bookmark_borderSimplifying taxation through personal companies

Berkshire Hathaway Shareholders Meeting
Berkshire Hathaway Shareholders Meeting, a photo by timbu on Flickr.
Companies have lots of advantages compared to real people. Amongst other things, they generally only pay taxes on their profits, not on their income (revenue), and lots of companies are registered for VAT, which means they don’t pay any VAT on what they buy.

Companies have these advantages to encourage investment and promote growth.

However, one might argue that this should apply to individuals, too.

Imagine if every individual automatically owned a “personal” company (i.e., at birth I would have been made sole director of Thomas Widmann Ltd.), and all their work took place through their company (it would be illegal for companies to employ people rather than other companies). In this scenario, everybody would need to decide when to take profits out of their personal company instead of investing the money (which would be tax-free).

With the move away from direct employment towards self-employment, this is increasingly becoming a reality for a large number of people, so perhaps it would be worthwhile making this approach universal.

After this change, it would be possible to completely abolish income tax, because employment would then always an issue between two companies, and all that would be needed would be company taxation and taxes on withdrawing profits. I guess many people would let their personal companies own their house and their car and let their personal company provide free meals to its employee in order to minimise tax and VAT, but that would be a good thing as it would just be levelling out the playing field (which is currently distorted in favour of companies and rich people).

At the moment, most rich people have companies (or charities) to lower their tax bill, so giving everybody a VAT-registered company would basically just give normal people the benefits that the rich currently enjoy.

bookmark_borderWhy Brown sold the gold so cheaply

gold cast bar
gold cast bar, a photo by hto2008 on Flickr.
I must have overlooked this very interesting blog post by The Telegraph’s Thomas Pascoe (probably because the Scottish holidays had already started at the time).

He’s arguing that Gordon Brown wasn’t an innumerate idiot when he sold most of the UK’s gold reserves at a ridiculously low price, as most people had assumed.

What he really did was trying to salvage the banking system:

It seemed almost as if the Treasury was trying to achieve the lowest price possible for the public’s gold. It was.


Faced with the prospect of a global collapse in the banking system, the Chancellor took the decision to bail out the banks by dumping Britain’s gold, forcing the price down and allowing the banks to buy back gold at a profit, thus meeting their borrowing obligations.

If true, this puts the gold sale in a completely different light. It was perhaps after all the right thing to do at the time (although I wonder whether bailing out a few banks would actually have cost more than the value of all that gold today), but why didn’t Gordon Brown afterwards try to strengthen the banking system instead of letting them continue their merry games until the system finally crashed in 2007?

bookmark_borderJust say No to renegotiation

PM meets with Angela Merkel
PM meets with Angela Merkel, a photo by The Prime Minister’s Office on Flickr.
It’s completely clear that David Cameron’s plans to renegotiate the EU membership terms is just a plot to halt the progress of UKIP. He thought that promising a referendum in five years’ time would make UKIP’s voters come back to the Conservatives in time for the next general election.

However, it’s now increasingly clear that voters are drifting towards UKIP for many different reasons (immigration being one of the major ones), which means that the referendum promise now looks utterly futile.

However, many Tories (such as Lawson) are already stating clearly that they’ll vote No, no matter what, just as others (such as Heseltine) are planning to vote Yes even if Cameron doesn’t get a good deal.

UKIP will of course recommend a No in all circumstances:

What we will see is nothing more than the Wilson renegotiations in the Seventies that will be trumpeted and applauded by the establishment as a great victory for the Prime Minister and Britain, as these things always are. Nothing of any substance was achieved in the Seventies, nor will it be today.

In these circumstances, I really can’t see why the other EU countries should enter in serious negotiations with David Cameron’s government. There might be a few voters who will actually look at the deal before deciding on Yes or No, but my gut feeling is that it really won’t make much of a difference during the referendum campaign.

My advice would be to refuse to change one iota in the UK’s membership terms, or perhaps even ask the UK to join Schengen and some of the other EU policies that the UK has opted out of over the years. In other words, make this a fully in or fully out referendum, not a fifty or ninety percent out one.

I sincerely hope the upcoming EU referendum won’t affect Scotland in the slightest because we’ll already be an independent country and a full EU member by 2017.

bookmark_borderDividing England along the Severn-Wash line

Isoglosses for 'last', 'cross' and 'sun'
Isoglosses for ‘last’, ‘cross’ and ‘sun’. Based on this image by NordNordWest modified by User:Xhandler, with isoglosses from An Atlas of English Dialects

In the past I’ve been writing about ways to split up England for the purpose of making federalism work in the UK (see this and this and this).

For some bizarre reason one split I never suggested in these blog posts was in many ways the most obvious one.

As a linguist, I’ve been aware for years that English dialects split into two main groups: Southern English south of a line roughly from the Severn to the Wash, and Northern English north of this line. (Scottish dialects are a completely different story.) Three of the most important isoglosses are shown on the map on the right.

