Malta In The Crosshairs

By Global Tax Weekly

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 electoral advantage, and their disgraceful use of taxpayers’ money to prop up or outright take over their pals’ banks which had over-reached themselves, indeed mostly by lending to those selfsame governments. Well, now then, isn’t it a strange thing that the countries with the lowest tax rates are the ones with the least debt and the least-burdened citizens? How do you explain the fact that Malta, Ireland, Switzerland, and even debt-challenged Cyprus, not to mention the truly “offshore” European jurisdictions such as the Channel Islands, manage to keep their citizens in the style to which they have become accustomed with national tax takes between 20 percent and 30 percent, while spending behemoths like Germany and the UK struggle to keep their take below 40 percent and still get deeper into debt every year? Not having the OECD’s budget, I don’t visit all of these countries all of the time, but my personal observations certainly don’t support any idea that Brits, Frenchies or Germans are richer or happier than the Maltese or the Swiss. On the contrary: entitlement breeds discontent; nanny government saps willpower and initiative, and when adversity comes, as it has now in Italy and Spain, leaves people without the weapons or the skills or the desire to better themselves. That is the deadly legacy of fifty years of “social partnership,” misbegotten daughter of Beveridge and the welfare state. Amazingly, after 100 years of modern economic experience that amply demonstrate the bankruptcy of social welfare philosophy, there isn’t even one shred of understanding of these basic home truths about human nature among modern-day European politicians. If anything, we are going in 180 degrees the wrong direction, attempting to preserve an unsustainable set of expensive and ruinous social policies in the face of economic reality. It’s a case of mass hysteria, I am afraid, and it’s going to end in disaster.

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