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If we tax the multinational corporations will they leave?

Written By: - Date published: 8:27 am, May 8th, 2016 - 151 comments
Categories: act, capitalism, class war, Globalisation, making shit up, political parties, rodney hide, tax, the praiseworthy and the pitiful, you couldn't make this shit up - Tags:

Don Brash Rodney Hide the ACT asylum

Rodney Hide is a member of ACT, a party of the 1%.  Not only does this reflect the party’s support in the polls but it also reflects who the party supports.  He is a former botanist who comments occasionally on economic issues.  I think he should stick to botany.

In the Herald this morning he makes an extraordinary claim that if we tax multinationals properly they will pack up their bags and leave New Zealand.  Putting to one side questions of why they are not already being paying their fair share this suggests that they are motivated by a doctrinal insistence of starving the state of resources at all costs rather than making a profit.

He insults the intelligence of ordinary kiwis by stating that they do not know how much tax they are paying.  Funny that.  Pretty well everyone I know is well aware of their gross pay.

He then makes the bizarre claim that a company tax is nothing more and nothing less than a withholding tax to make sure the shareholders pay their share implying that shareholders do pay their share.

This ignores the creative accounting used by the likes of Compass whereby things such as transfer payments and “loans” that are not are used to make sure that little if any local profit is made and tax is paid.  Even if a foreign shareholder was obliged to pay tax of a multinational’s local profits there is none so no tax is paid.  Instead the transfer pricing or loans makes sure that the profit is earned in a jurisdiction where the tax is minimised.

Along with the use of foreign trusts this particular technique is responsible for much of the transfer of wealth to the 1% that has occurred over the past couple of decades.  Hide’s failure to mention it suggests that at best he has no idea what he is talking about.

His article reaches a crescendo of stupidity with this passage:

The more our Government taxes [multinationals] the less they will invest and do business in New Zealand.

The only losers are New Zealanders.

Imagine how much investment there would be if their returns were taxed entirely away. Who would be the losers? The multinationals? Or Kiwis?

The demand for multinationals to pay more tax is stupid and counterproductive.

But it’s not going to end. The illusion and deception are here to stay – and the fiction is certainly one that our politicians are anxious to perpetuate.

I am not aware of any proposal to tax a multinational 100% of their profit.  Holy false equivalence.

Admittedly some are that stupid and that opposed to paying their fair share of tax that they will make irrational business decisions just so that they can avoid contributing to the cost of running a country.  But most realise that it is crazy to turn down a perfectly good business proposal because of some inbuilt resistance to sharing the love around by paying some tax on the profit they earn.

The article reminded me of something that George Monbiot wrote a few years ago when the then UK Government proposed to increase corporate taxes.

It’s a bitter blow. When the ­government proposed a windfall tax on bonuses and a 50p top rate of income tax, thousands of bankers and corporate executives promised to leave the country and move to Switzerland. Now we discover that the policy has failed: the number of financiers ­applying for a Swiss work permit fell by 7% last year. The government must try harder to rid this country of its ­antisocial elements.”

If there is a profit to be made you can pretty well guarantee that a multinational will continue to sell its goods in the country.  Even if it has to contribute to the cost of roads, schools, education and social welfare that makes sure that local kiwis can continue to access and afford to buy their goods and services.

151 comments on “If we tax the multinational corporations will they leave? ”

  1. Pat 1

    “If there is a profit to be made you can pretty well guarantee that a multinational will continue to sell its goods in the country. Even if it has to contribute to the cost of roads, schools, education and social welfare that makes sure that local kiwis can continue to access and afford to buy their goods and services.”

    and if a multinational doesn’t then a local entity will….if there is demand, one way or another it will be met…and the bonus is the local entity will not wield more sway than Parliament.

    • stunnedmullet 1.1

      “and if a multinational doesn’t then a local entity will….if there is demand, one way or another it will be met…and the bonus is the local entity will not wield more sway than Parliament.”

      yes .. but this doesn’t really solve the tax problem as it’s the type of rort that Apple products are supplied in NZ whereby the local supplier of Apple goods in NZ buys the products at close to selling price in NZ and makes no to very low local profit and would also no doubt be paying a “marketing/branding services” fee to Apple corporate which would be set up in a low/no tax country.

      This or a version of it is the modus operandi of all the big corporates to shift their tax burden into low/no tax jurisdictions….and yes it stinks …..

      • Pat 1.1.1

        you ignore the fact that the given reason for the multi nationals leaving is because the tax loopholes have been closed…..it is the realignment of taxation that is the premise.

        • stunnedmullet 1.1.1.1

          You commented that a local entity will mop up business/sales from a multinational exiting ….I provided an opinion of why this might not lead to any increased tax take locally.

          • Pat 1.1.1.1.1

            wrong…the operating costs will not be able to be falsely inflated to avoid tax by a local entity supplying a multi nationals product …it is this allowed false accounting that facilitates the avoidance of tax….combined with the deliberate underfunding of the regulatory bodies to monitor and enforce.

            • stunnedmullet 1.1.1.1.1.1

              OK Pat explain to me how you would (acting as the IRD or the government legislating) enforce a local NZ operating company unrelated to the overseas supplier having to purchase the product/service at a price allowing a reasonable margin so as to allow a taxable profit for the company in NZ as per the (I think) current model that Apple utilises.

