Minister McClay & National Government To Increase Cost Of Living For All.

From Rob Hosking behind the NBR pay-wall:

A stepped up effort against tax avoidance by multinational firms will feature strongly in Inland Revenue’s much-delayed compliance document, expected to be released within the week.

The document, Compliance Focus, is usually released at the end of July or early August and sets out the IRD’s priorities on tax for the coming year … The multinational dimension though is understood to be the main cause of the delay. Key to this is the impact of work by the OECD and other international agencies, along with other tax authorities, on what is called BEPS’ – base erosion and profit shifting - by multinational firms.

Put simply, this is involves a small number of high profile  firms – such as Amazon, Apple, Google, Facebook, Starbucks, and global rock bands such as U2 – shifting their declared profit, revenue and intellectual property to the most tax  advantageous regimes.

Let’s rewrite this to understand what is actually happening, remembering that taxation is a cost:

Minister Todd McClay and IRD will soon issue their document setting out the process required to increase the living costs of all hard working Kiwis. Minister McClay is effectively saying he demands higher prices for books, higher prices for the computer gear we all use, higher prices for that Starbucks latte over which to contemplate the higher costs of everything thanks to the tax take. While his department may have looked at the possibility of simply making our tax system more competitive, he's decided Kiwis have it too good, so by increasing the taxation cost of these firms, he can force them to raise the prices of their products and services.

Minister McClay is also saying that increasing the cost of taxation for these firms world-wide is a worthy part of a concerted one-world-tax-state attempt to slow up innovation in the private sector. Why would they want to squash innovation? Perhaps they are thinking this a good thing? Looking toward the new iPads coming out next month, I guess it'll mean we won't have to update our Apple shit so often. Who needs choice and freedom.

(Footnote: though by all means, send the IRD storm troopers in on that hypocrite Bono, who would strait-jacket us in those 'responsibilities' he won't wear himself.)

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