One swallow doesn’t make a summer, but two are a bit more promising, and that’s what we are seeing in the EU/China tradasphere, with harmony breaking out on the oenophile and polysilicon fronts. In a parallel WTO case, over China’s rare earth export policies, the country is left looking rather battered after an investigation, and said mildly only that it “regretted” the decision against it. The US, on the other hand, continues to present a hard front towards China over its trading policies for solar energy exports.
What’s really going on here is a battle between pro-trade and protectionist factions in the various regions involved. Any given short description of the batteground is going to be over-simplistic, but with that in mind, let’s try to disentangle some of the threads of these ongoing trade wars.
In each of the three countries (we’ll … Read More »
By George! The UK’s Chancellor (Finance Minister) seems to have brought off the impossible by announcing a budget which everyone agrees with. Of course the Opposition (its duty is to oppose, as they always say) sent up some ritual distress flares, but they illuminated more of Labour’s distress than Osborne’s. Different commentators had different takes on the cleverness of the Budget, from very clever to surpassingly clever; but no-one called it stupid. Everyone realizes that it is an electoral Budget; that is hardly worth saying. What is perhaps worth observing is that there is no doctrine in the Treasury at present; there is just a cold calculation of how to retain and increase political power. Like it or not, this is the most impressive governing engine that has been seen in Whitehall for decades. And in fact there is quite … Read More »
The outgoing European Parliament is remaining true to its warped principles, and is going out on a high, waving through a suicidal prescription for enhancement of the AMLD. Ah, you didn’t know? That stands for the Anti-Money Laundering Directive, and to give you an idea of how it works, last week a friend of mine in Italy received a letter from a local bank (mischievously backdated by two months) demanding immediate compliance with the Directive, on pain of account closure. Passport, utility bill, the usual stuff. He wasn’t going to be in Italy for a month, but they wouldn’t accept this. So the account will be closed, but by him, not by them! Instead, he will use another, non-EU bank account where they still have human beings rather than bureaucratic automatons in the pay of Strasbourg. How many money-launderers do … Read More »
“Hard-Faced Intermational Mining Behemoth Grinds Down 3rd-World Workers.” Sounds all too probable, yes? “Corrupt Government Reneges On International Mining Contracts.” Sounds even more probable, and there have been lots of cases of that lately. If you don’t pay the Ministers then they’ll chuck you out; and if you do, you’ll end up in Leavenworth. Who’d be a mining executive? Now of course none of the above applies to the saintly mining companies who are helping Indonesia to exploit, sorry, manage, its mineral resources; and of course Indonesian ministers are the cynosure of probity. So how to explain what’s going on with Indonesian mining? Presumably the (non-Indonesian) mining companies employ tens of thousands of local workers, and if they are modern, socially responsible companies, no doubt they have an entirely paternalistic attitude towards those workers (no, I am not being sarcastic, … Read More »
Common sense you surely needn’t look for in the European inheritance tax labyrinth, demonstrated this week by the latest twist in the French/Swiss farrago. I’m not even going to try to opine on the combatants’ positions. It’s obvious to everyone (me, that is) that inheritance tax ought to be abolished. It’s immoral to tax money that has already been taxed; and it’s doubly immoral to get in the way of inter-generational transfers. The relationship between parents and children is fraught enough already without government stepping between them. Of course it cuts in all sorts of unexpected directions: Joe hopes that his Dad’s first wife, Isobel, dies before his Dad does (bad); but he hopes that his Dad outlives her (good); but his step-sister Madeleine is conflicted because she stands to get more through her mother’s will than directly from her … Read More »
As usual during this period of fiscal stress for countries across the world, we look in vain for any cuts in taxes. But at least in Malta they are trying to improve matters for businesses through simplification of the tax system and throttling back the impositions of government. As I say that, I can already hear the offended wailings of the anti-brigade: oh, but Malta is offshore, it is a tax haven, it steals revenue from big “respectable” countries like Germany by helping banks and gaming companies with low tax rates, so that they can’t get the revenue to help their poor, huddled masses to survive the rigors of the nuclear winter we are all trying to survive. Let’s be clear: the “nuclear winter” is a direct result of the debts taken on by those countries’ politicians in pursuit of … Read More »
Surely I can’t write today without mentioning Dave Camp’s tax reform draft, which will presumably go the way of his colleague Max Baucus’s equivalent drafts. That two such intricately crafted prescriptions for a future US tax system will fall victim to bi-partisan politics may seem an indictment of democracy as she is practised nowadays, and indeed the Economist asks this week whether democracy is failing us. Of course it concludes, as did Winston Churchill, that democracy is a bad system – but that all the others are worse. Democracy suffers from its reliance on the level of education of voters, which is still far below what it would be in an ideal world. But ask this question: are the bulk of voters better or less informed today than they were a hundred years ago? The fact that they are now … Read More »
Spain and Italy are both in tax-cutting mode this week, the former more convincingly than the latter. By the time you’ve climbed to the top of the greasy pole, you’ve probably had to shed most of your principles (if you ever had any) as “not wanted on voyage,” and in any case you can only go as fast as your party and the economy you inherited will allow you.
Despite his rhetoric, Mariano Rajoy certainly didn’t have much opportunity to display any right-wing anti-tax credentials during his first turbulent months in office, when it was a question of preventing the ship from sinking. Now perhaps things are a bit different, and Rajoy’s announcement of job-enhancing social security cuts may have a real impact on the economy, especially since restrictive employment protection laws have been loosened to some extent. Cutting into the … Read More »