              • RedLogix

                It;s fairly easy; you look at the corporate’s global figures, you look at their gross margins world wide and then require they report their local income at comparable rates. It’s not hard to make one-off exemptions for setup costs or one-off events that are clearly justifiable.

                Not all global corporates dodge local tax. The one I was associated with always reported a sound local income and paid tax to IRD accordingly.

                Primarily this is a matter of ethics, not rule-making. The accounting and legal professions must either police their ethics rigorously or have that privilege removed from them.

                • tc

                  +100
                  It’s a moral decision and these companies avoiding paying their fair share should be seen as such, immoral and unethical. Like you needed to be told anyway folks.

                • Colonial Viper

                  And let’s not give the politicians – who entrench tax avoidance loop holes in the legislation – any passes either.

                  Further the longstanding “ethics” of the legal and accountancy professions is to serve their paying clients.

                  Not to serve their country.

                • stunnedmullet

                  You missed this bit….. ‘a local NZ operating company unrelated to the overseas supplier’

                  Your comment that “this is a matter of ethics, not rule-making”

                  Many multinationals are not in the least ethical so it will be about rule making and i’m interested in how as a country we would go about those rules.

                  • RedLogix

                    In what sense ‘unrelated’?

                    If the local company is truly unrelated and it reports no profit because the supplier prices it is paying is outside of it’s control, then it’s just a shitty business model and will eventually fail and lose all it’s shareholder investment.

                    On the other hand if the local company … despite being an NZ based entity … actually reports to a larger corporate based overseas; then it isn’t really ‘unrelated’ is it? In this case the local company can run at a no profit or even a loss, and the ultimate beneficial owners will still make plenty of untaxed profits.

                    • stunnedmullet

                      You still don’t get what I’m saying – let’s take the apple example again…

                      NZ company buys/imports new Apple products from Apple International at a price let’s say x – they then sell to apple resellers retailers in NZ at the price lets say X x 17% + GST who then on sell to the public.

                      The original price x bears no resemblance to the actual production price plus a reasonable margin of the product and the ability of any jurisdiction to claw back any of the consolidated profit from Apple international is limited in the extreme.

                    • RedLogix

                      That’s just the former of the two options; the shitty business model where no-one local is making any money. Eventually a competitor will come along and offer a better product at lower cost, with more margin.

                      But of course in the meantime by not paying fair tax Apple is cheating, and gaining an unfair advantage on competitors who do pay tax. And this applies regardless of where the tax is paid.

                      You are correct that in this case the cheating is strictly outside of the NZ tax jurisdiction; but this does only argues strongly that we should join with other nations in pursuing, prosecuting and shutting down cheats who use tax havens. Entities that exploit the public domain to make money, but refuse to pay for it by not paying their taxes are committing theft pure and simple, but on a scale so vast most people don’t even start to imagine it.

                      The average person gets all upset when someone like them is caught stealing, defrauding or embezzling a few hundreds or even thousands of dollars. Yet somehow we’ve been conditioned to ignore it when a corporate like Apple steals billions.

                      Personally if it can be demonstrated that a corporate has been cheating on it’s tax, then it’s assets should be nationalised, it’s directors imprisoned for life and all the related assets of it’s shareholders seized. This would very quickly restore rigorous probity and ethics.

                    • Draco T Bastard

                      NZ company buys/imports new Apple products from Apple International at a price let’s say x – they then sell to apple resellers retailers in NZ at the price lets say X x 17% + GST who then on sell to the public.

                      Oh knows, Apple’s sales will drop…

                      Actually, they’re dropping anyway as other products just as good but much cheaper come on to the market.

                      BTW, that’s a really bad business model and looks like it came out of the 19th century. A more modern look would be multiple small businesses across the country directly buying from Apple and then on selling here. But, personally, if I was Apple, I’d be selling the phones directly to the customer via website and direct delivery from the factory. Cut out the middlemen, the ticket clippers.

                    • Richardrawshark

                      Clipping the ticket by direct internet sales didn’t work for me when I bought 1200 dollars worth of telescopes from Aussie got slapped with import duty at customs. So not sure if apple can get away with directly selling them online.

                      Which beggars the question, do we not tax companies on imports? Is it just if we a private buyers?

                    • Draco T Bastard

                      Clipping the ticket by direct internet sales didn’t work for me when I bought 1200 dollars worth of telescopes from Aussie got slapped with import duty at customs. So not sure if apple can get away with directly selling them online.

                      The import duties and such are paid by the businesses that sells them in NZ so that doesn’t change. It’s more that the local import businesses would go out of business as they’re simply not needed.

                      So not sure if apple can get away with directly selling them online.

                      It’s not about Apple or anybody getting away with anything. It’s about Apple getting full retail price for their products rather than wholesale and also about decreasing production to only what’s ordered.

                      The old model of the business producing as much as physically possible and then hoping that it sells is something that needs to go the way of the dodo. It started happening late last century but the internet makes it possible to go even further.

                  • Pat

                    they are not ethical at all so you don’t rely on ethics….simply state that if you wish to access our market your worldwide turnover and profit figures are available to NZ IRD for us to calculate the proportion of turnover in our jurisdiction to be subject to our tax rates….or alternatively sell your product to a local entity for distribution.

