Uber: HMRC and the Public Accounts Committee

Jolyon Maugham on Waiting for Godot:

In October, I wrote this post. It made five points.

(1) I explained why I believed Uber was supplying transportation services.

(2) I set out what that meant in tax terms – Uber was liable to pay, but was failing to pay, hundreds of millions of pounds in VAT every year.

(3) I explained that HMRC’s ability to collect that unpaid VAT was time-limited – as time passed, HMRC lost the ability to collect those hundreds of millions of pounds for the rest of us.

(4) I argued that HMRC should raise assessments to protect its position in case the various cases before the courts confirmed Uber was supplying transportation services.

(5) And I said that HMRC’s failure to do so was remarkable – it indicated serious wrongdoing at HMRC.

Points (1) and (4) were, shortly thereafter, put to HMRC by the Public Accounts Committee (see, from Question 88, here). But what did HMRC say by way of response? And does that response hold water?

Spoiler alert: you can guess the answers but the detail is worth reading, especially the closing paragraphs:

Since that oral evidence was given, Uber has lost its appeal against the Employment Tribunal decision. And yesterday it lost the case in the Court of Justice of the European Union that Jim Harra referred to. Both the Employment Appeal Tribunal and the CJEU held that Uber was supplying transportation services.

We must hope that HMRC now takes the steps it has indicated it will to ensure Uber is subject to the same tax law as the rest of us. In the meantime I will continue to pursue my action against Uber and my actions against HMRC (see here and here) to establish Uber’s liability to pay Value Added Tax.

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How Citizens United Changed Politics and Shaped the Tax Bill

Brennan Center for Justice:

On the officeholder side, to take but one example, Rep. Chris Collins (R-NY) told the Hill newspaper, “My donors are basically saying, ‘Get it done or don’t ever call me again.’” And Steven Law, president of the Senate Leadership Fund and former chief of staff to Majority Leader Sen. Mitch McConnell noted “[Donors] would be mortified if we didn’t live up to what we’ve committed to on tax reform.”

Perhaps even more striking is the brazenness with which donors themselves are admitting they have threatened members of Congress. Conservative donor Doug Deason of Texas explicitly said the “Dallas piggy bank” was closed until tax and health bills were passed. “Get Obamacare repealed and replaced, get tax reform passed…You control the Senate. You control the House. You have the presidency. There’s no reason you can’t get this done. Get it done and we’ll open it back up,” Deason told Republican leaders.

Deason refused to host fundraisers for Rep. Mark Meadows (R-NC) and Rep. Jim Jordan (R-OH). “I said, ‘No I’m not going to because we’re closing the checkbook until you get some things done.’”

One outside spending group showed members of Congress potential ads they might run in their districts depending on how tax reform proceeds on Capitol Hill. One unidentified House Republican told HuffPost: “Like a teacher showing the kids a paddle on the first day of class, the blatant implication was that those who misbehaved would be spanked.”

So what’s going on? We have a theory, and it relates to that most famous of Supreme Court campaign finance cases, Citizens United, decided in 2010. When people talk about Citizens United – which allowed unlimited “independent” spending in elections and indirectly led to now infamous super PACs  they often talk about how it has opened the floodgates to massive amounts of money in our politics. This is a misconception. In fact, while the amount of money spent in federal elections since Citizens United has increased, the increase has not been particularly dramatic.

What has been dramatic is the change in who funds elections. Increasingly our elections are financed by just a handful of donors who make multimillion dollar contributions to support candidates for federal office. In 2010, the top 100 individual donors contributed just of $73 million to federal candidates, parties, and other committees, including super PACs. In 2012, that number increased to $380 million, and by 2016, it reached over $900 million.

All of this means that a few donors matter much more than they used to, and those donors can make threats that genuinely terrify members of Congress. Whereas before Citizens United donors of $100,000 or more could make up as little as 5 percent of all individual contributions in federal elections, after Citizens United they could represent as much as one in four dollars. That’s power!

 

Bregrets? Why Britain has had few over Europe

Financial Times:

 

The most likely reason for the steadfast opinions, however, is that the referendum scrambled political identities. Ipsos Mori’s fascinating “Shifting Ground” survey shows how the UK’s political tribes have been reconfigured. Before the referendum, supporters of the Labour party sat on the left side of the economic axis, favouring tax and spend policies. The Conservatives were towards the right, advocating free market economics. On social issues, the Tory tribe flirted with authoritarianism while Labour voters floated towards liberalism. Crucially, there was substantial crossover on all these issues — in the political centre ground.

