I'm with option b) The politics of envy and false indignation just ain't working
If national treasuries want to benefit from the fruits of capitalism, some good old-fashioned market economics might help.
Because when your wares become too expensive, people begin to shop elsewhere. Or so says my old friend Adam Smith.
Lowering corporate tax rates is a step in the right direction.
Logically, it attracts more companies and investment.
Those companies can then hire people.
Those hired people can then get off state assistance (thus reducing government spending).
Those hired people can also spend more money and pay off their debts.
And (gasp!) they can even start paying more taxes.
Why didn't anyone in government think of this before ? Is their some sort of vested interest in keeping cushy government jobs, nice pension plans, murky accounting systems and massive boondoggles in place ?
Say it ain't so Joe.
Increasing the local job centre's budget might keep more people unemployed for longer but won't stimulate the economy very much.
New jobs and investment stimulate economies.
When you chase away (or chastize) the providers of new jobs and investment the economy just stagnates further (business at the job center might pick up, though).
National and corporate tax rates are a simple line item for most multi-national businesses.
Countries that offer lower wages and lower taxes win their business.
And unless you can run your economy like Joseph Stalin, resistance is futile.
The UN can barely call a quorum to agree on a half-assed suggestion, so I can't see them unifying the world's corporate fiscal policy.
Let's face it, without healthy tax competition from countries like Ireland, most of these over-stretched, overspent governments would have bled every last cent from the companies unfortunate enough to be trapped.... er... set up within their jurisdictions.
Tax avoidance is not "unfair" or "immoral".
It is standard practice for any correctly managed corporation.
Like shrinking growth, unemployment or high inflation rates, high rates of tax avoidance are just symptoms of deeper economic problems. Governments whose economic policies indicate that "moral hazard" has now become a quaint old-fashioned notion should not lecture us on fiscal "morality".
The "immoral" part occurs when the common man / small business with no tax accountant needs to be shaken down even harder by the powers that be. How can that possibly be moral? Quid pro bono?
In a normal market economy, companies and individuals that can't make ends meet go bankrupt.
But now, we have governments, banks and currencies that are "too big" to fail.
Solution?
Current wisdom seems to be: apply a little quantitative easing here, a big bail-out there, remove a few million jobs and everything will be sorted for another fiscal quarter.
Use the newly printed virtual money for further wastage, patronage, corruption and bail-outs.
Lather, rinse and repeat.
Any remaining wealth will quickly trickle upwards into fewer and fewer hands.
This is like reverse Reagonomics voodoo and price-indexing on steroids.
I am sorry but giving these elected fools more tax money is like buying a chronic alcoholic more booze. It has to stop.
Biting the hand that feeds IT