                • Once was Tim

                  “…..must either police their ethics rigorously or have that privilege removed from them.”
                  +100 @RedLogix (the attempts at cleverness by this site’s wonderboy is exceptional – even if it does end in a divorce – I attempted a reply, and I’m coming close to the “fuck it, Yeah/Nah” register/interrupt

                  I seem to remember they were amongst the staunchest proponents of all that ‘self regulation’ kaka when the neo-liberal religion began to take hold.
                  They were given that privilege on the basis of good faith essentially. It’s a shame they haven’t returned that ‘good faith’ to the benefit of society, and to the economy they profess to be such an essential part of.

                  I’m not sure why they were ever given the privilege in the first place. It’s not as though there isn’t adequate precedence for their fucking us all over in past history.

                  And then, as now …. Oh how history is repeating – it’s just that imperialism and empire has taken a different (and more complicated) form.
                  I’m not sure how far they want to push it all, but so far the signs aren’t good.

                  But when the shit hits the fan (or rather one of those dandy little air dispersers invented by the Dyson entrepreneur – but one that has the same splatter effect), I’ve no doubt we’ll all be expected to see them as victims and feel oh so fucking sorry for them.
                  We’ll also be expected to give them the benefit of the doubt, entertain all the various pleadings they’ll make (like “I was only following orders”), and so on.

                  Personally, I’m currently eliminating debt, re-imaging, ‘re-imagining’ myself using the same ‘learnings’ that we should have learned already, and ‘positioning’ myself for the new ‘entrpreneurial and ambushus whurl’ that’s expected of us (going forward, of course). BTW (that’s “by the way”), I found the route out a while ago – mostly it’s ….

                  I’m not so sure many of JFK’s ilk are prepared: I mean for that fyooocha goan forwid.
                  But yeah/nah/next
                  Roll on Monday eve eh? NZull toim for the first ‘tranch’ from that “European person” (lol lol lol – Fuck me! the signs from that announcement wreaked of desperation que?) . And then, down the track ….

              • Pat

                the same way you would any business…seeking costing and margin justification to determine whether it is a legitimate business activity.

                If as under the Apple model all profit is removed to say Ireland in the form of royalties, where is the incentive for the local operator to be involved?
                To be a viable business the local operator must make a profit over and above this which can then be taxed, Apple International can charge the local agent whatever they like for this but has competition considerations that can’t be ignored…..price competitiveness and market share.
                Currently Apple can manipulate these figures in house to suit any market scenario , legally….the non multinational local businesses cannot.

    • Draco T Bastard 1.2

      and if a multinational doesn’t then a local entity will

      Yep. Multinationals bring nothing of value to NZ but they sure as hell take a lot away.

      • Big Daddy 1.2.1

        Beware lumping all multinationals into the same basket. The one I work for employs almost 100 New Zealanders, all paid well above the so called living wage, supports dozens of local engineering companies and other businesses, earns the economy millions in export dollars and pays many millions of dollars in tax of all types

        • Draco T Bastard 1.2.1.1

          And, ah, why do we actually need the multinational to achieve all that?

          There’s nothing, absolutely nothing, that you list that we couldn’t have done ourselves without the dead-weight loss that the multinational represents.

  2. Andre 2

    And if a corporation is so antisocial that it would up sticks and leave rather than contribute to maintaining the society in which it operates by paying a fair share of tax, then good fkn riddance.

    • Sabine 2.1

      this.

      well said.

    • stunnedmullet 2.2

      Except in the rare situation where they supply critical services/goods.

      • Andre 2.2.1

        Can you name any corporates that supply critical services/goods that actually could simply leave, don’t have competitors that would immediately fill any gaps, and isn’t an SOE? Because I can’t.

        • stunnedmullet 2.2.1.1

          The only ones that spring to mind would be in the medical/medicines field.

          I agree it would be unlikely they would do so – the more likely outcome would be none of their new products would be made available in NZ.

          • adam 2.2.1.1.1

            I think the question was to name names.

            Being vague makes you look trollish.

            • stunnedmullet 2.2.1.1.1.1

              🙄

              Well how about the multinational pharma companies for a start ?

              • adam

                Again, which ones?

                • stunnedmullet

                  Any of them I suppose….Pfizer, MSD, Roche, Novartis…

                  Why do you ask ?

                  • Andre

                    Do any of those companies provide any products that don’t have a very near equivalent available from one of their competitors?

                    For instance, if MSD withdrew from supplying Gardasil to New Zealand, Cervarix is available from GSK.

                    • stunnedmullet

                      That’s a good question to which I don’t know the answer.

                      I’m thinking off the top of my head things like Herceptin and the new Hep C drugs that have just been funded may not have alternatives available ?

                      Anything that does have alternatives wouldn’t pHARMAC be tendering for anyway ?

                    • adam

                      So your argument stunnedmullet was critical supplies would be cut off, and in the end, that was one or two drugs.

                      So, not the end of the world then, just a puerile attempt at fear mongering on your part.

                    • stunnedmullet

                      Are you deliberately trying to appear thick Adam ?

                      A quick trip to PHARMAC suggests there are many hundreds of medicines supplied in NZ some will have alternatives some will not.

                      It is all moot until a change to tax laws are made to try and get the companies to pay there fair share and what if any is there response.

                    • adam

                      Changing your mind again.

                      So we have hundreds now, and some other company won’t step in?

                      What is it stunnedmullet, is it one or two or are you going for hundreds?

                      Come on, form an argument and stick with it.

