. He isn’t able to tell the voters the truth.
  2. He dithers: clearly the intention is to hike VAT later to recoup the revenue lost from the VAT cut now. They were planning to announce that. Cowardice got hold of them and they backed away from admitting it at the last moment.
  3. Incompetence: they hastily re-jig the Pre-Budget-Report to hide this intention, but neglect to delete the truth from all the documents released and fail to fully recalculate the figures. The numbers now don’t add up and there is a £100 billion black hole unexplained. The suspicion is that other tax hikes are being hidden.
These are indeed serious times, so this kind of low political maneuvering is not just politically dishonest, it further damages confidence. It also shows politicians in the worst light, Guido would argue it actually shows them in a truthful light. World weary columnists like Michael White and Polly Toynbee say that Guido’s political analysis is flawed by his hostility to politicians. Guido argues that the public interest is ill-served by pundits who are too sympathetic and close to politicians.

Well here is a chance for them to demonstrate their superior powers of political analysis of this fundamental dishonesty with the voters. Go on Michael/Polly, stop sneering in the margins, explain how this is in the public interest and not narrow party electoral interest. Go on, for once: justify this behaviour.

Thursday, November 20, 2008

Kaletsky v Tories

The Cameroons should take heart from Anatole Kaletsky’s condemnation of their approach to economics. Kaletsky’s heyday is long past as Mister-E-Man notes on Nick Robinson’s blog -
The same Anatole Kaletsky who in January of this year, in his Times articleGoodbye to all that: the worst is over for the global credit crunch, predicted that…

…conditions are not nearly as bad as the headlines and market pundits suggest. In Britain, there seems to be almost no chance of economic and financial disasters comparable to those suffered from 1990 to 1992. …I believe that the global credit crisis, far from taking a turn for the worse, is now almost over…. There will be no US recession. …Stock markets around the world will rise in 2008.

Shock horror – Cameron must be devastated not to have this prophetic economic genius on-board…

Anatole Kaletsky is long and very wrong.

Thursday, October 30, 2008

Glenrothes : Punters V Pundits, Round II

Over at Politicalbetting.com Mike Smithson is encouraging the punters to vote on who they think is going to win the Glenrothes by-election – Labour or the SNP?
  • As of 0900 this morning the punters (after 200 votes) are splitting 61% for the SNP and 39% for Labour.
  • Over on PoliticsHome the PH100 Index “daily tracker of uk insider and expert opinion” is calling it 61% / 31% for Labour to win. Strikingly inverse proportions.
Over on Betfair the punters are putting their money where their mouths are and making the SNP odds on favourites. Back in July the punters made fools of the pundits over the outcome of the Glasgow East by-election. The pundits are as fickle as teenage girls, the punters are more calculating.

The London based punditry are out of touch, they talk too much to each other. Our old friend Tom Watson has been briefing the press that Labour will win Glenrothes and this will be a great victory for Gordon. He has convinced Gordon to stake what little political capital he has on a Glenrothes comeback campaigning in the constituency. However, as Ben Brogan has detected, so chronic is the shortage of local activists and supporters Labour are press-ganging English Labour MPs and Northern CLP activists to trek past Hadrian’s Wall to help in the constituency. Not exactly a sign of a forthcoming resounding victory.

Guido thinks the punters not the pundits are right, again. Gordon’s personal visit should, if the curse of the one-eyed son of the manse still holds, have doomed Labour’s candidate. Labour are throwing the kitchen sink at this, heck the 10p tax bailout cost a few billion during the Crewe by-election, this time the bailout of Scottish banks cost tens of billions for this by-election. It will be close…

Wednesday, October 15, 2008

Wrong Kind of Rich?

Is Guido the only one who finds it a bit of a cheek that Will Hutton and Polly Toynbee are media millionaires who make their money out of condemning other rich people? They both have homes in the country and in London? Polly famously also has her home in sunny Tuscany, yet they endlessly tell us how they deplore inequality. They both sell books in large numbers and their columns are well rewarded beyond the dreams of the average and minimum wage workers they cry tears over.Guido is not going to plead personal poverty, risk brings rewards. What have Hutton or Toynbee ever produced besides words on paper, how many jobs have they created, how many businesses have they financed? Have they ever had to make payroll at the end of the month? Worried about how they were going to pay staff?

