Governments certainly benefit from being rather lazy with tax thresholds, which somehow seem to move much slower than earnings growth, so that more and more people fall into higher rate tax bands each year. This phenomenon is usually referred to in tax circles as “bracket creep,” when tax bands fail to keep pace with wage inflation. Germany has its own phrase for it however, which translates as “cold progression.” But while Cameron has at least expressed a desire to thaw the cold progression, the German Government has consistently rejected all calls to give German taxpayers a break by shifting tax thresholds for a number of years now, with the latest rejection coming through a spokesman for Chancellor Merkel. It seems something of a mean-spirited stance given that the Government has eradicated its budget deficit, and the German economy, until recently, … Read More »
So the European Court of Justice, supposedly the guardian of the sacred freedoms of the European Union, has chickened out of one of most important issues currently confronting the EU, at exactly the moment when it should have taken centre stage and erected or reaffirmed some principles for the Union to follow.
In recusing itself from any involvement in the structural legislative processes of the Union over the question of the Financial Transactions Tax, the Court has diminished itself and the Union, sending a message that administrative convenience is a more important principle than judicial rectitude. It will be many a long day before it recovers from this piece of egregious cowardice, if it ever does.
There are multiple theories to explain the court’s behaviour (I hereby deprive it of its capital letter – it no longer deserves it), but the most … 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 »
Germany is in the grips of its economically destructive Grand Coalition agreement, which we have previously had cause to criticize, and which will prevent any business-friendly tax measures from being implemented for as long as it lasts, so we should at least give a subdued cheer for Finance Minister Schäuble’s determination to press ahead with an increase in the pension age, although the increase, from the current 65 (as almost everywhere) to 67 by (wait for it) 2029, is underwhelming. Life expectancy in Germany has risen by 10 years in the last 50 years to 80 years at present: that may not sound very much, but consider that post-retirement lifespan has therefore gone up from 5 years to 15, on average, while the retirement age has not changed. No wonder that the pension system is in a mess. By 2029, … Read More »