Maybe,
Ed, you are part of the problem.
That may be so. Part of me, the cussed
part, tells me that I shoud let things deteriorate to some flashpoint.
Another part, the compassionate, says yeah but what about the poor mothers and
the older guys from the Ottawa Valley? And yet another part, the guilty,
gnaws at me because I'm retired and have a decent income. God life is hell
when you're comfortable!
Ed Weick
----- Original Message -----
Sent: Thursday, May 29, 2003 3:53
PM
Subject: RE: [Futurework] Exit ramp for
Europe
Maybe, Ed, you are part of the problem.
I'm a masochist. I'll never leave the food bank.
Ed Weick
----- Original Message -----
Sent: Thursday, May 29, 2003 3:09
PM
Subject: RE: [Futurework] Exit ramp
for Europe
Have it your way Ray. But when the gas tax was first proposed
it was fought by vested interests (autos and highway lobbies). The
feds wanted to introduce it first but backed down under
pressure. It was first introduced, I believe, by Oregon
and later by the federal government.
An indirect tax, a stealth tax on network activities if you
will, can go a long way to monetize much of the productivity that is
currently taking place but is not counted anywhere in our system of
national accounts. So we feel poorer than we actually are. If
we could monetize some of this productivity, tax it in the form of a bit
tax and use it to help provide a Basic Income, then Ed Weick can leave his
thankless tasks at the food bank (some pun on "bank") and can produce his
delightful essays for his web site.
arthur
No, the people who would pay the bit-tax
are the people who now only have the internet for their lives because
the rest of the world is too expensive. It is the poor who
always pay the taxes, whether in rising prices or in sales
tax. Anything else is just sleazy.
When will you reconsider the meaning of the word "productivity" in terms
of mega thinking rather than minimalism. Do you always
want to listen to the same wallpaper music all of your
life? That is why Philip Glass and Steve Reich are so
correct and that is also why most people either "get it" and listen for
personal understanding or can't stand the fact that it shows how
transperent their pants are. In short, you either
listen and say, "That's right" or you say they are just too dumb to
stand and they say, "You got it and I got it from
you!"
REH
----- Original Message -----
Sent: Thursday, May 29, 2003 8:57
AM
Subject: RE: [Futurework] Exit
ramp for Europe
This is why we need a tax system which is congruent with and
takes advantage of a networked economy. I have argued for such a
system with the "bit tax" There are other approaches but the bit
tax would be a good first step at getting at the productivity of
networks for the public purse.
As to tax havens, there is slow, very slow move reform these
places. The political will is lacking since, I guess, the rich
who contribute to political parties have given the slow down signal to
politicians. Too bad, since the tax havens know that a crackdown
is in the works. And have known for some time. Reforms
just seem to die in committee.
arthur
A French
think-tank, the Institut Francais des Relations Internationales,
thinks that, for Europe, "A slow but inexorable movement onto
history's exit ramp is foreseeable." At the same time, those who
want a United States of Europe have brought forth a Constitution
which is now being fiercely debated. This is the background for an
excellent article by Hamish McRae, the economics editor of The
Independent. For those interested in Europe or of the likely scope
of government welfare spending generally in the future, the
following article from yesterday's paper will be well worth
reading.
<<<< EUROPE CAN'T BUCK THE
MARKET
Hamish McCrae
When economics and politics
clash, economics usually wins. Whether or not the proposed European
constitution means that Brussells will have a say over British taxes
-- and there is so much obfuscation that I don't think it is
possible to know at this stage -- economic pressures seem likely to
push down Europe's taxes to UK levels, maybe beyond. The politics
may be for higher taxes but the economics are for lower ones.How so?
Well, the pressure on governments across the whole of the
continent will be huge for the next two generations. Government will
be under tremendous pressure to spend more but also will find it
harder and harder to raise revenue.
This is the result of the
clash between two forces, demography and mobility. The first story
can be told quickly. Continental Europe will become, after Japan,
the oldest region in the world in terms of the proportion of people
over the age of 65. The UK becomes older too, but at a rather slower
rate. The effect of this is that, whereas there are currently just
under three workers for every pensioner in Germany and France, in
another decade there will be only two and a quarter. In 2050, when
young people now entering the workforce are drawing their pensions,
there will be fewer than one and a half workers for each pensioner.
In Italy and Spain the ratios are even worse, for there will be more
pensioners than workers by 2050. In the UK they are rather
better: we are, as a country, getting older, but more slowly than
the Continent.
