Tag Archives: political economy

You Didn’t Earn That

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The European Commission has criticized seven member states for “aggressive” tax practices, whereby governments try to undercut others to attract multinational companies.

Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation, and Customs doesn’t like competition; he actually thinks it interferes with the “integrity of the European single market.”

[T]hese practices have “the potential to undermine the fairness and the level playing field in our internal market and they increase the burden on EU taxpayers.”

This, of course, is nonsense on a number of fronts.  The Commission has yet to justify the high taxes of those member nations that are so put upon by the others’ low(er) tax rates.  The Commission has yet to say how competition is disintegrative.  The Commission has yet to explain why the playing field cannot be leveled by those high-tax nations lowering their tax rates and thereby also lowering the burden on those EU taxpayers who are citizens of those high-tax members.  The Commission has yet to demonstrate that tax competition creates, in any way, an uneven playing field—especially since the varying national tax rates are fully within the control of those nations.

Besides, that money belongs to EU Governance, not to the people who earned it or whose enterprises earned it.  And you member nations: your sovereignty belongs to us.

Because, Tax

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In a further demonstration that the Progressive-Democratic Party knows only how to tax and to raise taxes, there’s this.

Senate Democrats on Wednesday proposed repealing major pieces of the just-passed tax law, in a plan that would raise taxes on corporations, estates, and high-income households to pay for $1 trillion in new infrastructure spending.

And the Progressive-Democrats actually are touting this for the mid-term elections this fall.  It’s not your money, after all, it’s Big Governments, and Progressive-Democrats Know Better how your money should be spent.

Can’t possibly pay for the infrastructure by cutting spending somewhere else.  Mm, mm.

That today’s Republican Party can’t figure out how to cut spending somewhere else (House Speaker Paul Ryan’s (R, WI) Social Security and Medicare reforms come to mind) just compounds the problem, it in no way excuses the Progressive-Democrats’ failure.

Online Retailers and Taxes

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The Trump administration is looking at forcing online retailers to pay the same taxes that their brick-and-mortar competitors must pay.

The Trump administration on Monday urged the Supreme Court to expand states’ authority to collect sales tax on internet transactions, joining a chorus of state officials seeking to overrule a 1992 precedent exempting many online retailers from having to add taxes to a consumer’s final price.

This is a mistake.

  1. This question is a political matter, not a legal/judicial one. If the administration thinks online retailers should pay the same taxes as brick and mortar retailers, then they should offer a bill to Congress (and State governors to their State legislatures) that fills in any gaps in existing statutes that allow online retailers to not pay. Judges cannot make law, as Art I, Section 1, makes clear—even if this is honored egregiously in the breach.
  2. If governments are worried that online retailers are competing unfairly by not paying the same taxes as their brick-and-mortar competitors, the far better solution is to lower the taxes charged the brick-and-mortar companies so they can compete. After all, that’s what was done with the Federal corporate tax rates, both for domestic consumption and to improve competitiveness with foreign competitors, and it’s working quite well.

The Russian Attitude Toward Rule of Law

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And the value of any contract with Russia.  These are demonstrated by Russian behavior regarding Russian natural gas flowing through Ukraine to western Europe.

Having won an arbitration dispute with Russian-controlled Gazprom over natural gas shipments to Ukraine, Gazprom and the Kremlin decided not to honor the ruling or the commitment:

Russia is tearing up its contracts to supply Ukraine with natural gas, sparking another stand-off between Moscow and Kiev and raising fears of new gas supply shortages across Europe during the winter.

In response,

European Commission Vice President Maros Sefcovic warned Friday that the situation raised “concerns not only for the direct supply of natural gas to Ukraine but possibly also for the transit of gas to the EU.”

Maybe he also should think about the wisdom of supporting the Russian pipeline across the Baltic Sea to Europe. Flows in that pipe will be just as fragile and vulnerable as the flows through the trans-Ukraine pipe. Russia is just setting up an additional weapon to use against the EU with it.

An Economic Misunderstanding

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In the wake of Georgia’s decision to halt special tax treatment for Delta Air Lines, Inc, over the company’s decision to cut ties with the NRA, Fox News economics pundit Neil Cavuto asked whether the State’s action “was an example of government interfering in the free market”.

This misunderstands what’s happening.  The government interference in the free market was the State’s gerrymandering its tax code to give special treatment to a particular company.  Stopping a particular special treatment is a step back from that government’s interference, not an extension of it.