Liz Truss

[Alan Harper's Tash]

Don't understand the bankers bonuses and not taxing the big energy companies. Does she really think they just invest all these excess profits into our economy? Rather than pay it out in dividends to shareholders and pension funds worldwide. Also cutting stamp duty will just pour petrol on the rise in housing costs. Aside from not raising corporation tax for S and M busineses which is a good thing. She appears to have very limited understanding of how our economy works.

It’s about time someone thought of the sadomasochists. ;-)

 

[Brewster's millions]

Here's a damning statistic from the economist Ha Joon Chang: '...distributed profits as a share of total US corporate profits stood at 35-45 per cent between the 1950's and 1970's. Between 2001 and 2010, the largest US companies distributed 94% of their profits [to shareholders] and the top UK companies 89% of their profits.'

And here's another: '...in the UK, the average period of shareholding, which had already fallen from 5 years in the mid 1960's to two years in the 1980's, plummeted to about 7.5 months at the end of 2007.'

What this effectively means is that - as a consequence of the neoliberal philosophy favoured by Thick Lizzy - companies have been put under increasing pressure to deliver high short-term profits, otherwise investors will flit somewhere else, as evidenced by the second statistic.

The easiest way for the CEO (Chief Executive Officer) of a company to enable short-term profits to be made is simply to cut costs, something that can be achieved by reducing the workforce through redundancies, freezing salaries, lowering overheads (like paying for employee pensions, cutting investment in Research & Development, and selling off less profitable arms of the business), what is more or less a ‘slash and burn’ approach.

This leaves very few resources with which a company can invest in things like new machines, the aforementioned R&D, and staff training, so they end up getting run into the ground. And by the time the company gets into trouble, the CEOs who enacted this policy will often have moved on.

She is a complete and utter fucking waste of space.

Have always thought that it is wrong to utterly demonize an 'out-group', as we all know where that leads.

But these days I am having a very hard time perceiving Tory politicians and their supporters as anything other than vermin.

I would think that the rise in distributed profits largely reflects the rise in debt financing across the corporate sector, versus using retained profit. You can debate the merits of this, but for long periods the cost of debt was cheaper than equity, and having a balance of external and internal finance is probably correct. So I’m not sure the figures quoted by that economist really support that particular argument regarding a lack of investment.

The decline in the term of shareholding is stark though.

 

[Mr Kobayashi]

It’s about time someone thought of the sadomasochists. ;-)

 

[Brewster's millions]

It’s about time someone thought of the sadomasochists. ;-)

That’s a fair point, but I’m not sure we should get tied up in this particular argument.

 

[Alan Harper's Tash]

That’s a fair point, but I’m not sure we should get tied up in this particular argument.

This isn’t just any S&M business, this is an M&S S&M business.

 

[KS55]

Don't understand the bankers bonuses and not taxing the big energy companies. Does she really think they just invest all these excess profits into our economy? Rather than pay it out in dividends to shareholders and pension funds worldwide. Also cutting stamp duty will just pour petrol on the rise in housing costs. Aside from not raising corporation tax for S and M busineses which is a good thing. She appears to have very limited understanding of how our economy works.

Some misunderstanding here.
North sea oil extractors already pay:
A licence fee upfront
A special higher rate of corporation tax
A windfall tax.
Truss has declined to add to this as the big cos have been reluctant in recent years to open up new fields.
Similarly, cos like Shell and BP are multi National, multi sector businesses. Only about 15% of their profits attach to British based operations. A new windfall tax may not, therefore, be effective.
The big profits are garnered by the uk distribution networks such as the National grid and are largely owned by French and German cos.
Energy retailers operate on gross 5% margin. (EBIT)

 

[wolviedinho]

 

[KS55]

I can't get my head around that either. They've probably spoken to a couple of businesses who have said they would invest whilst sniggering. The only way to get companies to invest more than they've already committed, in this economic climate, is to incentivise it and the best way is to usually raise taxes so they try to avoid them. That money as you say is lining the pockets of a few otherwise. She's playing a long term game to try and make the UK an attractive place for big businesses and somewhere the big dogs can get mega rich. But we need instant results to address the economic crisis and she'd be far better off introducing a short term windfall tax and raising taxes for the filthy rich with a commitment to reducing them in the future. Instead it's offering short term help to those that need it most, and even then a token gesture, whilst the rich get even richer.

Crickey! You don’t avoid taxes by investing. (Note, if I make 500 profit and invest 300, my tax is assessed on 500, not 200.) You encourage investment with capital allowances, not tax. The current quid pro quo for investing is depreciation allowances against corp tax.

 

[KS55]

@Brewster's millions said he was having a hard time not equating Tories with vermin.
He needs to grow up and produce some political arguments. Calling people you disagree with vermin, scum etc is childish. God knows there is enough to castigate Tories for anyway. Try writing about their competence.

 

[Mr Kobayashi]

@Brewster's millions said he was having a hard time not equating Tories with vermin.
He needs to grow up and produce some political arguments. Calling people you disagree with vermin, scum etc is childish. God knows there is enough to castigate Tories for anyway. Try writing about their competence.

It wasn't him it was @ZenHalfTimeCrock.

Go back to bed mate, you need some more sleep.