The English Experiment....

[lawrocket 3]

Took a look at this Supreme Court opinion released today in PPL v. Commissioner of the IRS. The opinion was written by Justice Clarence Thomas. Dissenting was, um, nobody. It's about US taxation and tax credits given due to overseas taxation.

[Url]www.supremecourt.gov/opinions/12pdf/12-43_g20h.pdf[/url]

Here's the background:

[Quote]
During the 1980s anf 1990s, the UK's Conservative Party controlled Parliament and privatized a number of government-owned companies. These companies were sold to private parties through an initial sale of shares, known as a “flotation.” As part of privatization, many companies were required to continue providing services at the same rates they had offered under government control for a fixed period, typically their first four years of private operation. As a result, the companies could only increase profits during this period by operating more efficiently. Responding to market incentives, many of the companies became dramatically more efficient and earned substantial profits in the process.

The U. K.’s Labour Party, which had unsuccessfully opposed privatization, used the companies’ profitability as a campaign issue against the Conservative Party. In part because of campaign promises to tax what it characterized as undue profits, the Labour Party defeated the Conserva­tive Party at the polls in 1997. Prior to coming to power, Labour Party leaders hired accounting firm Arthur Ander­sen to structure a tax that would capture excess, or “wind­fall,” profits earned during the initial years in which the companies were prohibited from increasing rates. Par­liament eventually adopted the tax, which applied only to the regulated companies that were prohibited from raising their rates. It imposed a 23 percent tax on any “windfall” earned by such compa­nies. A separate schedule “se[t] out how to quantify the windfall from which a company was benefit­ting."

Britain privatized a bunch of things. Promises were made that the companies couldn't charge more, so if they wanted to make money they had to become more efficient. The private companies did. The socialists thought it's a problem and called the profits a "windfall."

In a sense, the British government punished private industry for doing what it was supposed to do. The argument is that the private companies made too much money by charging what the government would have charged.

And the Labour lefties are opposed to it. Gotta wonder why.

My wife is hotter than your wife.

[quade 3]

I was unaware the US Supreme Court had any say whatsoever in other countries.

Meh.

quade -
The World's Most Boring Skydiver

[kallend 1,648]

quade

I was unaware the US Supreme Court had any say whatsoever in other countries.

Meh.

Didn't it implicitly OK torture in other countries?

...

The only sure way to survive a canopy collision is not to have one.

[quade 3]

kallend

***I was unaware the US Supreme Court had any say whatsoever in other countries.

Meh.

Didn't it implicitly OK torture in other countries?

That's attempting to justify US actions. I'm talking the tax policy of a different country which I don't think we carry any sway over.

quade -
The World's Most Boring Skydiver

[champu 1]

lawrocket

Took a look at this Supreme Court opinion released today in PPL v. Commissioner of the IRS. The opinion was written by Justice Clarence Thomas. Dissenting was, um, nobody. It's about US taxation and tax credits given due to overseas taxation.

[Url]www.supremecourt.gov/opinions/12pdf/12-43_g20h.pdf[/url]

I don't see anything particularly funky in the decision, although I haven't studied it all that intently. To me it's the Third Circuit's decision that was off-putting, [paraphrased] "Math is hard, let's go shopping!"

[lawrocket 3]

quade

I was unaware the US Supreme Court had any say whatsoever in other countries.

Meh.

The SCOTUS case was about whether the company could claim credit from its US taxes on the basis of the additional taxes it paid in the UK. (Supreme Court said that the Code says they already got taxed on it).

My post was about how the English experiment in privatization actually worked. And how the fact that it worked so well became a political target for those who never wanted it to begin with.

Government inefficiency rooted out when profits are at stake.

My wife is hotter than your wife.

[Bertt 0]

I just think it's funny that Arthur Andersen is involved in this example.

You don't have to outrun the bear.