This recent article by Vanessa Houlder of the Financial Times, London, details the economic success that Luxembourg has enjoyed by keeping its business tax rates at a moderate level and the threat to that success from high tax governments colluding to force it to raise its rates. Ms. Houlder seems to be carrying the water for the EU and the OECD in calling for “European governments to pull together and stamp out harmful tax competition.” Elsewhere Ms. Houlder reports that “the OECD is intent on closing loopholes” and wants to “stamp out treaty shopping” by big, international companies who seek to avoid taxes. Likewise, consumption taxes for Luxembourg citizens “are already set to rise.” The general tenor of the article is that governments have a right to collude to ensure that no company or individual can escape paying high taxes.
Governments try to make a virtue out of doing something for which they would prosecute private companies, namely price fixing via a closed cartel. They wish to trap capital and profits behind a façade of legality and will bully any country, especially a small country, into adopting their confiscatory tax regime that is the foundation of their bloated and inefficient welfare states. They want to prevent Microsoft and Amazon, for example, from escaping their clutches just as the former communist countries of the Warsaw Pact tried every means possible to prevent their citizens from fleeing to the West. The US is part of this government led conspiracy. Recently it pressured Switzerland to reveal the names of American holders of Swiss bank accounts in their search for assets to plunder on behalf of the American welfare/warfare state. Naturally, these governments use propaganda to incite the masses to start a new class war.
But if competition is right and proper for companies and forming a cartel for the purpose of holding prices high is not only illegal but also immoral, why is government itself exempt? No one since FDR’s socialist brain trust would accept the argument from the private sector that a cartel enforced price uniformity was needed in order to establish a level playing field, yet tax uniformity is lauded by governments and their main stream media lackeys. Surely, cartels, especially those enforced by law, create huge inefficiencies in the delivery of services. This must be one of the causes to which former member of the European Parliament Godfrey Bloom was alluding when he constantly questioned the unconscionable perks and benefits of European Union civil servants and their constant demand for even more. Without tax competition what is there to enforce spending discipline by government? Nothing. Patrick Barron