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


Events for October
M T W T F S S
29 30 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
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:
mountain  rsquo  Europe  farmers  confiscation  government  lsquo  Clem  taxes  whilst  farming  ADVFN  incentive  recovery  sugar  subsidise  investment  subsidising  subsidy  Chambers

Latest News

 

MEP caught In Brit papers Fraud Probe Jailed
A corrupt MEP caught by a British newspaper offering to propose amendments to EU laws in exchange for 100,000 euros a year has been given a three-year-jail term.

Vienna Jihad Girls Want To Come Home
The two Austrian teenage girls who became ‘poster girls’ for the jihad in Syria are now desperate to come home after getting completely disillusioned with their new lifestyles.

Mega-Station Opens
There was a festival atmosphere as Bundespresident Heinz Fischer opened Vienna's new Hauptbahnhof Friday morning.

Apple Truck Causes Traffic Jam
When 24 tonnes of apples are catapulted across a road it can only mean a jam.

Farmer Cleared Over Wolf Shooting
Furious animal rights campaigners have accused an Austrian farmer of lying after he shot dead a wolf that he claimed he thought was a fox.

Rare Bald Ibis Makes Microlight Flight To Italy
The project to introduce an extinct bird back to Europe is hailing success after successfully negotiating a new route over the Alps and training 14 Northern Bald Ibises how to fly south to winter feeding grounds in southern Tuscany.

Pat On The Back From Manure Explosive
A traffic cop in Austria got more than he bargained for after a booby trap covered him head-to-toe in manure as he was trying to catch people speeding.

Viennese Jihad Girl May Have Been Killed
Austrian police say that one of the two attractive young teenage girls who fled the country to go to Syria to fight on the side of Islamic rebels may have been killed.

Perversion of a Medical Dream
The Decline and Fall of the Otto Wagner Hospital, Vienna.

Fat Can Be Used To Burn Off Weight After New Patent Unveiled
It is being hailed as a sensation after scientists at an Austrian university patented a method that transforms fat storing cells into mini factories capable of actually destroying fat by burning it off.

 


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