Duly Noted: Tax Haven, Bulwark of Free Men
1. The approach sounds great. Take from the rich, give it to the poor. Fill the deficit-pit while doing so. The genially simple solution brings surprises. The initiators of such projects prefer to have them discussed in the abstract. These peddlers of snake medicine do not tell how much will be absorbed as a lubricant between the spongy cogs of the distributing bureaucracy. Approving citizens assume that they will be filed under “poor”. (Are we not all poorer or “non-richer” than we think that we deserve to be?) In practice, when the duped wake up as the bill is delivered, they discover that they are classified as “rich”. It is not good to be rich when it means, “plucked” and not “getting”.
2. Government programs designed to impose equality multiply. These might work in favor of groups held together by some common trait to which it (and outsiders) attributes significance. With the help of this emphasized and often fetishized characteristic, these associations are inclined to separate themselves from others. Being separate is defined as being artificially kept unequal to the extent that special protection and financing can be demanded. Separatism pays if the demand is met. If the trend toward the compartmentalization of societies continues, we will wind up as being equal only before the taxman. Exempted will only be those who will be able to demand that, in recognition of their collective personality, their exceptionality be acknowledged. For instance, by tax exemption and public support to maintain their uniqueness.
3. Prejudice comes in a large variety of wrappers. A fascinating mutation bears the label “we harbor no prejudice”. This happens to be the case when, for example, a past crime gets treated “tolerantly” (translation: with tacit approval) as sanctions might be a sign of intolerance. The idea is that anything less than the acceptance of the perpetrator, would reflect a prejudice (translation: disapproval out of principle) against a (preferably leftist) cause served with devotion. In such cases the proof of being devoid of prejudice is that, to the maximal extent, nothing is remembered -or at least not mentioned. Meanwhile, what is still recalled is not judged because the offender must have had a reason for doing what he had done. When this is the case, artificial ignorance, stewed in the denial of preferably ignored facts, is indulged in so as not to have to take what might turn out to be non-PC action.
A cute case that illustrates the foregoing –it is also the item that triggered this note – was a TV program. It presented the case of a woman who fell victim to a Romeo working for East German intelligence. The agent easily seduced the culprit, a so-so looking woman in the service of the US embassy. He then asked his “love”, who now disingenuously claims not to have noticed anything suspicious, for secret material from work. After the collapse of the “GDR” the pair got caught. At that point, the man revealed that what he did was not out of love but out of duty. Now the woman lives in lonely exile in Holland. (Is she prepared to do for Holland what she had done for Germany?) She complains about her reduced pension. Some people at home still look at her oddly. How cruel this is, after all, she deserves sympathy for having been cheated in love. Obviously, this person, and those who accept her story, have misplaced their moral compass. Reporters have more compassion and allow her to hide behind a PC concept, according to which our circumstances can make all of us guilty. This makes us all, regardless of what we might have done, innocent.
4. Is a recovering and rising Russia’s aim the restoration of her former imperial influence? This is the question that torments newly independent and neighboring countries. In the West of the Continent, the palliative idea is gaining acceptance that the artificially inflated fear of Russia had overstated the dangers her system before 1989. A similar prejudice exhibited by those who are influenced by their experience, correspondingly exaggerates her role and intention at present. Due to these opposed views rooted in divergent experiences with the “dictatorship of the proletariat”, the original Western and the new Eastern members of Nato find themselves at loggerheads. It is discomforting that old Europe is making it a proof of reasonableness that new members should forget everything their history had taught them. Regrettably, this dichotomy of perspectives involves the major purpose of the alliance.
5. Not remembering the past, or recalling it the way it has not been because the retouched version is soothing, is not entirely accidental. There is an officially accepted past of those that had not lived it – as in the case of the West that had escaped living under applied socialist theory. There is also a past kept distorted by those eastern and central European governing cabals whose continued rule requires amnesia. These re-writes of the past reflect political needs. In most of Eastern Europe and especially in Russia, the Stalinist past is to the highest possible extent a well-kept state secret. Archives have been shut because the current governors find their legitimacy in continuity with the old, therefore Stalinist, system. Therefore, discrediting Stalin and making holes in the “improved” record is more than depriving the desinformed of their opiate. Keeping the truth from leaking out is a precondition of retaining power. Maintaining the façade of fake facts implies the ability to command society in the pursuit of old and restorative goals.
It is not accidental that, mostly it is the high-tax countries that are exercised by bank secrecy/privacy. At a certain level of taxation, people respond by trying to avoid being plucked. This they do by either reducing their work or by taking their property, often seen as a nest egg for bad times, on dry land. The current fight against the “tax havens” is only the first round in a longer campaign. The goal is to standardize taxes internationally. That would mean the end of today’s “tax competition”. Efficiently governed communities can afford to have low taxation. This results in a competitive advantage. The low charge for “participating” in such systems induces skilled persons and capital to seek their advantage there. Uniform taxes would end this competition and cancel the free choice related to it. It would also end the embarrassment caused when the educated – skills represent invested capital! – and savings depart to settle where more favorable terms are offered. Here is the explanation for the attacks of P. Steinbrück (Germany’s Mr. Tax) on Switzerland. Not only the savings of many “little people”, but also tens of thousands of highly educated Germans move to the German-speaking neighbor. The motive is not clean Alpine air – Bavaria, brewing better beer, has plenty of that. Much rather they want “less state” in their lives and in their pockets. In short, they seek better terms to enjoy that portion of the fruits of their labor that they deem to be an appropriate expression of their input.
(The above had been written before the G-20 met in London. Following an impulse to understate, the gathering concluded that it had saved the world. Besides a French-German sponsored victory for regulation, the only concrete item in the final statement expressed the summiteers’ smallest common denominator. It is a white list, a grey list and a black list of tax havens. The classification represents the interests of the participants. So, do not look for Jersey or Delaware on the darker lists.)
Saturday, 4 April 2009
From the desk of George Handlery on Sat, 2009-04-04 09:36
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