Dear Sir I suggest a simple solution to the problem of corporate tax avoidance. Apply a Limited Liability Levy on the gross revenues of all legal entities- such as Joint Stock Limited Liability Companies - where investors benefit from the privilege of "free" limited liability. Then abolish Corporation Tax; taxes on the related investment income of individuals; possibly even VAT; and collect the Levy through the payment clearing system. The fact that this would lead to widespread unemployment among accounting, tax and legal specialists is, I guess, part of the price we would have to pay for a fairer system, but I am sure they would be prepared to make the sacrifice for the greater good. Yours etc
I suggest a simple solution to the problem of corporate tax avoidance.
Apply a Limited Liability Levy on the gross revenues of all legal entities- such as Joint Stock Limited Liability Companies - where investors benefit from the privilege of "free" limited liability.
Then abolish Corporation Tax; taxes on the related investment income of individuals; possibly even VAT; and collect the Levy through the payment clearing system. The fact that this would lead to widespread unemployment among accounting, tax and legal specialists is, I guess, part of the price we would have to pay for a fairer system, but I am sure they would be prepared to make the sacrifice for the greater good.
Yours etc
While on the first go, I thought that taxing gross revenue would be a good idea, now I think a more nuanced approach would be better.
Allow corporations to self report net revenue below a certain gross revenue threshold. For example, let's 1 million pounds annually. So below this gross revenue threshold, corporations would be able to send in their own documents showing gross revenue minus operating costs yielding net income. And this net income would be taxed.
But above this threshold, submissions by corporations would be required to be audited annually by a government employed accountant, and the cost of this process would be billed to the corporation.
I think that this would fly in common law systems like England and the US. And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
