There isn’t room here to consider the political, financial, economic, legal, and diplomatic implications of the Brexit for Britain, the EU, and the world. In any case, this being such an unprecedented and historic event, nobody without shamanistic powers knows what the future holds, and even the most visionary of soothsayers will struggle to tell you how it will all pan out. What we do know is that the EU, for all its manifold faults, is generally liked by multinationals because of the single market and the relative certainty that it offers. And they like Britain in particular because of its EU membership, low corporate tax, flexible labor market, and relatively light regulation (in comparison to other member states at any rate). Hence, a great many of them urged Britain to remain. Time will tell how these multinationals will continue … Read More »
It is hard to think of any country in recent history which has had such a singular focus on one tax than Japan has had with its consumption tax. The reason for this is that, as many inside Japan, and economists and analysts outside it, have come to the conclusion, a consumption tax hike is the only thing likely to rescue Japan from future fiscal oblivion. And there are some compelling reasons for increasing the tax. One of them is that, according to the International Monetary Fund, in dollar terms each percentage point increase in consumption tax generates almost USD20bn in revenue. That’s some chunk of change for a relatively minor increase in tax, and would obviously go some way towards budget deficit alleviation and public debt reduction. And at eight percent, the tax is lower than equivalent levies – … Read More »
The world is a very uncertain place at the moment. Probably more uncertain than at any period in the post-World War Two era. Obviously, aside from China’s seemingly inexorable economic slow-down, the possibility of a “Brexit” is a major source of global economic uncertainty. And, just to add to the intrigue, the possibility remains that if the British people vote out of the European Union on June 23, Britain itself could actually remain in. This is because the referendum result is not legally binding on the UK Government, or the EU for that matter. Remember the national referenda on the Lisbon Treaty, which took place almost 10 years ago? After voting against the Treaty, the voters of Ireland, Denmark and the Czech Republic were respectfully invited by the EU to go back to the polling booths and make the “right” … Read More »
On a slightly upbeat note, congratulations go to Italy’s taxpayers for celebrating “tax freedom day” a little earlier this year. For those unfamiliar with the concept, tax freedom day is the theoretical day in the year when you stop working to pay the government, and start keeping what you earn for yourself. And in that sense, I suppose it is a good indicator of just how much of a country’s income is taxed in one form or another.
Although most Americans are heard to grumble about their taxes, in the United States tax freedom day normally arrives well before summer (in the northern hemisphere), usually towards the end of April. But if you think things in Italy are bad, try living in Belgium, where, shockingly, last year you had to work into August before pocketing your own money! For Italy … Read More »