Austrian Times RSS FeedsLike the Austrian Times Facebook page!Follow us on Twitter!


Events for December
M T W T F S S
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31 1 2 3 4
Add your event FREE

Today

Videos


BurgKino

Pub Quiz everyTuesday at Johnny's Pub

Popular in Austria


Cosmo&Nanu
Austrian Times Blog

no picture available

Clem Chambers - Impact of super taxes

Super taxes on the West's wealthiest may destroy recovery from the Euro-crisis, writes Clem Chambers, the CEO of global investors' site ADVFN.com and author of the Amazon best-seller, ‘101 Ways to Pick Stock Market Winners’.

If a government doesn’t like something, it will tax it. Tobacco and CO2 emissions, for instance.

CO2 carbon taxes are clever because the tax that's collected can then be used to subsidise what we do want, which is sustainable energy.

So a tax on coal could become a subsidy on windmills, resulting in less coal and more wind power.

That’s the symmetry of the idea.

The flip-side is a government subsidises what it wants more of.

If you want more sugar, you subsidise farmers to grow more sugar. If the subsidies are large enough pretty soon you get a sugar mountain.

Europe was the master of farming subsidies and created many a mountain of food by subsidising its production.

In Austria, one such initiative is the Alpine Farming subsidy, paid to farmers not to harvest crops in mountainous areas to encourage bio-diversity – a scheme making headlines currently due to the EU's refusal to pay many farmers, after a few were caught farming the remote lands anyway.

It’s a simple dynamic and universal economic tool - tax what you want less of, subsidise what you want more of. You can have more butter and more art whilst reducing CO2 emissions and tobacco-related deaths.

It's up to each government to apply the correct incentive or disincentive and fund accordingly.

Yet here in the West we now find ourselves in an awkward bind. There is not enough money to fund governments.

According to those in power (on both sides of the Atlantic) one of the keys to the solution is to tax the rich, whilst continuing to subsidise the poor. Meanwhile, governments are struggling, nowhere near to balancing budgets.

Recovery remains out of sight.

President Hollande’s new 75% tax regime on France's wealthy citizens is most likely the beginning of a new wave in the West. It's an attempt to continue to subsidise the poor at current levels whilst punishing the wealthy at levels tantamount to confiscation.

Confiscation of gains, when they are considered above the socially acceptable level is, of course, nothing new. Even within the last 50 years or so it was common practice.

The 70s were packed out with 'super-taxes' and the wealth destructions they inflicted on Europe were colossal and poorly remembered. Confiscation has never been good tax policy. If a person smart enough to make such money can’t flee or avoid confiscation, they simply stop bothering. Who would blame them?
The sad thing is, the West has seen this all before. It signals there is still a further road of dislocation and recession ahead.

Unless Europe plans to erect barriers to exit, those most capable of rebuilding the developed world’s economies will simply head to Asia, where the barriers and penalties of success are so much lower.

The question governments need to ask is, do they want a shot at recovery and the return of the good times of the last 20 years? Or do they want to slog into a brave new world of a global realignment where the old 'West' seems as ossified and archaic as the Eastern bloc was before the fall of its bloated, all-consuming and outmoded state system.

It is a choice : either celebrate success or tax it into oblivion. If you subsidise equality and tax overachievement, essentially forbidding individuals to excel, then the median result is a sullen and grey, an environment which still lingers in countries like Russia today.

The West is not yet doing the equivalent of subsidising vodka, but at this rate, that day may come.

- By Clem Chambers. Clem Chambers is CEO of leading investment site ADVFN.com and author of Amazon best-selling investment guides ‘101 Ways to Pick Stock Market Winners’ and ‘A Beginner’s Guide to Value Investing’ and the new financial thriller, ‘The First Horseman’.

~Visit www.ADVFN.com for free, real-time stock prices
~ Clem’s latest news and articles at www.clemchambers.com
~Follow Clem on Twitter: @ClemChambers

Austrian Times


Are you on Facebook? Like the Austrian Times on Facebook and win great prizes!


Cosmo and Nanu
ORF Watch

Tag cloud:
subsidising  farmers  taxes  lsquo  investment  mountain  incentive  government  subsidise  Clem  subsidy  farming  ADVFN  Chambers  rsquo  whilst  Europe  sugar  confiscation  recovery

Latest News

 

Ebola's deadly reach impacts Vienna student
Austria has yet to record its first case of Ebola, but the feared virus has already had a severe impact on the lives of Africans living in Vienna.

Grigorij Sokolov Works His Magic At Vienna Konzerthaus
Whilst the world-famous Wizard of Oz played at the Volksoper, there was another Wizard in the Konzerthaus giving his 16th performance in Vienna!

Penelope Cruz To Play The Ice Cream Killer
The memoirs of the woman dubbed the Ice Cream Killer after she shot dead two ex-lovers before hacking the bodies up with a chainsaw and telling neighbours the noise was a new ice cream machine are due to be turned into a blockbuster with Penelope Cruz playing the lead role.

Kid Left In Coma After Beaten By Teacher For Talking
This is the shocking image of a little Chinese girl before and after she was punished by her teacher - for talking in class.

Freezing Rain Causes Chaos In Central Europe
Freezing weather has arrived in Europe with a vengeance with a layer of ice blanketing parts of Austria, Germany and the Czech Republic and causing traffic chaos.

Holey Smoke As Car Disappears Down Sinkhole
Motorist Wei Hsiao found himself in a hole lot of trouble in China when a giant sinkhole opened up on the road beneath him, swallowing his entire car.

Shock Moment Police Helicopter Explodes On Street
This is the moment a police helicopter exploded into a spinning ball of flame in Chile when a fire truck clipped one of its rotors.

More Than Twenty 100,000 GBP Motors Used In Bridal Convoy
A Chinese couple who wanted to have the most expensive wedding convoy possible arranged for a convoy of top of the range cars including a stretch Hummer followed by Lamborghinis, Porsches and other VIP motors.

Riot Police Star In Downs Syndrome Calendar
Spanish riot police have joined forces with Down's syndrome kids to take part in a special calendar for charity.

Chinese Nuclear Winter Smog Leaves Clinics Full
Fresh proof of Chinese scientists' claims that the country's toxic air pollution resembles a nuclear winter are shown by these images that show clinics and hospitals packed with patients suffering with trouble breathing.

 


Mala Vrata

The most popular stories –
last 7 days



Don't moan alone, the Ombudsman Investigates.

Why suffer in silence. Let off steam by letting our readers share your troubles. File your complaints about anything and everything here.

Our ombudsman David Rogers will try and help solve some of the problems from lazy civil servants through to incompetent companies – and at the very least the worst transgressors will end up in our weekly special report.


Austrian Zimmers