                    • stunnedmullet

                      Nah – you’re welcome to do some research yourself, looking back over this thread you’ve done nothing apart from troll.

                    • adam

                      You don’t like being challenged do you stunnedmullet?

                      You were making a mountain out of a mole hill, so I called you on it, and this is your response.

        • Pat 2.2.1.2

          a more likely outcome is they would attempt to up their price…..something they already do.Why do they negotiate with Pharmac (which they constantly denigrate)…for the simple reason that if they wish to sell their product here, they have to.

          • stunnedmullet 2.2.1.2.1

            I don’t believe they are able to up their price if they have a contract with PHARMAC.

            • Pat 2.2.1.2.1.1

              contracts tend to be fixed in duration.

              • stunnedmullet

                Not for PHARMACs newly funded products they will all be evergreen, sure for their tendered products but they just re-tender them every 3 or 4 years

                • Pat

                  Evergreen contracts can still be terminated

                  • stunnedmullet

                    Yes and there will be consequences for doing so.

                    • Pat

                      there are consequences to every action….not necessarily negative

                    • Stuart Munro

                      One imagines that drug companies refusing to supply would find that former customers no longer supported their copyright. Generics would be a win that made present-day Pharmac look like the softest imaginable option.

        • Colonial Viper 2.2.1.3

          Can you name any corporates that supply critical services/goods that actually could simply leave

          Most suppliers of operating systems and software.

          It takes years and hundreds of millions of dollars to transition between systems.

          And many financial/banking institutions.

          • stunnedmullet 2.2.1.3.1

            Thx hadn’t even though of that…

          • Pat 2.2.1.3.2

            would depend on terms of contract….is a change to tax regime legitimate grounds to cease contract?

          • Draco T Bastard 2.2.1.3.3

            Most suppliers of operating systems and software.

            LOL

            Linux
            Xero

            And there’s probably more that I don’t know about. And, yes, sure, Linux isn’t specifically made in NZ but there are several people in NZ that do contribute to the development of one or another.

            The point is that no software is outside of our capabilities.

            All you seem to be doing here is engaging in the belief that holds that we just can’t do anything ourselves when there’s evidence all around you, if you bothered to fucken look, that we actually can.

            • RedLogix 2.2.1.3.3.1

              To a large extent I agree with this DtB.

              One of the most corrosive consequences of the neo-liberal madness in this country was the destruction in our belief in ourselves. For years we were told that NZ was a little remote backwater and there was no point in trying to get really good at anything because it was always going to be economically rational to import stuff ‘cheaper’ from overseas.

              Except all this ‘cheap stuff’ turned out to be remarkably expensive. It cost us our pride and a generation of kiwis who’ve no exposure to workplace excellence and high achievement.

              • Draco T Bastard

                Except all this ‘cheap stuff’ turned out to be remarkably expensive. It cost us our pride and a generation of kiwis who’ve no exposure to workplace excellence and high achievement.

                QFT

                I believe that it’s actively working against us developing our own economy and our abilities. All the ‘free-trade’ isn’t free – it comes at a cost that we shouldn’t be willing to pay but that cost hasn’t been spelled out well enough for people to understand it.

          • Andre 2.2.1.3.4

            Now that I’ve scraped my jaw back off the floor from the sight of CV appearing on the side of multinational corporates rogering us all, a few questions for people that know better than me on these issues.

            Financial transaction networks are a competitive market with multiple players, no? So when ProvencoCadmus went belly-up, for instance, it was a minor hiccup rather rather than a catastrophe, right?

            And the basic bank-to-bank financial network is operated by a consortium of the banks, with input from the Reserve bank, right? Not really a corporate that can just pick up and leave, right?

            Big software systems such as SAP, Oracle etc are not directly supplied, they are supplied, configured and maintained by one of a number of competitive consultant system integrators, right? So if the system integrator stomped off in a hissy fit, there’s plenty of others available to step in. Kind of like with Novopay. Disruptive, yes, but not disastrous.

            • Colonial Viper 2.2.1.3.4.1

              Now that I’ve scraped my jaw back off the floor from the sight of CV appearing on the side of multinational corporates rogering us all, a few questions for people that know better than me on these issues.

              On their side?

              Dude, I’m just underlining all the power points that the corporates can use against an uncooperative nation.

              And the basic bank-to-bank financial network is operated by a consortium of the banks, with input from the Reserve bank, right? Not really a corporate that can just pick up and leave, right?

              You advocate the nationalisation of this privately owned network infrastructure then?

              A major bank leaves, you think the reminder will simply pick up the slack without major disruption to the economy?

              ProvencoCadmus

              Plenty of retail outfits provide EFTPOS terminals yes. But the underlying network is where the real leverage is.

            • Colonial Viper 2.2.1.3.4.2

              Big software systems such as SAP, Oracle etc are not directly supplied, they are supplied, configured and maintained by one of a number of competitive consultant system integrators, right? So if the system integrator stomped off in a hissy fit, there’s plenty of others available to step in.

              Again, the system integrators are no big deal.

              SAP or ORACLE pulling out of supplying software to NZ would be. A lot of those system integrators would go broke over a couple of years.

              • Draco T Bastard

                Dude, I’m just underlining all the power points that the corporates can use against an uncooperative nation.

                The answer to that is actually NONE.

                A major bank leaves, you think the reminder will simply pick up the slack without major disruption to the economy?

                You mean like the BNZ leaving last century?

