If there really is a calamity waiting for us on December 21 this year, as the Maya calendar believers claim, that would probably be a tax calamity. Spendoholic politicians everywhere seem to be totally determined to keep spending our money, and to squeeze every drop of tax blood they can out of us.
Let’s start in France, where earlier this year the socialists gained total control over government, from presidency to national parliament. They are now delivering on one of their election promises:
President Francois Hollande’s Socialist government unveiled sharp tax hikes on business and the rich on Friday in a 2013 budget aimed at showing France has the fiscal rigor to remain at the core of the euro zone. The package will recoup 30 billion euros ($39 billion) for the public purse with a goal of narrowing the deficit to 3.0 percent of national output next year from 4.5 percent this year – France’s toughest single belt-tightening in 30 years.
Just to be clear what Reuters is reporting: the government is taking away more money from the private sector but they are not increasing spending by a single euro. This means that the government is reducing activity in the economy by 1.5 percent of GDP.
Good old Keynesian multiplier theory can give us a pretty good idea of what this means in terms of lost jobs and an accelerated recession. A very preliminary estimate says this will immediately cause a two-percent drop in private consumption. This in turn could cause a loss of up to 300,000 jobs in the French economy.
That is 300,000 fewer taxpayers and 300,000 more welfare recipients. And we have not even counted the loss of jobs when small business owners and other high income earners flee France to get away from the new 75-percent top marginal income tax rate.
Reuters echoes these worries about a looming macroeconomic disaster and hints that more austerity is on its way in Paris:
But with record unemployment and a barrage of data pointing to economic stagnation, there are fears the deficit target will slip as France falls short of the modest 0.8 percent economic growth rate on which it is banking for next year. The budget disappointed pro-reform lobbyists by merely freezing France’s high public spending rather than daring to attack ministerial budgets as Spain did this week as it battles to avoid the conditions of an international bailout.
Of course, the French socialists are delusional:
“This is a fighting budget to get the country back on the rails,” Prime Minister Jean-Marc Ayrault said, adding that the 0.8 percent growth target was “realistic and ambitious”. “It is a budget which aims to bring back confidence and to break this spiral of debt that gets bigger and bigger.”
The new French tax hikes come on top of the ones already in effect or on their way in Greece, Spain and Portugal. But it is not just in Europe that they are talking higher taxes. This blog has warned about tax hikes here in the United States, of which Taxmaggedon certainly is the worst. But the hunger for more tax revenues does not even stop there. A report from Fox News reveals that the United Nations is back in the tax game, pushing hard for new global taxes:
A 1 percent tax on billionaires around the world. A tax on all currency trading in the U.S. dollar, the euro, the Japanese yen and the British pound sterling. Another “tiny” tax on all financial transactions, including stock and bond trading, and trading in financial derivatives. New taxes on carbon emissions and on airline tickets. A royalty on all undersea mineral resources extracted more than 100 miles offshore of any nation’s territory. The United Nations is at it again: finding new and “innovative” ways to create global taxes that would transfer hundreds of billions, and even trillions, of dollars from the rich nations of the world — especially the U.S. — to poorer ones, in line with U.N.-directed economic, social and environmental development.
And all this new money would, of course, be handled by unelected globocrats in the United Nations. Their goal is to build a global welfare state, where the same government policies that have failed to eradicate poverty in Europe, North America and other countries that have tried it, are now supposed to be applied on a global scale.
The Center for Freedom and Prosperity in Washington, DC – one of America’s foremost think tanks – explains what is truly behind this global tax grab:
Statists have always advocated for high taxes as a matter of “fairness,” but what we’re seeing today is a constant moving of the goalposts, redefining the idea of fairness to encompass ever higher taxes and ever more government spending. This is a convenient rhetorical tool, as once a public is sold the emotional argument of growing government for ostensible reasons of fairness, they don’t need to be re-convinced after each successive expansion of the state. There’s always more “unfairness” in the world to solve, and thus always more need for government. A typical example of this approach can be seen in a recently released report by TJN, titled “The Price of Offshore Revisited,” which portrays all cross-border financial activity as illegitimate and untaxed. If you bank offshore, it must be to avoid taxes or to hide income, according to the reports authors. Using this self-serving assumption of the illegitimacy and untaxed nature of every dollar invested overseas in so-called tax havens – referred to as “pirate banking” – the report breathlessly estimates at least $21 trillion in “missing” dollars that needs to be “put to use.” You read that correctly. They believe that money belongs first to government and that money in the productive sector of the economy is not being “put to use.” Rather, some government bureaucrat could better allocate resources than private individuals, entrepreneurs, investors and businesses. As shocking as this argument is, they make little effort to hide it. At a recent event titled, “United States: A Tax Haven,” and sponsored by New Rules for Global Finance, the Heinrich Böll Foundation and the FACT Coalition, an entire panel of anti-tax competition forces openly discussed the supposedly dire need to get more money into the hands of politicians and bureaucrats, and made it clear that they see eliminating tax competition and financial privacy as a key way to do it.
It is time to form a global coalition for the advancement of economic freedom.