European governments are well aware of the
implications of these changing ratios on their finances for, not
only will the bulging ranks of pensioners need their
state pensions, they will also be a charge on health and care
budgets. However governments find it hard to make even modest
changes. The present bout of French strikes is one response to
minor revisions to pension entitlements. If the protesters knew the
extent to which their benefits would have to be cut, they would be
rioting, not striking. The big fights are still to come -- and if
the pressure is serious in France it will be greater still in
Germany, Italy and Spain.
If demography adds to the cost of
government, mobility cuts its revenues. One form of revenue, company
taxation, is already in serious decline, as corporations have
started to move their activities to low-tax countries. For the
winners this has been wonderful. Ireland has transformed its economy
by attracting mainly US companies with tax holidays. It does not get
revenue directly from the firms, but it does from the people they
employ locally.
The next stage looks like being the movement
of company headquarters. There have been examples of German
companies moving to Switzerland and US ones to Bermuda. But the
greatest gainer may well be the States, with this administration's
new plans to cut tax on dividends.You can see why the European Union
is anxious to have a reasonable measure of company tax harmonisation
to stop Ireland scooping more than its share of Europe's pool of
foreign investment. But the big game is not within Europe; it is
between Europe and North America and it is hard to see much tax
harmonisation there. For a firm such as DaimlerChrysler or
GlaxoSmithKline, the legal headquarters could rationally be on
either side of the Atlantic. If the tax advantages became big
enough, they could move.
Over the past 10 years there has
already been a sharp fall in company tax rates. This, I suspect,
is a trend that has only just begun. Company taxes are, however,
only a small proportion of government revenues. Here in Britain the
rate is less than 8 per cent. The big money comes from income tax
(including social security contributions) and consumption taxes, in
particular VAT. So what matters is where people earn money, and
where they spend it.
For the very rich, the choice of where
to live is already very largely determined by tax. Tax havens
including Monaco and the Channel Islands do a great business. There
are people who live in the Channel Islands but work, in effect, a
full week in London without, technically, ever being there for
tax purposes.
Much more significant is the mobility of the
young. You can see this best in London, which has become a magnet
for young professionals from all over Europe and indeed North
America. The South-east of England has the largest expatriate
professional community on the globe. Continued professional inward
migration is one of the reasons why me UN now expects the population
of me UK to grow by 12 per cent over the next half-century. This
compares with a rise of 8 per cent in France and falls of 4 per cent
and 22 per cent in Germany and Italy.
Tax is not the only
reason for professional mobility but it is a significant one. Young
professionals are a hugety attractive proposition for any country
They bring skills, they create growth, they pay tax both on their
income and their spending -- and they are not big burdens on social
security systems. I suspect that one of the main areas of
competition within Europe will be for just these people and, of
course, with the EU's single job market they are free to move
anywhere.
If that is great for Britain, it is not so much fun
for, say, Italy or Germany. The nigh-eartimg young move out, leaving
an even greater burden on the taxpayers who stay. The only way to
keep them will be to cut taxes. And the more the European economy
becomes like the American one, the greater the mobility of labour.It
follows that if Europe is to become a more dynamic economic region,
the result will be population movements that force down tax levels
everywhere.
You can see early signs of this already. In
Sweden, the highest-taxed country in the world, spending has
afready fallen from its 1993 peak of 67 per cent of GDP to about 52
per cent. The top marginal tax rate is down to about 60 per cent (it
varies depending on where you live), me same as Britain in the
1980s.
In a more or less closed economy, countries are free
to choose the size of the state sector -- if they want to pay higher
tax and get better services they are free to vote for that But in an
increasingly open economy this choice closes off. It is already, in
effect, closed for company taxation. It is starting to dose for
personal taxation too.
So whatever the provisions of the
European constitution on tax powers, the reality will be set by the
market. Of course it can try to buck that market. The result could
then be rather on the lines suggested by the Paris think-tank, the
Institut Francais des Relations Internationales. In its recent
report World Trade in the 21st Century, it warned that the
EU, even after enlargement, might shrink by 2050 from its present 22
per cent of the worid economy to a mere 12 per cent. "A slow but
inexorable movement onto history's exit ramp is foreseeable." It
painted other somewhat more optimistic scenarios -- but it makes a
sombre backdrop to grand ideas about the European
constitution. >>>>
Keith Hudson, 6
Upper Camden Place, Bath, England
|