                The banks can leave, the people and their money will still be here. Unless you think that they’re going to take all their customers money with them?

                But the underlying network is where the real leverage is.

                And the government could take that up quite easily complete with the people (NZ citizens) who actually work it.

                SAP or ORACLE pulling out of supplying software to NZ would be.

                No, it really actually wouldn’t be.

          • Paul Campbell 2.2.1.3.5

            You mean like Linux? Lots of people in NZ know how to make products that use it

            • Colonial Viper 2.2.1.3.5.1

              A major development project to replace a legacy system would take years to complete, what would you do in the mean time.

              • Paul Campbell

                I used to port Unix to new hardware for a living – we used to knock one out in 6-8 weeks, I’ve done a bunch of linux ports over the years, porting the compiler takes longer that the OS itself.

                Systems are available from China, we still have a FTA with them and the gear they produce is far cheaper than the over priced stuff out of the US, our software engineers are as good as any on the planet, becoming a bit more self sufficient wouldn’t bve a bad thing and we’d end up exporting the results

      • Sabine 2.2.2

        please name the critical services and goods?

        I don’t think an Iphone, or Facebook is a critical service and or good.

        • Colonial Viper 2.2.2.1

          You own a business right? Have you ever reviewed what goods and services are critical for your business continuity?

          It’d be a bit shit if your connection or your customers connection to the local and international banking and credit system went away, wouldn’t it.

          And that’s not just the financial institutions. It’s the owners of the transaction networks, the providers of hardware and software to those networks, the big firms of private sector consultants and technologists who keep the whole system going.

          What would you replace that with?

          As a business owner I wouldn’t take any of that corporate infrastructure for granted, and neither should you.

          • Draco T Bastard 2.2.2.1.1

            It’d be a bit shit if your connection or your customers connection to the local and international banking and credit system went away, wouldn’t it.

            Why would it go away?

            It’s the owners of the transaction networks, the providers of hardware and software to those networks, the big firms of private sector consultants and technologists who keep the whole system going.

            You mean the internet that has multiple levels of connection disruption protection built into it?

            As a business owner I wouldn’t take any of that corporate infrastructure for granted, and neither should you.

            Should probably point out that it was all built by the government in the first place and then the fuckers in parliament sold it for peanuts.

          • Richardrawshark 2.2.2.1.2

            Kiwibank.

            • Colonial Viper 2.2.2.1.2.1

              What good is Kiwi Bank if all your customers are with other banks?

          • Sabine 2.2.2.1.3

            my very small business could for the largest part still continue even without stuff from the outside of the world.

            take computers for example.
            i am old enough to use a type writer with carbon paper. Fuck, i can write by hand, and use the NZ Post to transport my letters. Fuck if that would go the way of the dodo, as it most likely will, we could still employ people riding horses to deliver the mail. It would take longer that a blink of an eye, but its been done before and worked.

            accounts:
            I am old enough to do my accounts on paper with the aid of my brain.
            As accounts were done for centuries without computers and shit. And it worked.

            manufacturing:
            I make the stuff i sell. Hands are fucking magical, if you put your brain to it, they can make stuff. And it works.

            raw ingredients:
            other then two ingredients, all of my raw materials could be and are grown in NZ and can be sourced here. The two ingredients that i need to purchase from overseas are slated to disappear within the next 25 years, thanks global warming and shit. And i could still run my business without these two ingredients as they will be replaced with something else. As such is life.

            banks;
            i have no loans, no financial services are offered to me that I deem interesting enough to use.
            I could run my business as a cash only business, and would as now only use the bank to deposit money and pay bills. This can be done without software or anything, the good old fashioned way as it was done for centuries before the arrival of the computer.
            Fuck the templiers had a banking system that involved handwritten notes of ‘cheques’ and transported these notes by horsemen from one citatel to the next. And it worked.

            Frankly mate, you should try harder. And nothing you said, makes the point for companies to not pay taxes. In fact, if they – the non tax paying companies, that use our tax payer paid for infrastructure i suggest strongly that they start paying taxes. And if they don’t want too, they should pay a toll. Every time a silly little I – phone is coming to NZ it should be coming with a Toll for using the roads to be transported to the shop or the end consumer.

            All you are saying CV, is that without your little computer and gadgets, is that you are useless as doing stuff. Fucking sad man. And yes, we can very well live excellent lifes without even 90% of the shit that people think they need in their lifes.

            • Lanthanide 2.2.2.1.3.1

              Ok, good, so your small business will continue on as if it were the 1970s.

              I hope your customers are all foreign based as well. If you’re relying on local customers, then you might have a problem when unemployment is running at 30%+ since the majority of businesses can’t operate without those ‘essential’ modern services.

              • Colonial Viper

                Ok, good, so your small business will continue on as if it were the 1970s.

                There were fax machines and teletext machines in the 1970s. It was a bit more advanced than horse back messenger.

            • Colonial Viper 2.2.2.1.3.2

              All you are saying CV, is that without your little computer and gadgets, is that you are useless as doing stuff. Fucking sad man. And yes, we can very well live excellent lifes without even 90% of the shit that people think they need in their lifes.

              Interesting response, Sabine. Because I can guarantee that my industry – which has its roots in the 19th century – is far more resilient and less reliant on external material, technological and energy inputs than yours is.

