Tag Archives: Money/Economy/Taxes

U.S. Market Shines Brighter ???

open quoteU.S. companies, facing slowing markets and rising costs around the world, are taking a new look at their home market.

With growth slowing in China and a slump gripping much of Europe, companies are adding capacity in the U.S., replacing aging equipment and even moving overseas production back from low-cost labor markets, a sign that corporate America could be poised to take a bigger role in the economic recovery.close quote (Read more)

Analysis by Patrick Barron: open quoteDear Sirs:
Perhaps that light at the end of the tunnel is an oncoming train. There is another interpretation to the report that some US companies are “bringing business home”. It is that the worldwide economy is shrinking and is shedding layers of specialization as a result. Austrian business cycle and capital theory explains that an expanding economy–which, of course, does not recognize political borders–requires the establishment of new, more specialized stages of production, which can only be financed with new, real capital. If you became poorer and could no longer afford to pay the neighbor kid to mow your lawn, would you consider it a good thing that you were repatriating this toil to yourself?close quote

Enrich the troops; Ignore everyone else.

There was a fantastic mises daily article about creeping taxes and tyranny in the Roman Empire. Available in audio too. mises.org/daily/3663

Here are some excerpts:

– The advice that the Emperor Septimius Severus gave to his two sons, Caracalla and Geta: “live in harmony; enrich the troops; ignore everyone else.”

– “nobody should have any money but I, so that I may bestow it upon the soldiers.”

– “. . . he doubled the inheritance taxes paid by Roman citizens. When this was not sufficient to meet his needs, he admitted almost every inhabitant of the empire to Roman citizenship. What had formerly been a privilege now became simply a means of expanding the tax base.”

– “One of the Christian fathers, Saint Gregory Nazianzus, commented that war is the mother of taxes. I think that’s a wonderful thing to keep in mind: war is the mother of taxes. And it’s also, of course, the mother of inflation.”

– “the class known as the decurions. This was your prosperous, small- and middle-landowning class who were the dominant elements of the cities of the Roman Empire. They were the class from whom the municipal counsels, magistrates, and officials were chosen. . . . they had donated, not merely their time, but also their wealth to the betterment of the urban environment. Building stadiums and bathhouses, and repairing the streets and providing for pure water were considered benefactions. It was a kind of philanthropic act and their reward was, of course, public recognition and esteem. . . .The central government could no longer collect its taxes effectively, so they made the decurion class collectively responsible for getting revenues and passing them on to the imperial government. The decurions, of course, had as much difficulty as anyone else in doing this, and the returns were, again, frequently inadequate. So the government solved that problem by simply passing a law that any taxes that decurions could not collect from others, they would have to pay out of their own pockets.”

– “merchants and artisans were now compelled to make deliveries of goods. So that if you had a factory for making garments, you now had to deliver so many garments to the government requisitions. If you had ships, you had to carry government goods in your ships. In other words, what we have here is a kind of nationalization of private enterprises, and this nationalization means that the people who use their money and their talent are now compelled to serve the state whether they like it or not. When people tried to get out of this they were then, by law, compelled to remain in the occupation that they were in. In other words, you couldn’t change your job or your business. This was not sufficient because, after all, death is a relief from taxes. So the occupations were now made hereditary. When you died, your son had to take up your profession. If your father was a shoemaker, you had to be a shoemaker. These laws started by being restricted to the defense-oriented industries but, of course, gradually it was realized that everything is defense-oriented.”

– “The Roman people, the mass of the population, had but one wish after being captured by the barbarians: to never again fall under the rule of the Roman bureaucracy.”

Explosions damage Italy tax agency

open quoteThree explosive devices blew up outside the Naples offices of Equitalia, a state agency that collects overdue taxes and fines, breaking windows but injuring no one on Monday night, a police official told Reuters.

Police said no group had claimed responsibility for the attack on the building on Corso Meridionale near Naples central rail station.

Equitalia, whose offices have been attacked before, is deeply unpopular among many Italians who accuse it of using strongarm tactics to collect taxes.close quote (Read more)

True Finn Party Against Euro-Zone Bailout

open quoteWhen I had the honor of leading the True Finn Party to electoral victory in April, we made a solemn promise to oppose the bailouts of euro-zone member states. Europe is suffering from the economic gangrene of insolvency—both public and private. Unless we amputate that which cannot be saved, we risk poisoning the whole body.

To understand the real nature and purpose of the bailouts, we first have to understand who really benefits from them.

At the risk of being accused of populism, we’ll begin with the obvious: It is not the little guy who benefits. He is being milked and lied to in order to keep the insolvent system running. He is paid less and taxed more to provide the money needed to keep this Ponzi scheme going. Meanwhile, a symbiosis has developed between politicians and banks: Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever more money back to our governments.

In a true market economy, bad choices get penalized. Instead of accepting losses on unsound investments—which would have led to the probable collapse of some banks—it was decided to transfer the losses to taxpayers via loans, guarantees and opaque constructs such as the European Financial Stability Fund.

The money did not go to help indebted economies. It flowed through the European Central Bank and recipient states to the coffers of big banks and investment funds.

Further contrary to the official wisdom, the recipient states did not want such “help,” not this way. The natural option for them was to admit insolvency and let failed private lenders, wherever they were based, eat their losses.

That was not to be. Ireland was forced to take the money. The same happened to Portugal.

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Why did the Brussels-Frankfurt extortion racket force these countries to accept the money along with “recovery” plans that would inevitably fail? Because they needed to please the tax-guzzling banks, which might otherwise refuse to turn up at the next Spanish, Belgian, Italian or even French bond auction.

Unfortunately for this financial and political cartel, their plan isn’t working. Already under this scheme, Greece, Ireland and Portugal are ruined. They will never be able to save and grow fast enough to pay back the debts with which Brussels has saddled them in the name of saving them.

Setting up the European Stability Mechanism is no solution. It would institutionalize the system of wealth transfers from private citizens to compromised politicians and failed bankers, creating a huge moral hazard and destroying what remains of Europe’s competitive banking landscape.

Fortunately, it is not too late to stop the rot. . . .close quote (Read more)

France and Germany push to eliminate competition from low-tax countries

From today’s Open Europe news summary (my emphasis in italicized bold lettering):

France and Germany push for greater “tax coordination” in the EU and swifter negotiations on FTT
France and Germany yesterday unveiled a set of joint proposals which they say would boost growth in the EU. The proposals will be submitted to European leaders at their meeting on 30 January. The document reads, “European institutions and member states should accelerate the process of tax coordination…In particular, the negotiation of the European Commission proposals on Energy Tax Directive, Common Consolidated Corporate Tax Base and Common System of Financial Transaction Tax should be accelerated.”

In an interview with Bild, Hungarian Prime Minister Viktor Orbán argues, “We support the initiative of Chancellor Angela Merkel on the fiscal union. But we strictly reject a Europe-wide harmonised tax system. Hungary’s low tax rate is for us a competitive advantage that we cannot do without.” Handelsblatt notes that the Czech Republic has voiced opposition to the introduction of an EU-wide FTT.