Even those of you out there that are sick and tired of the doom prognosticators and gold bugs, you must admit that they have lots of examples to back them up. In an incredible sign of weakness, the countries of the G-8 summit took out a chunk of time to see how they can collude with each other to squeeze more taxes out of corporations. While plenty of this brand of whining has been going on in the U.S., Britain seems obsessed like no other country:
British lawmakers have sharply criticized Google, Starbucks and other U.S. multinationals operating in Britain for exploiting tax rules by registering their profits in neighboring countries such as Ireland, which charges half the rate of corporate tax, or paying no tax at all by employing offshore shell companies.
This is, of course, typical behavior of politicians everywhere. And it has the added benefit of being a two-for-one deal. First, blame your problems (any or all) on a group of people that no one is too fond of. After all, who doesn’t want these large companies to “pay their fair share”. And the fact that they are not prevents the government from fill-in-the-blank, be it feeding the children, paying down the national debt, etc. The second step is even better from a politicians viewpoint. Accuse the that same group of something nefarious that is causing them to short change the people. In this case it is almost always referred to as “tax-dodging”. Perfect. Now run it all together and it comes out something like; our debt problem wouldn’t even be a problem if those greedy corporations just paid their taxes like everyone else, but instead they are playing the tax-dodging game and shafting the great people of our country.
The pesky facts are mercilessly unneeded in declarations such as that. And, awesomely delicious in their view, is that while none of the case against the corporations is actually, technically…you know…true, it’s also, not flatly false either. Because while not paying their “fair share” and “tax-dodging” may or may not be an accurate assessment, the words are slippery enough that politicians are attracted to them like bugs to a light. And most of all (and best of all) is that it cleverly hides the fact that the country’s own laws are what caused the corporations to “tax-dodge” in the first place. There is purposely no accusation of law breaking, just very sketchy, untrustworthy behavior.
Ok, ok, so just typical politicians trying to distract from their own policy failures — what else is new? Very true, but to waste even five seconds on a G-8 Summit on something so petty, so insignificant and ultimately futile is a worrying sign. After all, let’s say that all of the countries get their wish and Google, for example pays their supposed “fair share” in every country they do business in. Is that really going to put a dent in their problems? Of course not and there would be additional “unintended” consequences if it were to happen as well. And perhaps most disturbing of all is that they know it.
So what is motivating all of these countries to band together to wipe out “tax-dodgers”? Well, with Europe doing even worse than the U.S these last five years, with debt rising and growth non existent, there are more and more signs of decay. There seems to be a barely disguised panic in every pronouncement out of the EU lately, with no plausible ideas left to try. Unfortunately, yet expectedly this gang up on “tax-dodging” seems to fit that very same panic like a glove. One more argument in the bag for the gold bugs to point to, I guess.