              I make the stuff i sell. Hands are fucking magical, if you put your brain to it, they can make stuff. And it works

              The irony, oh the irony. Anyways, my hands are very well insured. And I dare say that I may know just a little bit more about hands and what they can do, than you.

        • Jenny Kirk 2.2.2.2

          Neither do I, Sabine.
          And my answer to the question posed on this post – If we taxed the multi-corporates, would they leave ? Is YES -let’s do that, and let’s see ’em gone !

        • Pat 2.2.2.3

          interesting exchange…..and is likely moot in any case….should there be a change it would only require the payment of a relatively low rate of tax on profit and it would not lead to the wholesale withdrawal of all international corporations, but it would level the playing field for their domestic competition giving us the opportunity to further develop in the same fields and perhaps replace some of these organizations down the track.

      • Draco T Bastard 2.2.3

        None of them do.

  3. Lanthanide 3

    Rodney Hide should tell the Australians that their new tax regime for multinationals isn’t going to work and they should just give up.

    On the other hand, in a few years time, NZ (and Rodney) will be able to see just how effective their laws are, and we’ll know for sure if Rodney is full of shit or not. I wonder if he knew just how easily this little outburst of his could be put to the test when he wrote it?

    Also I can well imagine that a stricter tax regime may delay the entry of a multinational into a country, but once they’re already here, it seems unlikely they would leave, or cease making investment decisions that would increase their returns.

  4. jcuknz 4

    A more practical and sensible approach would be to ensure any increase in taxation is made by all countries and not just NZ trying to foolishly lead the world to rightishness
    I believe this is happening and such countries will restrict flows to non-cooperating countries.

    • UncookedSelachimorpha 4.1

      Yes, while the multinationals seem invincible – a few countries banded together can still match them.

      • Colonial Viper 4.1.1

        The elite class of these countries are more loyal to these high paying corporations than to the citizens of their own nations.

  5. UncookedSelachimorpha 5

    The entire Monbiot post referenced above is worth a read.

    I work for a very large multinational. They are human institutions – and I remain surprised how sensitive they are to public opinion; like the Chinese government, they fear it.

  6. Paul 6

    If multinationals are unprepared to fulfil their part of a social contract, we are better off without them.

    And if Hide is advocating that companies don’t fulfil the social contract and we should submit to their blackmail, we are better off without him.

    • stunnedmullet 6.1

      We may indeed be better off without them, but will the people who use their goods/services be better off without them ?

      • tc 6.1.1

        They aren’t the only providers and NACT are all about the free market so not seeing that as an issue. The bludgers would spin it otherwise.

      • Draco T Bastard 6.1.2

        Probably as their society would be properly supported rather than being taken advantage of and losing wealth for no gain.

      • Graeme 6.1.3

        There will still be a demand for their services, and competitors will soon be looking for opportunities. It’s possible better choices might come along too.

        A competitor who’s dodging tax, underpaying staff or under-bidding tenders can cause a lot of trouble until they go bust.

    • Rae 6.2

      Did you see men in pin striped suits and fedoras, carrying violin cases, too?

  7. One Anonymous Bloke 7

    it is crazy to turn down a perfectly good business proposal because of some inbuilt resistance to sharing the love around by paying some tax

    This: can anyone say “gap in the market”?

    Watch as the wingnuts perform logical somersaults before face planting and breaking their teeth 😆

    • Nessalt 7.1

      Kind of like how we watch in awe of your ability to support labour no matter what

      • One Anonymous Bloke 7.1.1

        I vote Green you numpty.

        • stunnedmullet 7.1.1.1

          Really ?

          I thought you were died in the wool Labour.

          [lprent: Which really says that you are either not very observant or a complete idiot. OAB has been commenting here since soon after the site started, more than 8 years ago. OAB in my experience has never been exactly friendly towards the Labour party. The best I have ever seen OAB to be is vaguely hopeful towards Labour.

          Perhaps you should be less of a lazy dickhead and use the links I provide to look at peoples commenting history. They show up everywhere their handle is in the comment stream. ]

          • One Anonymous Bloke 7.1.1.1.1

            Add that to the twelve-volume encyclopaedia of things you’re completely wrong about.

            • stunnedmullet 7.1.1.1.1.1

              I’ll make sure to do so… although there isn’t much room on the book shelf left with all the volumes of fatuous statements of yours that I’ve noted down and had bound in leather.

          • stunnedmullet 7.1.1.1.2

            Protecting your hound and waxing lyrical about mens bits…well played lprent well played indeed.

  8. Colonial Viper 8

    Is Labour going to bring back its proposals for a Face Book tax, again?

  9. Keith 9

    Compass is a stunner and you have to assume Serco and any other multinational will be doing the same.

    Gifted taxpayer money and ending far better value for money, better quality catering provided by the hospitals with the alternative they provide that is reconstituted vomit, these crooks then syphon off profits back to head office in the form of “loans” to where ever that is located overseas, make almost no money here, or even a loss so we the taxpayer pick up the tab for that too. And according to Rodney Hide we should kiss their arses and thank our lucky stars we are so lucky to be ripped off by such a benevolent multinational.

    Hide is so stupid words fail me, as is this government for even entertaining this kind of shit. The only logic from this can be that those in National or connected to National are making money out of this.

    • tc 9.1

      Hide is not stupid, he’s earning his pay delivering this kind of spin on behalf of the hollowmen.

      He has no shame or ethics as his rorting proved but he ain’t stupid, just rat cunning and deceitful.

