Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Migeru was putting together a response to an EU consultation document on VAT harmonisation but I didn't get involved because I'm not a tax expert.

However I often blog on topics I know little about because you generally learn a lot from the discussion that take place on ET in response. Often a short blog asking a few questions starts a better discussion than a long one which tries to give the answers.

This particular diary also risks the wrath of the denizens because they reserve a special hatred for low corporation taxes in general and Ireland's alleged tax competition in particular.

I think they have a good case on the Financial Services Centre - which is an abusive tax avoidance scam - but less so on Irish industrial policy in general.  Hence this diary which attempts to put a (partial) counter argument.

Overall I think they are right - I am all for Tobin taxes and global political controls and harmonised tax rates on global capitalism. "Free" trade priviliges should be subject to minimum environmental controls, human rights, and taxation levels to avoid global capital playing off one country against another.

However in the absence of these systems - which are what neo-liberalism is designed to fight off - I don't think smaller countries like Ireland have any choice but to position themselves nearer the bottom of the tax market if they are to have a chance of competing with Germany and the big boys within the Eurozone.

That is why Merkel and Sarkozy are so keen to kill off Ireland's tax advantage - it stands in the way of their achieving total domination of the Eurozone.  A more equitable Eurozone with transfer unions to ensure stability and greater regional balance is the last thing they want.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 11th, 2011 at 07:10:02 AM EST
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