Nobody is pretending that Spain is out of the woods yet after getting sucked into the eurozone crisis. But the way the economy is performing compared to the rest of the eurozone suggests that the Government must be doing something right in the area of economic policy. Last month, the Bank of Spain said that improving domestic demand was helping to sustain a recovery, and that the eurozone’s fourth-largest economy would grow by 1.4 percent in 2014 and possibly by as much as 2 percent in 2015. Given anemic growth elsewhere in the eurozone, especially in France (predicted 0.5 percent growth this year) and Italy (probably even slower 2014 growth than France) – the second and third-largest economies in the single currency area – it almost looks like boom time in Spain. Why is this the case? Well, economies are … Read More »
…Hungary, and it’s going to take some beating I think. Most countries now provide tax incentives in one form or another to the renewable energy industry, while simultaneously increasing or creating new taxes on the use of fossil fuels. Yes, the jury is still out as to what the perfect environmental tax policy should be to reduce emissions of greenhouse gas, or, indeed, whether taxes work at all. But it’s still an eminently sensible policy you might think, when you’re trying to save the world. Hungary thinks rather differently, and in its wisdom has slapped an environmental levy on solar panels. This is because, says the Government, solar cells contain hazardous materials and are therefore difficult to dispose of at the end of their lives. The solar industry counters that panels are actually recyclable, and in any case, have very long lives, … Read More »
Another good day for an elected chamber was had in the United States Congress last week after the House of Representatives voted overwhelmingly in favor of ”dynamically scoring” major new tax legislation. In essence, dynamic scoring means that the likely economic consequences of tax reforms are factored in to calculations on their future revenue effects. Almost unbelievably, the Congressional Budget Office and the Joint Committee on Taxation currently use “static” revenue estimating techniques, which make the assumption that tax policy changes – regardless of their magnitude – have no impact on the economy’s performance. Under such an assumed scenario, tax cuts are inevitably going to lead to falls in revenue, which is perhaps one of the major reasons why it has become virtually impossible for Washington to have a sensible debate on the issue of tax reform. Any measure put forward by … Read More »
Vietnam seems to be coming to terms with Uber in a way which will allow tax to be collected on its operations while legacy taxi firms receive some benefit from the revenues they are losing. I’m not quite sure whether this deserves approbation or censure. As with other mold-breaking Internet-based developments, entrenched monopolies, whether they be established taxi firms or central banks, are threatened by such new phenomena, which work outside conventional legal and tax structures, to the benefit of consumers and individuals. Reacting by banning or taxing them is not pro-consumer, and to that extent, Vietnam’s efforts to muzzle Uber’s operations even before it gets off the ground in the country are reprehensible.