RB:
>> . . .
She also explores how states have lost control over taxation where their
spending power is beyond their own control, determined by the whims of
foreign bondholders and by the agilty of buisness leaders in using tax
havens to pay less. . . .
<dd>++++++++++++++++ . . . Good point on tax competition, less so on bondholders. Surely the main thing we've learnt from the last few crises is that bondholders don't really exercise any control at all? . . . </dd>++++++++++++++++++++
mbs: "Lost control" is a bit of an overstatement. Tax revenues/GDP stopped growing in the 1980's but they have not declined. There was some shifting away from capital taxes, but this could have been due to politics rather than economic feasibility.
Taxing interest-bearing accounts and other financial assets is a big problem in Europe, [...]
++++++++++++++++++++++++
Oh yes, and how. ECOFIN meeting this week discussing that very topic, and
it will be bloody in extremis. The Germans don't like seeing all
their tax money disappearing in Luxembourgeois avoidance schemes,
while the Luxemburghers don't want to lose their banking industry
(which basically lives off German savings accounts).
Meanwhile the official line of Her Majesty's Treasury is that they can do
what they like, as long as they don't knacker the Eurobond market
(despite the name, this is nothing to do with the Euro and is
actually based in London). All because people don't like paying
withholding tax. Ah well ....
[I've got quite a lot of material on the European withholding tax wars, if
anyone ever wants any]
dd
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