But Brexit has laid waste to that. The survey shows that the crossover between Leavers and Remainers is much smaller, and that these tribes are more starkly divided on social issues such as the death penalty and the pace of cultural change. Brexit has become a form of identity politics. And healing the divide is going to be difficult.

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Don’t blame the election on fake news. Blame it on the media.

Columbia Journalism Review:

What did all these stories talk about? The research team investigated this question, counting sentences that appeared in mainstream media sources and classifying each as detailing one of several Clinton- or Trump-related issues. In particular, they classified each sentence as describing either a scandal (e.g., Clinton’s emails, Trump’s taxes) or a policy issue (Clinton and jobs, Trump and immigration). They found roughly four times as many Clinton-related sentences that described scandals as opposed to policies, whereas Trump-related sentences were one-and-a-half times as likely to be about policy as scandal. Given the sheer number of scandals in which Trump was implicated—sexual assault; the Trump Foundation; Trump University; redlining in his real-estate developments; insulting a Gold Star family; numerous instances of racist, misogynist, and otherwise offensive speech—it is striking that the media devoted more attention to his policies than to his personal failings. Even more striking, the various Clinton-related email scandals—her use of a private email server while secretary of state, as well as the DNC and John Podesta hacks—accounted for more sentences than all of Trump’s scandals combined (65,000 vs. 40,000) and more than twice as many as were devoted to all of her policy positions.

To reiterate, these 65,000 sentences were written not by Russian hackers, but overwhelmingly by professional journalists employed at mainstream news organizations, such as The New York Times, The Washington Post, and The Wall Street Journal. To the extent that voters mistrusted Hillary Clinton, or considered her conduct as secretary of state to have been negligent or even potentially criminal, or were generally unaware of what her policies contained or how they may have differed from Donald Trump’s, these numbers suggest their views were influenced more by mainstream news sources than by fake news.

Consistent with other studies of media coverage of the election, our analysis finds that The New York Times focused much more on “dramatic” issues like the horserace or personal scandals than on substantive policy issues. Moreover, when the paper did write about policy issues, it failed to mention important details, in some cases giving readers a misleading impression of the true state of affairs. If voters had wanted to educate themselves on issues such as healthcare, immigration, taxes, and economic policy—or how these issues would likely be affected by the election of either candidate as president—they would not have learned much from reading the Times. What they would have learned was that both candidates were plagued by scandal: Hillary Clinton over her use of a private email server for government business while secretary of state, as well as allegations of possible conflicts of interest in the Clinton Foundation; and Trump over his failure to release his tax returns; his past business dealings; Trump University; the Trump Foundation; accusations of sexual harassment and assault; and numerous misogynistic, racist, and otherwise offensive remarks. What they would also have learned about was the ever-fluctuating state of the horse race: who was up and who was down; who might turn out and who might not; and who was happy or unhappy with whom about what.

To be clear, we do not believe the the Times’s coverage was worse than other mainstream news organizations, so much as it was typical of a broader failure of mainstream journalism to inform audiences of the very real and consequential issues at stake. In retrospect, it seems clear that the press in general made the mistake of assuming a Clinton victory was inevitable, and were setting themselves as credible critics of the next administration. Possibly this mistake arose from the failure of journalists to get out of their “hermetic bubble.” Possibly it was their misinterpretation of available polling data, which showed all along that a Trump victory, albeit unlikely, was far from inconceivable. These were understandable mistakes, but they were still mistakes. Yet, rather than acknowledging the possible impact their collective failure of imagination could have had on the election outcome, the mainstream news community has instead focused its critical attention everywhere but on themselves: fake news, Russian hackers, technology companies, algorithmic ranking, the alt-right, even on the American public.

If we treat plutocracy as democracy, democracy dies

Simon Wren-Lewis on mainly macro:

Trump and Brexit are the creations of a kind of plutocracy. Politics in the US has had strong plutocratic elements for some time, because of the way that money can sway elections. That gave finance a powerful influence in the Democratic party, and made the Republicans obsessive about cutting higher tax rates. In the UK plutocracy has been almost non-existent by comparison, and operated mainly through party funding and seats in the House of Lords, although we are still finding out where the money behind the Brexit campaign came from.
By focusing on what some call the demand side of populism rather than the supply side, we fail to see both Trump and Brexit as primarily expressions of plutocratic power. Trump’s administration is plutocracy personified, and as Paul Pierson argues, its substantive agenda constitutes a full-throated endorsement of the GOP economic elite’s long-standing agenda. The Brexiteers want to turn the UK into Singapore, a kind of neoliberalism that stresses markets should be free from government interference, rather than free to work for everyone, and that trade should be free from regulations, rather than regulations being harmonised so that business is free to trade.
It is also a mistake to see this plutocracy as designed to support capital. This should again be obvious from Brexit and Trump. It is in capital’s interest to have borders open to goods and people rather than creating barriers and erecting walls. What a plutocracy will do is ensure that high inequality, in terms of the 1% or 0.1% etc, is maintained or even increased. Indeed many plutocrats amassed their wealth byextracting large sums from the firms for which they worked, wealth that might otherwise have gone to investors in the form of dividends. In this sense they are parasitic to capital. And this plutocracy will also ensure that social mobility is kept low so the membership of the plutocracy is sustained: social mobility goes with equality, as Pickett and Wilkinson show.
It is also a mistake to see what is happening as somehow the result of some kind of invisible committee of the 1% (or 0.1% and so on). The interests of the Koch brothers are not necessarily the interests of Trump (it is no accident the former want to help buy Time magazine). The interests of Arron Banks are not those of Lloyd Blankfein. Instead we are finding individual media moguls forming partnerships with particular politicians to press not only their business interests, but their individual political views as well. And in this partnership it is often clear who is dependent on whom. After all, media competition is slim while there are plenty of politicians.
What has this got to do with neoliberalism? which is supposed to be the dominant culture of the political right. As I argued here, it is a mistake to see neoliberalism as some kind of unified ideology. It may have a common core in terms of the primacy of the market, but how that is interpreted is not uniform. Are neoliberals in favour of free trade, or against? It appears that they can be both. Instead neoliberalism is a set of ideas based around a common belief in the market that different groups have used and interpreted to their advantage, while at the same time also being influenced by the ideology. Both interests and ideas matter. While some neoliberals see competition as the most valuable feature of capitalism, others will seek to stifle competition to preserve monopoly power. Brexiters and their press backers are neoliberals, just as the Cameron government they brought down were neoliberals.

 

The Daily Mail’s enemies

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The Daily Mail says Trump’s absurd but he’s not the enemy.  Let’s remind ourselves who the Daily Mail thinks is the enemy.  Ah, yes.  An independent judiciary.  Very Trump.

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James Slack wrote the article.  He’s now Theresa May’s official spokesperson.

Hague and Cameron couldn’t detoxify the Tories – May has no chance

The Guardian:

For Theresa May, rebranding to a green and caring image is even less likely to work. First, she has effectively presided over a retox of her party: she has promoted Dominic Raab and welcomed back Liam Fox and David Davis, all of whom have strongly objected to the Tory modernisation project, claiming it takes the party away from its grass roots. Her party’s flagship purpose – Brexit – has anti-modernisation at its very core. Attempting a facelift, at this point, will be painful and difficult.

Second, she is in a far trickier position than Cameron ever was. Cameron recognised his party could not be seen as both “nice” and “effective”, but had to dance between the two. The party could be nice in the good times, as long as it dropped all that to be effective in the bad. It could be nice to attract young voters, as long as it could switch back to being effective when the older and working-class vote fell. May has no such wriggle room.

She cannot afford to lose the support of those on low incomes, and she cannot afford to be seen wasting money at a time when the economy is in peril – her party must project an air of flinty reliability. But neither can she afford to see the Tories abandoned by the young, who are overwhelmingly turning to Labour – her party must be seen to care, too. The task is almost impossible. May, dogged politician though she is, may not be the person to do it.

Relatedly:

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Eton teachers help set seven exams taken by their pupils, says headmaster

The Guardian:

Eton teachers are involved in setting seven public exams taken by their own pupils, the school’s headmaster admitted at an inquiry into exam integrity on Tuesday.

Simon Henderson told parliament’s education select committee that eight of his staff set 10 exams in total, of which seven were for papers being sat by the school’s pupils. But he said he wanted to avoid a repeat of the scandal that led to a teacher’s departure from the school earlier this year, after it was first revealed in the Guardian that pupils had had access to material that later appeared in their final exams.

And amid ongoing concern that exams are vulnerable to manipulation by unscrupulous examiners, England’s exam watchdog also told the committee that it was considering plans to crack down on classroom teachers who set public exams in the subjects they teach.

Who could have seen that?  Oh yes, from 2014: The next shoe to drop will be realisation of the scope for abuse by allowing fee-paying schools to administer their own exams.