      Probably hoping he gets another turn probably as a nat list mp post shonky if they bring the act subsidiary in house after rimmer collapses what little votes they get.

    • Draco T Bastard 9.2

      Hide is so stupid words fail me, as is this government for even entertaining this kind of shit.

      Well, he’s either really that stupid (which is possible as most libertarians seemingly are) or he’s getting well paid to propagate the BS.

      • Sabine 9.2.1

        He is getting well paid to vomit up that shit.

        He is smart enough to know which side his toast is buttered on, and if it sinks his country, so fucking what, he will have enough somewhere in a trust to start elsewhere.

        it’s the rest of the population, for whom these two islands are the only place they can call homeland that can’t get out when shit hits the fan, that will pay the bill in the end.

  10. Rae 10

    Oh gee, golly gosh, imagine if Compass packed up their tents and left

    • Jenny Kirk 10.1

      and Serco ! wouldn’t that be great !
      oh – and also the gold diggers…. especially from the north.
      And could we do without the oil explorers ? We might save the last of the Maui dolphin if they go too.

  11. save nz 11

    If a multinational leaves because they don’t want to pay tax here, good riddance!

    If we are not getting the taxes from tax avoiders anyway, they clearly have no commitment to NZ or their employees and so their business can be taken up by a Kiwi company or a multinational that is committed to paying tax in this country!

    We might even get a living wages and jobs for Kiwis out of it, instead of this race to the bottom.

    • Draco T Bastard 11.1

      We might even get a living wages and jobs for Kiwis out of it, instead of this race to the bottom.

      QFT

      We’re getting increased poverty in NZ because we keep kowtowing to those who are doing us harm.

  12. Rae 12

    The answer to so many of the issues regarding taxation in this digital age, is a simple small financial transactions tax, or maybe a turnover tax, this taxing profit business is way too subject to “variables”.
    We would just need some sort of guarantee, a better one than the one that applies to GST that increases in percentages of take would be be VERY strictly limited.
    GST is a rort and should return to 10% asap

    • dv 12.1

      Yes a fTT of about the same amount as visa charges – (you know the convenience fee)

  13. vto 13

    The ACT Party think people make life decisions on the basis of self-interest and personal greed. This is the entire basis of their philosophy.

    I don’t see why anymore time should be wasted on people with such an off-the-planet misunderstanding of how life and people work.

    Less than 1% of the population agree with them and their philosophy.

    As such, Hide’s views on corporate tax will be similarly on planet pluto or some such out there body ………

    waste of space

    waste of outer space

    • Draco T Bastard 13.1

      The ACT Party think people make life decisions on the basis of self-interest and personal greed. This is the entire basis of their philosophy.

      The same applies to National’s leaders, but unlike Actoids, they hide it.

      As such, Hide’s views on corporate tax will be similarly on planet pluto or some such out there body …

      It’s Planet Key.

    • Henry Filth 13.2

      “The ACT Party think people make life decisions on the basis of self-interest and personal greed”

      The 1957 and 1975 elections amply illustrate that they certainly make political decisions on that basis.

    • Tricledrown 13.3

      No wonder he was on dancing with the stars

  14. If we tax the multinational corporations will they leave?

    According to their tax returns they weren’t here in the first place, so what would “leaving” actually consist of?

    • stunnedmullet 14.1

      A very good point.

      Their leaving would no doubt consist of closing their premises and laying off their staff so a net loss in PAYE and any other associated staff/marketing spend in NZ.

      Meanwhile punters such as myself will still access their goods via the internet.

      I think as suggested above a financial transactions or turnover tax may be the way forward but for anyone who thinks there’s an easy and quick fix I think they are deluding themselves.

  15. slumbergod 15

    Good. Let them F.O.

  16. Foreign waka 16

    Multinationals will leave if the profit is not high enough – ref Shell, Caltex. Right now you have large warehousing corps swarming out into the market with the credo of delivering the best pricing with the highest convenience – i.e Office max. This also increases cheap imports, closes local manufacturing and costs jobs that pay a reasonable wage.

    • Pat 16.1

      “Multinationals will leave if the profit is not high enough – ref Shell, Caltex.”

      which proves that a lax corporate tax regime is not the driving factor in whether an international corporation chooses to do business here (or anywhere).

  17. whateva next? 17

    like vultures picking over a carcass, would be great to have a healthy sustainable society/economy and say to them, “fly on, nothing to see here”

  18. Et Tu Brute 18

    “He is a former botanist who comments occasionally on economic issues. I think he should stick to botany.”

    And are you an economist? This is a fairly low blow.

    “He insults the intelligence of ordinary kiwis by stating that they do not know how much tax they are paying. Funny that. Pretty well everyone I know is well aware of their gross pay.”

    He hereby proves his point. The tax you pay is not just in PAYE. When you go shopping you pay GST. The goods you purchase also have a mark up from the retailer, a third of which is taxed. So if the retailer is aiming for a 10% return on equity, they have to structure their business to achieve this after tax. If you drive a car, you pay a petrol tax. If you smoke you pay a cigarette tax. If you’re buying imported goods you may even be paying for a customs/import tax. So for every $1 you earn, it isn’t 17.5% (or whatever), you’re paying double or triple that at least.

    • Draco T Bastard 18.1

      Yes, why is it that the poor pay for everything including for the rich to be rich?

