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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
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