Daily Archives: 6 December 2018

Still a Foolish Tax

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The EU’s usurious digital tax on international tech companies that they had proposed has met with sufficient resistance from low-tax member nations—Ireland and several northern European nations—that France and Germany, the drivers of the proposal, have offered a modified version.  This new effort would

  • limit the tax to a 3% levy on online advertising revenues rather than all online revenues
  • effectively exempt Amazon, AirBnB, and Spotify—a sop to non-EU administrations, especially Trump
  • run until 2025

The beef underlying this drive to tax techs centers on tech firms paying less tax than putatively traditional firms on their EU earnings.

The European Commission estimates traditional companies pay 23% tax on profits—compared to just 8 to 9% for internet firms, with some paying effectively none.

Given that low tax rate nations like Ireland and Luxembourg are attractive to businesses, including tech firms, the foolishness of this new proposal is exposed.  It tries to get a common, high, tax imposed on tech firms at least.

Maybe not foolishness, so much as cynicism.  It remains inconceivable to the EU to lower its overall taxes to competitive levels rather than trying to suck those low-tax members into raising theirs to uncompetitive levels.

Macron and Nationalism

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French President Emmanuel Macron decries nationalism when he’s taking his swipes at President Donald Trump.  But he’s only showing his nationalistic, cynical hypocrisy when he does that.

As The Wall Street Journal has noticed,

[T]he French are nationalist to the core. Ask the European parliamentarians and their staffers who must make the expensive, time-consuming, carbon-emitting trip from Brussels to Strasbourg once a month to maintain the absurd fiction that French Strasbourg is the home of the European Parliament. Ask any European negotiator who has tried to prune back the Common Agricultural Policy, a giant boondoggle under which France is the largest recipient of funds. Ask any Italian diplomat about French policies in Libya. Ask any American negotiator about France’s approach to trade.

And this from Germany’s Finance Minister and Vice-Chancellor, Olaf Scholz on 28 November.

Here is my proposal: In the medium term, France’s seat on the Security Council could be converted into a seat for the EU. In return, France would then have the right to appoint the EU ambassador to the United Nations in perpetuity.

It really doesn’t get much more anti-nationalist than that, right?  Give up the nationalist seat in favor of a continental seat?

Macron and his anti-nationalist government demurred, the very next day.

When defending our national positions, we take all European positions into consideration. We actively participate, together with Germany and all other member states, in the coordination of the EU’s position.

Of course, you do.  So long, as it suits our national positions.

No, insists anti-nationalist Macron.  We’ll keep our French seat, thank you.