So Labour will now tell us when we can sell our Assets?

So today Ed Miliband announced that Labour reject the guarantees from Pfizer ahead of the AstraZeneca takeover.

Am I the only person wondering what it has to do with Ed Miliband? Surely the situation is that there are many shareholders who own shares in AstraZeneca and as such if they hold them or sell them, is up to them?

If I want to sell my car it is between me and the buyer. I wouldn't be happy with the government stepping in to prevent me from selling. No idea why Labour think it is their place to tell me how to manage my assets.

But I am not surprised, after all they have already said I am not smart enough to manage my pension and that they should control what Bank I use and what Energy Company I am supplied by.

Labour rejects Pfizer bid guarantees http://www.bbc.co.uk/news/business-27403777

Why do they think the cure for bad legislation is more legislation?

Listening to a conversation in the Gym this morning between two guys who were discussing the changes to planning to enable councils to limit the amount of Bookmakers in an effort to control the spread of Fixed Odds Betting Machines and it got me thinking about the government and particularly why the government always tries to legislate its way out of trouble, even when the trouble is caused by Bad Legislation.

This is a classic example. basically the government were worried about FOB terminals and so they legislated that shops couldn't have more than 4 terminals, the problem with this kind of "blanket" legislation is that it doesn't consider any specific circumstances, so a shop where the demand can only support 1 terminal is viewed no differently than a shop where demand can support 20. Now as Supply will always follow demand the obvious (To all but the government) result is that the area that wants 20 terminals will get 5 shops.

Now that the inevitable has happened the complaint is that there are too many betting shops and so councils should have power to refuse them, basically trying to legislate out of a problem that the original legislation caused. It does actually appear to me that all of this legislation is caused by one simple issue, They don't trust you enough to make decisions about your own life, but they are not willing to say that out loud.

So here is a crazy idea, why not allow demand to regulate supply, remove all the legislation and that way each area will only have the FOBTs that the people using them want, and there will only be as many bookmakers as the economy can support. (Although you should think about if you really want to reduce the amount of bookmakers on the high street, these are after all people's jobs and tax paying businesses.)

Greedy Corporations or Out of Control Government?

After my recent discussion about fuel duty I was thinking about how we are often told how “Greedy Corporations” remove money from the economy and are responsible for high wages I thought I would look at it through a practical example. Working for an Oil company I thought I would look at how much of £100 paid to me by my employer that was then returned to them by purchasing their petrol. Out of this £100 how much would end up as company profit and how much would end up with the Government.

The first government slice (actually three slices) come before I have even received the money.

Tax Type	Tax Rate	Payable on	Tax	Remaining
Employer National Insurance	0.138	£100	£14	£86
Income Tax	0.4	£100	£40	£46
Employee National Insurance	0.12	£100	£12	£34

So before even receiving the money the £100 is reduced down to £34 (Which is enough to provide me with 28.33 Litres of Unleaded. This gives the Government their next two slices.

Fuel Duty	£0.58	28.3l	£16.40	£17.60
VAT	0.2	£34	£6.80	£10.80

So with over half of the money being taken in direct taxation again we have the actual money that is spent on the product cost, obviously as there have been taxes all along the process part of this cost is made up of the taxes incurred on the product pipeline, unfortunately there are no direct figures available but based on the figures of produced by PWC and available here I have worked out that the supply taxation costs is about 18p per litre. (this includes - Petroleum Reserve Tax, Employee Taxes, Supply Chain Tax, property Tax and Environmental Taxes)

Supply Line Taxation

£0.18

28.3l

£5.09

£5.71

So from the £100 my company wanted to pay me the government have already taken 94% so there is nothing else for them to do but to tax what little they have so far failed to take through corporation tax – including the supplemental levy payable by Oil and Gas companies.

Corporation Tax

0.3

£5.71

£1.71

£3.99

 This gives the Government 96% of the money and the “Greedy Corporation” 4%

And as if the government removing 96% of the money from the economy already if this profit is paid back to shareholders they will take up to an additional 37.5% and should that Shareholder go on to spend the money they will take another healthy 20% in VAT!

 

What is the Tax rate on a Litre of Fuel?

In a recent conversation I was talking to a friend about the levels of taxation on a litre of fuel (I am just that much fun) We realised that although we both knew that we were taxed too much neither of us knew what the actual rate of tax was so I decided to look into it.

The tax on fuel that is often quoted is about 65% and is calculated as

Cost of a Litre of Fuel = £1.29 Tax on fuel £0.84 (£0.58 Fuel Duty and £0.26 VAT) this gives us 0.84/1.29 = 65%

Now this is a pretty high percentage to pay in tax especially in times that people are struggling to get into work. However this is the percentage of what you pay that is tax, rather than the tax rate on the product itself. To find this we need to find the net product cost which in the simplest form you can calculate as 

Cost – Tax to get the net product cost so in this case it is £1.29 - £0.84 = £0.45 so this is the net product cost and produces an actual tax rate of 0.84/0.45 = 187%

And this isn't even taking into account the percentage of the net product cost that is actually made up through taxation (Tax on Staff Costs, Business Rates, Production Taxes etc...) I may look at trying to add these on but unfortunately the information isn't easy to find out as I think if we ever found out the true cost of taxation on our lives the whole house of cards may just come down.