However, this line turns up in lots of other contexts, e.g.:

  • Economics: “The current government’s attempts to bridge the north-south divide look doomed to failure. All but one of the 20 worst districts for hidden unemployment lie north of a line from the Severn to the Wash […]”
  • Politics: “South of a line drawn from the Wash to the Severn estuary, Labour has just 10 seats outside of London.”
  • Geology: “The line links the mouth of the River Tees between Redcar and Hartlepool in the north east of England with the mouth of the River Exe in Devon, the south west. The lowlands (sedimentary rocks) are predominant to the east of the line and higher land (igneous and metamorphic rocks) dominates to the west. As well as geology, those areas to the north and west of the line are generally wetter in climate than those to the east and south. Similar lines are commonly drawn, for similar purposes, between the Severn Estuary and the Wash, and between the Severn and the mouth of the River Trent.”
  • Ornithology: “[The nightingale is] a secretive bird which likes nothing better than hiding in the middle of an impenetrable bush or thicket. In the UK they breed mostly south of the Severn-Wash line […]”
  • Medicine: “Although the 1916 and 1917 waves of meningitis in the civil population were less intense than the primary wave of 1915 […], the underlying pattern of heightened disease activity in counties to the south of the Severn-Wash line persisted.”

I’m sure there are many more examples, but these should suffice to show that the Severn-Wash line is the most obvious border. North England and South England would be different in so many ways that they would quickly develop separate identities.

Obviously I don’t think England will ever be divided, but the consequence is that an undivided England will always dominate the UK to such a great extent that Scottish independence becomes a necessity.

bookmark_borderAm bu chòir do dh’Alba a bhith na dùthaich neo-eisimeilich?

Should Scotland be an independent country?
Should Scotland be an independent country?
I’ve been wondering for a wee while how to express the official referendum question, “Should Scotland be an independent country?”, in Scottish Gaelic. A few enquiries on Twitter didn’t get me anywhere.

I had this idea that the way to express “should” would be through some obscure verb form, but when I finally looked it up in my copy of “Scottish Gaelic in Three Months” today, I learnt that it’s expressed as bu chòir do “it’s proper for”.

With that information in hand, it didn’t take me long to find a BBC blog page which gives the question as Am bu chòir do dh’Alba a bhith na dùthaich neo-eisimeilich?

Although I have no way to verify it, this looks correct to me. The structure is as follows:

Am bu chòir do dh’ Alba a bhith na dùthaich neo-eisimeilich
Q is proper for Scotland to be country independent

(I’m not entirely sure about the na. I believe it means “in her” here — “in his” would lenite the following word, and the genitive form of the definitely article would require the genitive form of dùthaich — and I suspect it’s here to bind together the infinitive with the rest, but I must admit I don’t remember the details.)

If the government provided ballot papers in Gaelic, too, they would presumably then look as follows:

Am bu chòir do dh’Alba a bhith na dùthaich neo-eisimeilich?

  • Bu chòir
  • Cha bu chòir

I wonder whether it would change the number of Yes and No votes if the question in English had been “Is it proper for Scotland to be an independent country?” too…

bookmark_borderCameron’s referendum folly

I really don’t understand what Cameron is trying to achieve by trying to renegotiate the EU membership terms and then holding a referendum with only two options: the new terms or leaving the EU altogether (without any option to opt for full EU membership instead).

I could understand if he was threatening his EU colleagues that he’d hold a referendum if they didn’t allow a renegotiation, but what is the incentive for other EU leaders to waste time and money renegotiating the membership terms when it’s quite likely the UK will go for a Norwegian solution anyway?

If I was Merkel or Hollande, I’d say no to renegotiation (or at the most give Cameron the tiniest opt-out possible), and tell the UK put up or pull out. Giving in to Cameron would just create a precedent for other countries that you can get your way by threatening to leave, and they’d probably benefit from companies relocating to the continent to stay within the EU.

Furthermore, there is a decent chance that the UK after a decade in the Norwegian Limbo would ask to become a member again, at which time the EU could decide to allow the UK back in only if they signed up to the full package without any opt-outs.

Apart from this, does Cameron really think the British economy really needs five years of uncertainty, during which time very few companies will create EU jobs in the UK? Obviously, it’s an important decision that would need to be discussed in detail, but this is pushing it.

From a Scottish point of view, I hope Cameron’s referendum will convince many undecided voters that it’s actually less risky to vote Yes to independence in 2014 than to vote No, simply because an independent Scotland will be more likely to be an EU member in 2020 than the UK.

It also brilliantly exposes the hypocrisy of many of the Better Together campaigners, who have been accusing the Scottish Government of doing exactly what they’re doing themselves now.

bookmark_borderRead Arc of Prosperity if you’re interested in Scottish independence

When I created my independence blog, Arc of Prosperity, I decided I would at first publish relevant posts on both blogs.

However, it’s not ideal that there isn’t a primary location for each post. For instance, it means comments on the same story aren’t always made in the same place.

I’ve therefore decided to put my blog postings about Scottish independence exclusively on Arc of Prosperity from now until the referendum.

I’ll post appetisers here, but you’ll be required to follow a link to read the full story.