Tom Lehman
DANIEL.DAVIES at flemings.com wrote:
> 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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