We begin with the dawn of the age of the intern, roughly thirty years ago, with the politicization of legislators and the final divorce of government from economic sanity. Ronald Reagan and Margaret Thatcher were the last two Western leaders who had any real grasp over the actual running of a country. The interns “disease,” as we may call it, was already biting hard, but it took until roughly 2000 before governments around the world had fallen mostly into the hands of a political class of “operators” who when they came into power naturally reached out to the “think-tanks” and the “multilaterals” such as the OECD for their policies, having none of their own. It is unfortunate, but may have been inevitable, that the period of “government by proxy” that ensued was one which saw a largely left-wing set of … Read More »

I had previously praised the UK Government’s Autumn Statement for its long overdue reform of stamp duty land tax on property purchases – but against my better judgment as it turned out. They often say that the devil is in the detail of Government Budget statements, and it transpires that the Autumn Statement is home to a particularly ugly demon taking the form of the so-called “diverted profits tax.” One can see why people get hot under the collar about corporate tax avoidance, when most individual taxpayers see a quarter to a half of their pay taken by the Government before it even hits their pockets and with few legal avenues open to reduce individual tax liability for most salaried workers. But it’s one thing for a Government to talk tough on multinational tax dodging, and quite another to destroy a carefully … Read More »

If there was an award for the silliest tax initiative dreamt up by the unelected Eurocrats in Brussels over the course of the last couple of decades, the savings tax directive and the CCCTB (that’s the common consolidated corporate tax base, for the uninitiated) would be up there competing for the top prize. But surely the proposed financial transactions tax would win hands down. It’s not that I feel sorry for the banks targeted by this tax. On the contrary; it is because of them that this idea has come about in the first place. I suppose you could say that even without the financial crisis, the Šemetas and Moscovicis of this world (Francois Hollande’s former finance minister has now taken over from Šemeta as Tax Commissioner) would be pushing for a so-called Tobin tax, or Robin Hood tax, whatever … Read More »

There are some bad habits that Italy has to banish to give itself a fighting chance of avoiding a potentially cataclysmic economic crisis. For a start, a substantial swathe of the Italian population has gotten into the habit of thinking that taxation is a voluntary exercise. And the Government continues to spend money it doesn’t have. The result is a sticky budget deficit which the Government is struggling to contain, and sovereign debt worth 130 percent of GDP and rising. The economy also has a nasty habit of stalling and then failing to re-start. And it is difficult to see how the Government will break the cycle. Although cultural attitudes are largely responsible for rates of tax evasion in any given country, Italy’s tax system seems to provide ample scope for it to take place because a) it is so … Read More »