According to the EU. Or at least the European Parliament’s Green Party.
An investigation by the Greens in the European Parliament has shown big companies throughout the bloc are failing to pay their statutory taxes. The party has called for more social responsibility.
I’m always amused by claims that studies—statistics—show anything. At most, they can indicate, even strongly indicate, something, but showing—proving? Not so much.
Be that as it may, and it really is more sloppy elocution than it is factual error in this sort of context, what really interests me is that “failure to pay,” and “social responsibility.”
The Greens presume to be the arbiters of what is social responsibility. Not the citizens, not their aggregate as the society at large. No, it’s these Green Know Betters who will define the term and set the criteria for its satisfaction—for our own benefit, of course.
And that statutory claim?
Luxembourg stood out in the study, where the official tax rate is 29 percent, but corporations paid only 2 percent on average.
Hungary, the Netherlands and Austria were also highlighted as states where actual taxes paid were significantly lower than the official rates.
The study’s authors, at least as summarized by Deutsche Welle, which was citing Süddeutsche Zeitung, show a broad misunderstanding of anyone’s tax code. It’s easy enough to get the total tax paid below a statutory rate, and do so entirely legally.
That’s what deductions, tax credits, tax subsidies, and the like do. What starts out as top line taxable income—before deductions, credits, etc—also does not include some forms of income—income not earned within the taxing jurisdiction, for instance, which is the big player in Luxembourg’s code. All the nations of the EU have their own suite of these, but in essence, these all reduce the income actually subject to tax by large amounts, and then the subsidies pay back into the tax payer other monies—like, for instance, subsidies for setting up “green” energy facilities.
And we arrive at a realized tax rate substantially less than the official yet mythical statutory rate.
Maybe the Greens will reach the point where financial success is socially irresponsible, too.