    • Foreign waka 18.2

      Not to mention the tax on the tax like rates etc.

    • Henry Filth 19.1

      I thought it would come to this – the knee-jerk reaction throwing the baby out with the bathwater.

      Sigh.

      Why are New Zealanders so seemingly incapable of devising good administrative systems?

  19. Richardrawshark 20

    Rodney did more for our cause in one Herald post than Andrew Little has done all year. Think about it.

  20. Richardrawshark 21

    Wonders if he could convince Andrew that now was the right time to follow some of Trumps idea’s that worked, and come out against the state of parliament, the dysfunction, the jobs going oversea’s with promises to stop it penalise companies that outsource work and create jobs, jobs, jobs.

    If he had his ear to the people he would see this underlying sentiment applies in all western countries, grab it and run with it like trump did.

    It ties in with the undercurrent of Rodneys comment and how it’s repulsive to people that tax is evaded by the rich, our jobs have gone offshore and multinationals are cornering markets driving out competition and increasing prices for their books in a vicious cycle.

    • Jenny Kirk 21.1

      Andrew Little has beaten Trump to it, Richardrawshark.

      RNZ News 8 Nov 2015 reports Little saying “Labour would amend the Government Procurement Rules to make job creation and the overall benefit to New Zealand a determining factor in agencies’ decisions to award contracts.
      “The government currently spent $40 billion a year purchasing goods and services, Mr Little said…… but “They buy cheaper options, often from overseas, regardless of the impact on New Zealand, even if it means Kiwis will lose work.”

      And nor does Little need any advice from Rodney Hide – he’s already onto it.

      • Foreign waka 21.1.1

        Yep, and the race to the bottom has already begun. The worst part is that i.e. Hospitals save 2c per toilet roll that will not be a savings that goes back to the Hospital in question, no – it will be part of the overall savings the Minister of Health (or Sickness?) will put to the bottom line of the portfolio.

  21. Henry Filth 22

    “Imagine how much investment there would be if their returns were taxed entirely away. Who would be the losers? The multinationals? Or Kiwis?”

    So who does Mister Hide think is going to tax their returns entirely away?

    Sorry Rodney. That is such a disconnect from reality that it devalues anything else you have to say.

  22. Ch-ch Chiquita 23

    So, mister Hide is saying that a company will turn down a 90% profit because it can’t have 100% profit any longer? Did this joker ever run a business?

  23. newsense 24

    If we introduce a Rodney Hide tax, will he leave and take Jamie Whyte with him?

    • Paul 24.1

      Yes, if we promise to tax the rich, will they promise to leave?
      We cannot afford the rich.

  24. seeker 25

    “If we tax the multinational corporations will they leave?”

    Yes please if they have faces like the two at the top of this post.

    Unfortunately they ruin the natural beauty of our wonderful country.

  25. Scottie 26

    does anyone have accurate figures on how much tax all our foreign owned banks pay? They sure take a lot of our money but what tax do they contribute?

  26. Gareth 27

    I’m a little late to this conversation, but can anyone explain to me why we don’t just make companies pay tax on income like individuals do, instead of profits?

    If Apple NZ can’t manage their expenses, that’s their problem. Let’s not make it ours.

    • Pat 27.1

      problem is Apple (and their like) “manage their expenses(?)” very well…..so well they only make a profit in one tax location….the one with the lowest corporate rate.

      • Gareth 27.1.1

        Exactly. Whereas if they got taxed on NZ income they can’t shift it offshore. They earned the money here.

        • Pat 27.1.1.1

          the problem is determining what income (profit)is derived here…..due to their accounting practice

          • McFlock 27.1.1.1.1

            They can manage their net income, but if someone pays $1100 for the next iWhatsit that’s gross income. Like what I pay my income tax on.

            • Pat 27.1.1.1.1.1

              tax is paid on profit….gross income less expenses

              • Colonial Viper

                And about $150 of that number is GST.

                And the retailer needs a cut.

              • Draco T Bastard

                Can I get that on my PAYE?

                Because if I can’t then i don’t see why corporations should get the privilege. We should have a ‘level playing field’ after all.

                • Pat

                  didn’t you know…tax avoidance isn’t for mere wage and salary earners…unless you want to set up a trust of course, or the odd investment property or two…..hell, if we let everyone do it there’d be nothing to pay for all that corporate welfare.

              • Gareth

                So why not change the laws to make tax payable on gross income?

                Wouldn’t that clear up a lot of this issue?

                • Pat

                  it still doesn’t solve the problem of determining where the income was earned…. we still rely on their interpretation.
                  Perhaps some form of transaction tax may be workable.

                  • McFlock

                    if it’s gross, it doesn’t matter where it’s earned.

                    If their NZ account gets money, they pay tax on that. If they earned money overseas and paid tax on it there, good for them. If they want to bring it over here, they get taxed here.

                    I suppose that one could have a system of tax credits from other nations, but then the financial benefit is on proving the provenance of that cash and the validity of the credits, not hiding it in a trust that you pretend you have nothing to do with.

  27. I am just going to shake my head. If a pasture is green enough, the MNCs will come. Hell they will fight tooth and nail to contribute to the area just to have access to the market. They will pump in the finance and take out the loans and support your local area if you know how to market them right. It’s not just about the taxes although they do play a part. The trick is knowing just how to post the taxes to them in a fair and unbiased way.

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