They are responsible and it is indeed lame. To think, the one thing I gave the government credit for was marketing snappy slogans.

Our populists are doing the same kind of primary school level slogans, it's insulting and this would have never happen 20 years ago, it makes me feel our civilization is absolutely regressing.

https://www.independent.co.uk/news/business/news/scotland-tax-have-ban-coronavirus-bailout-fund-a9526006.html?utm_source=reddit.com

Bravo Scotland, the rest of the world should follow suit.

The purpose of bailouts is to safeguard jobs of ordinary workers and keep key industries functioning. Whether they've avoided tax is irrelevant when assessing how much we need their goods and services to survive, or how many jobs of law-abiding taxpaying tommy's will be lost. I see it as a irrational policy centered on emotion (primarily vengeance), and not based on any tangible benefits.

during the current epidemic sure, but given that we may very well be in an era where "covid season" returns twice a year and these type of bailouts could continue this may drive companies to change their tax policies in the long run. emotional yes, but i think moral too.

Tax is avoided primarily through transfer pricing, which involves charging a premium to sister companies/subsidiaries/JV's in other countries with higher corporate tax rates. If I charged a sub in a country with a 20% corporate tax rate a transfer pricing markup of 25% on every related party transaction, and my company was based in a country with an 18% tax rate, I would be avoiding tax. Transfer pricing is not only legal but is essential in giving a true and fair view of unconsolidated financial statements, it's extremely difficult for authorities to track, and it involves a great deal of subjectivity. From my own first-hand experience I believe that tax avoidance is better dealt with by non-invasive methods that will incentivise firms, like publishing a list of offenders that risks reputational damage, and not by punitive legislature.

This post was edited by dro94 on May 21 2020 02:27pm

wont this do both tho? why cant Scotland also call out who they're not sending bailout too?

perhaps we just have a very different concept of tax avoidance, because i was thinking more in line with companies like Royal Caribbean who are "based" in extremely low tax rate countries like the Bahamas or Jamaica, but do business almost exclusively at US ports with US citizens being their consumers. stopping off at the home base for a fuel up then carrying on exploiting US taxes.

To my knowledge Holyrood haven't released any list of the companies they won't give bailouts to.

Royal Caribbean are based in Miami. They've probably got a sub in the Bahamas that provide some shipping service to Royal Caribbean. Tax avoiding multinationals rarely base their HQ in poor tax havens, they'll do what I explained in my previous post.

Scotland will be punishing small time tax-avoiding companies, many of which are web based and don't turnover £1bn+, while letting sophisticated multinationals 'based' in the US/UK off the hook.

That's a good point, but society cant bail out all those transnational corporations (again!) without doing something against their tax evasion schemes afterward.

The way I see it, government bailouts of big corporations should only take place under three conditions:

1.: the government receives shares of at least 25% + 1 stock from the bailed out company
2.: no dividend payout or manager bonuses while the government is invested
3.: after the crisis is over, the tax evasion stuff is phased out

It's not tax evasion, it's tax avoidance. There is a key difference - legality.

It's not a bailout scheme to stop firms from going under, either. The context of this is grants, employee retention scheme, VAT deferrals, Corp tax deferrals, and so on. So government ownership doesn't come into play here.