Tag Archives: political economy

Foreign Taxation

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Various nations insist on taxing corporations that provide digital services—imposing a “digital services tax”—to ensure, those nations are pleased to claim and as most clearly articulated by Canada’s Finance Minister Chrystia Freeland, that

everyone pays their fair share

The Canadian government has been explicit in another direction, also: Canada will act unilaterally if an international taxing regime isn’t worked out by the OECD quickly enough to suit them.

French Finance Minister Bruno Le Maire has said he’ll demand a European Union response if the US goes ahead with our impertinent objection to the French government’s decision to tax those same digital service-providing corporations.

There are three problems with this insistence.

One is—let’s be clear—those corporations providing digital services are almost exclusively American companies—Alphabet, Facebook, and so on. European nations and Canada (and Indonesia) don’t want to compete economically in the digital services industry, for all that they’re jealous of American success. Rather than repeating that success for themselves, they want, in the finest socialist tradition, to cap our success: they’re implementing mercantilist, protectionist taxes against us.

The second problem is that these nations refuse to identify what “fair share” is, and they refuse to say what their limiting principle is regarding that claimed fair share. That refusal makes clear that their position is a deliberately open-ended one: “fair share” always will be “more,” and the limit of their principle is “all of it.”

The third problem is these nations’ naked assault on American sovereignty. Using the OECD as their tool, these nations are demanding that American domestic taxing laws be submitted to international approval and control.

Each of these alone is a contemptible disguise of those nations’ refusal to compete, whether economically, politically, or morally. Any combination of them is…unacceptable.

The Biden administration will be inviting national disaster if it accedes to any of these.

Time to Buy

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Ex-President Barack Obama (D), he of the open contempt for ordinary Americans, us bitter Bible- and gun-clinging denizens of flyover country (i.e., the vasty expanse of America that lies between the western coast and the northeastern coast), is at it again.

Former President Barack Obama, in his latest memoir, criticized Americans for liking “cheap gas and big cars” more than they care about “the environment”—even during a catastrophic event like the 2010 Deepwater Horizon oil spill.

And

…many American voters for decades had “bought into the idea that government was the problem and that business always knew better….”

That last is fully vindicated by the arrogant Know Better attitude of Obama and his ilk, who insist that Government is the only solution, and us petty voters need to sit down, shut up, and do what we’re told.

It’s true enough that business is imperfect and often screws up. However, even with that, it’s axiomatic that business always knows better than Government.

With Obama spouting off again, it looks like it’s time to go out and buy a Humvee and a muscle car or two.

A Start

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But badly insufficient. The Trump administration is trying to form an ad hoc coalition of Western nations that would respond to the People’s Republic of China’s economic aggression. The effort would

create an informal alliance of Western nations to jointly retaliate when China uses its trading power to coerce countries, administration officials say. They say the plan was sparked by Chinese economic pressure on Australia after that country called for an investigation into the origins of the Covid-19 pandemic.
…
“The West needs to create a system of absorbing collectively the economic punishment from China’s coercive diplomacy and offset the cost.”
Under the joint retaliation plan, when China boycotts imports, allied nations would agree to purchase the goods or provide compensation. Alternatively, the group could jointly agree to assess tariffs on China for the lost trade.

Taking defensive measures is necessary, but it’s badly insufficient. This coalition needs also to be ready, willing, and able to take offensive action, action that would inflict far more damage and cost on the PRC than its own economic assaults would inflict. Tit-for-tat tariffs would be less than useless, they’d only be practice bleeding.

So far, though, “the West” other than the US has shown little backbone for facing down the PRC’s aggression, economic or otherwise. Sadly, too, Progressive-Democratic Party Presidential candidate Joe Biden has shown little inclination to do anything that might upset the men and women of the PRC government.

The Business of Business and the Wuhan Virus

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Another precinct is passing in its results.

After scrambling to hoard cash in the spring, some large US companies that halted their dividend payments are reversing their decision, a sign that their leaders believe the worst of the crisis is behind them.

Mark Zandi, Chief Economist at Moody’s Analytics:

The resumption of corporate dividend payments is an encouraging sign that executives believe that the pandemic will soon be behind us.

And

[Kohl’s r]evenue fell 14%, compared with a 23% drop in the previous quarter. Kohl’s said it would resume its dividend in the first half of 2021.

And

Retailer TJX Cos said last week that it would resume its dividend, but at a 13% higher rate than it last paid in March, citing its cash flow and $10.6 billion in cash on its balance sheet. The company has reopened most of the TJ Maxx, Marshalls, and HomeGoods stores it had closed in the spring.
“We are very bullish on the longer-term outlook because that feels significantly better than it did at the beginning of [the third quarter] when we didn’t know where all of this was heading,” CEO Ernie Herrman said on a conference call.

Those are just a few of the myriad illustrative examples that aggregate into the trend. It’s time the bureaucrats in our governments, at all levels of jurisdiction, stopped abusing their authority and stopped their panicky responses to the Wuhan Virus situation.

Full stop.

Tyranny and the First Amendment

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On the matter of Target’s initial attempt to ban a book (Irreversible Damage: the Transgender Craze Seducing Our Daughters for those following along) because some folks objected to it, followed by Target’s reversal and decision to sell the book after all, a letter-writer published in The Wall Street Journal‘s Thursday Letters had this remark:

Lobbying the government to make a book illegal is pro-book banning. Lobbying Target to take a book off the shelves is pro-capitalism.

This is not even close to correct. Lobbying Target to take a book off the shelves is suppression of speech, even when done by private citizens.

Not buying the book is capitalism. Encouraging one’s fellows to not buy the book—boycotting the book—is capitalism.

Demanding the book not be sold denies others those same choices, along with denying them their opposing choice to buy the book. That’s at the core of tyranny.