Looking in our mirror to see Europe: Taxes, withheld information, and confiscated assets: "
I’ve heard often that a drowning person submerges for a third time, never to rise again. I take from that bit of alleged fact that life oddly enough follows the rules of baseball: You’re allowed to stay after two strikes, but the 3d is your last.
There’s little need to recount Europe’s financial woes grounded in their decades-long tryst with progressive, nuanced socialism. Their intellectual superiority over the rest of mankind has also given them the inside track on understanding the claim that “the world will be lost if we don’t act on climate change within the next 14 days!” That was several months ago; I guess we’re screwed. I always found that claim to be particularly arrogant, yet overflowing with joviality. I pictured a 6-year old coming home from teacher-union controlled public school to explain the water-depriving dangers of flushing the toilet after each tinkle, only to be thereafter faced with a lingering smell of urine and fecal matter in my home. Unfortunately, some of those 6-year olds grow up, go to work for various UN agencies and NGOs, and issue reports about disappearing glaciers based upon a trans-positional error when transcribing some hiker’s anecdotal notes. To further compound the problem, that now-30-year-old-stuck-on-6 “researcher” has his report pimped by a similar 30-year-old-stuck-on-6 “reporter.” Alas, modern-day Europe is full of them. And the fragrance surrounding their actions suggests that still believe their grammar-school union-humping skank admonisher.
Reviewing the news this morning, I found a fresh set of three strikes for Europe. How quaint. But don’t discount them too quickly as merely the problems from the other side of the pond: With Obama, Kerry, Biden, and various other progressives in our midst, Europe will continue to alter the reflection we see when we look in the mirror.
The first strike is their VAT. They tax everything at every stage of “value added.” Think of it as a national sales tax that includes resale. Our sales tax is, first, state-based, and, second, only assessed at the final transaction to the end user. As I sit in Pennsylvania, I pay 6% sales tax on all transactions not meant for resale, with the additional exclusion of certain “necessities” (food, clothing). Imagine the economy-chilling effect of raising that tax from 6% to 20% … ouch. Those additional 14 points going to the government would decrease my net disposable income substantially. Further imagine that the tax reached backward to producers of the goods I bought. While the assessment is rather complicated (it is, after all, Europe), there is no escaping that the monies available to produce and purchase goods is reduced by the taxes assessed.
The current 20% rate just went into effect today. It represents over a 14% increase from the previous rate of 17.5%. Sounds bad year over year, eh? Try this on for size: It was raised a similar 2.5 points in January 2010. So in the span of 13 months, from December 2009 to January 2011, the VAT has increase 33%, from 15% to 20%. Humorously, the linked article informs us that the government needs the money but that it could spark a double-dip recession. Where I grew up, folks were fond of saying about such situations that “there’s only so much meat on a pig.”
Strike #2 is grounded in Hungary’s quest for private retirement funds. The monies are going to be taken by the government. It’s not as broad a sweep as one might first envision, but the very concept is chilling. And, remember, we’ve heard the same issue rumored in progressive circles here in the US.
The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). In this extortionate way, the government wants to gain control over $14bn of individual retirement savings.
A better understanding traces back to this WSJ article, which explains the pension system and which portion the government is confiscating.
How far away from such moves is the United States? Remember that we have a mixture of pension funds sitting out there, including purely private and purely government. The latter funds are sequestered. Let’s see … I could start by borrowing against those revenues (don’t confuse the issue by calling them “public-pension fund contributions.” It’s money coming in, ergo, “revenues”). I could then drop that thin veil by taking the money directly and issuing IOUs (can anyone say, “Hey, isn’t that how Social Security works?”). We are not as far away from the initial steps of pension-fund confiscation as many of us would like to believe. At least the Europeans have the honesty to just do it in the open.
The 3d strike makes me laugh. The British government sat on – hid – kept from the public the weather forecast detailing the epic cold about to hit. I can understand the VAT bit … hey, maybe, despite all the evidence to the contrary, Keynes was right and the economy will hum along nicely. I know, they tell us that the new VAT revenue is for money already budgeted, but any new money prompts new spending. And new government spending, um, prompts economic growth. It could happen. And maybe the pension-fund theft will work out: Lots of people could die young. But the weather? Brothers and sisters, if the fricking untainted science says a prevailing northwest wind sustained at 40 knots will hit in the morning, then tie down the garbage cans tonight.
The Brits withheld the weather forecast that told of a deep freeze! People should hang for stuff like that. Why did they? Ah, one can only speculate as we look upon the vast moral vacuum that are Warmists occupying the seats of government and press in our former occupying country. ”The … the … the weather might not happen! Our CO2 concentrations could lessen the gravitational footprint of Earth in space, thereby drawing us closer to the Sun! It would be warmer! It could happen!” Um, no, it couldn’t. Someone get a Bible and a rope, and dispense of this fool from my presence.
So with the New Year comes a fresh three strikes for Europe. Are we really that far behind?
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