Why is making millions from pontificating (as they do) morally superior to making millions from investing in and running companies? It seems that out and out capitalists are the wrong kind of rich whereas out and out media pundits are the right kind of rich, akin to how the aristocracy of old always looked down on those in trade. Remember their own substantial wealth when they condemn capitalism.

Who really has unjust rewards – those who create wealth and jobs or those who condemn them?

Sunday, October 12, 2008

Hutton & Polly v Mises & Milton

Listening to Will Hutton and Polly Toynbee you would think they were actually monetary economists when in reality they are just soundbite savvy talking heads spouting the latest fashions of the metropolitan media elite. Both property millionaires in their own right, three-houses-Polly and Hutton have substantial family stakes in the property market. If they had such great economic foresight would they have got so badly caught out? Rumours circulate as to the viability of Mrs Hutton’s extensive property portfolio.

Toynbee has now realised that Gordon is staying and that her flirtation with David Miliband was just a passing fancy. Her tune has changed, now saying (once again) that Brown is the man for our times when only weeks ago she was telling the cabinet they were spineless not to get rid of him. Laughable.

Polly’s advice and economic genius is as suspect and as reliable as her loyalty to whichever politician she is championing this month. At the beginning of the year she was still loyal to Gordon and chiding Cameron for his new year message which she claimed

smacks of callow point-scoring, with his five repetitions of “Labour’s hopeless” – and it will look even thinner in retrospect in a year’s time if Brown has steered through economic rapids without most voters feeling any adverse effect.

She was confidently predicting

A minor slowdown with neither inflation* nor unemployment rising will see Brown’s old “no boom or bust” boasts triumph this time next year.

Guido suggests we leave Polly and Will to their studio soundbites and ignore their siren voices – they have been advocating their brand of redistributive social democracy as the solution to everything for decades. If policy makers are looking for guidance on avoiding a depression (alas a recession is upon us already) they should dust off the works of Ludwig von Mises and Milton Friedman – Mises wrote the seminalThe Theory of Money and Credit. If this book had been read by more central bankers outside the Bundesbank we would not be in this mess. Guido once listened to an LSE lecture by a Bundesbank board member speaking in reverential tones about Mises’ thinking. He is the high priest of monetary theory.

If history is not to repeat itself then reading Friedman’sThe Great Contraction, 1929-1933should be a priority. If you think this is irrelevant to the state we are in you should note that the current Federal Reserve chairman, Ben Bernanke, pays tribute to this work and is quoted in the introduction to the current edition. Whereas Mises is heavy going, Friedman and Schwartz are essential reading.

Guido can summarise the primary policy response to the situation we are in succintly : cut interest rates, to lessen the pain of the inevitable reckoning.

Saturday, October 11, 2008

Guardianistas Frozen Cash

The Guardian Diary mocked the Daily Express for recommending investing in Icesave last week on the very same day that the firm collapsed.

Those in ice-houses should be careful, for only a fortnight earlier where was the so smug and told-you-so financial pages of the Guardian telling readers to put their hard earned savings?

Harvey Jones picked ten of the best places to put your cash, guess which was his number one destination?

Do you need a clue? You’re getting colder….

Thursday, October 9, 2008

Where Have All the Capitalists Gone?

Cameron’s Conservatives seem to be fair weather friends of capitalism, even the FT’s in-house free market philosopher, Martin Wolf, has abandoned free enterprise for banker bolshevism. Besides Guido only Heffer in the papers remains a strident capitalist tool, managing to quote Ayn Rand approvingly this morning.
Ruth Lea, once a Thatcherite free market scourge of wet Conservatism, seems to have taken a surprising turn for the worse in the last few months:

 


Seen Elsewhere

PC Worries Prevent Police Protecting Young Girls | Jill Kirby
Miliband Should Win Rochester | Martin Kettle
Thatcher Minister Sir John Nott ‘Voted for UKIP’ | Times
Time to Listen to Drugs Experts | Guardian
Drug Laws Don’t Work | Times
Our Moral Duty to Cut Taxes | David Cameron
Greens Ahead of LibDems | Guardian
Channel 4 to Spoof UKIP Election Win | Guardian
The Threat to Press Freedom | Paul Dacre
White House Scoop Strategy | Post
Labour Council Retweets BNP Endorsement | HandF Forum


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