Tag Archives: taxes

A Taxing Case

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Apple won its appeal of a European Commission ruling that it owed €13 billion ($15 billion) in back taxes because Ireland had illegally subsidized the company.

The General Court agreed with Ireland’s argument that the matter wasn’t an illegal subsidy because the nation cut similar tax deals with all comers.

The EU, of course, is not happy. It’s Tax Justice Coordinator (no irony in that title), Tove Maria Ryding, said,

If we had a proper corporate tax system, we wouldn’t need long court cases to find out whether it is legal for multinational corporations to pay less than 1% in taxes.

She’s not far wrong, but not in the way she intends. If the EU had a proper corporate tax system, if it were truly interested in tax justice, if the rest of the member nations had proper corporate tax systems, the EU and its constituents would have far lower tax rates and be more effective competitors with Ireland, Luxembourg, and Netherlands on taxes and business attractions.

Then neither the EU nor its other constituent nations would need long court cases in efforts to force low-tax nations to raise their taxes, which would only be to the detriment of those nations’ businesses and citizens. And the EU and those other constituent nations’ citizens could share in the prosperity the citizens of the three enjoy, rather than forcing those to their prosperity and opportunities to the level of the rest.

“Tax Us”

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Some members of the rich class have formed a group and extended a demand that governments should tax all members of their clique.

Over 80 men and women worth seven figures from the US, UK, Germany, New Zealand, Canada, and the Netherlands calling themselves the “Millionaires for Humanity” have signed an open letter asking their governments to “raise taxes on people like us. Immediately. Substantially. Permanently.

The Americans in that crowd first must prove they mean it by committing—with publicly available means for verifying that they’re honoring that commitment over the succeeding years—to making donations to the US Treasury of the amounts they’d pay under this “tax us” plan.

They don’t get to force their taxes on the rest of us, especially when they don’t believe in them themselves.

Heads Up

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Be very heads up, this fall.

The coronavirus pandemic shook the US economy. It hasn’t shaken Democrats’ fervor for trillions of dollars in tax increases, and significant income redistribution is still likely as soon as 2021 if Joe Biden wins the White House and Democrats control Congress.

Senator Ron Wyden (D, OR):

It’s all the more important to protect the retirement and security of working [people] and make sure the wealthy pay their fair share. We’ll be ready to go in January of 2021.

The Progressive-Democrats ignore the simple, basic concept of economics that if you raise the price of a good, you’ll get less of it bought, and ultimately, less of it produced. Raising taxes on Americans will reduce the amount of money they have with which to buy goods and services, and it will reduce the amount of labor they’ll be willing to provide.

Wealthy pay their fair share? Wyden and his Progressive-Democrat fellows continue to refuse to say what that fair share is. That refusal leads us to the only logical conclusion: “fair” means “more and more and more.”

This is their demand to inflict their socialist ideology on Americans.

Do This In Parallel

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There’s a movement afoot in Congress to subsidize employees, lost employees, and prospective employees through employers and prospective employers.

The House plan would give employers enough money to cover up to 80% of their wages and benefits, up to $45,000 per worker, plus a credit for fixed expenses like rent. Eligible companies would simply keep taxes withheld from employees’ paychecks. If that isn’t enough to equal the credit, they could get additional money from the Internal Revenue Service.
Smaller businesses would get the subsidy for all workers, while larger ones would get it only for furloughed workers still receiving wages or benefits. The break would be scaled to each employer’s revenue loss during the coronavirus pandemic.

There are a couple of tweaks needed, stipulating purely arguendo that this is a useful idea:

Don’t make the thing a one-size-fits-all arrangement. Weight the $45k by the regional- or MSA-based cost of living.

Put a milestone-based (not calendar-based) automatic expiration on the subsidy and credit, something along the lines of the unemployment rate in the region/MSA falling below a specified threshold that’s consistent with the region’s/MSA’s [5-yr pre-Wuhan Virus average] unemployment rate multiplied by a greater-than-one factor or a return of the region’s/MSA’s GDP to [80%] of its pre-Wuhan Virus level.

Such a move, reducing revenue flowing into government as it would, should come with a parallel: a reduction of government spending commensurately. After all, the only Constitutional purposes for Federal spending are three: to pay the Debts and provide for the common Defence and general Welfare of the United States.

The long pole in that is defense spending—an especially important pole in an environment of aggressively acquisitive Russia and the People’s Republic of China and of a nuclear and nuclear wannabe northern Korea and Iran.

General Welfare spending, limited as it is (for all that the limit has been winked at for too long) to the 16 purposes enumerated in Art I, Sect 8, doesn’t take many dollars.

Our Debts will become much more manageable and repayable with spending held within revenues.

Encourage employers to hire—with, of course, that caveat of an automatic expiry to the incentive—but spending cuts must be done in parallel with the revenue reduction.

Land of Taxes

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New York City is suffering from loss of reduction in tax revenue as a result of the city’s and the State’s economic shutdown by government fiat during the Wuhan Virus situation.

One 49-year-old tech entrepreneur told The Wall Street Journal he and his family have moved permanently to their second home in the Hudson Valley from Manhattan. …
For tax purposes, he says, he and his peers are aware that if their children still attend school in the city, it is hard to argue the family has left. The man is considering pulling his children from the city’s elite private schools and is looking at public and private schools in the suburbs. He estimates that if he can persuade the city he is no longer a resident he will save more than $100,000 a year in city taxes alone.

This guy, to be sure, is one of the Evil 1%, so he lives more expensively than the rest of us. Even so, that city tax bill says all there is to say about progressivism in America. His bill compares with a national median income of $63,700 and a New York State median income of $82,200 in 2019.