TAX, SOCIETY & CULTURE

Follow me on Twitter:

In Slovakia, Real Lottery Prize Goes to Tax Man

Published Apr 22, 2014 - Follow author Allison Christians: - Permalink

This is a novel idea, at least, new to me:

Over the last 10 years, Slovakia’s revenue from value-added taxes, a type of sales tax, has declined. But hiring auditors and pursuing individual merchants and service providers in court is expensive and slow. So last fall, the government decided to put a lottery in the mix.
The idea is to enlist average citizens to collect receipts from their purchases and register them with the government, creating a paper trail for transactions and forcing restaurant and shop owners to pay the sales taxes they owe. As Slovakians register their receipts for the lottery, a computer will also tell them if a merchant has issued a receipt with a fake tax identification number, so they can report suspected fraud. 
For any purchase worth more than 1 euro, or about $1.38, Slovakians can enter their receipts in a monthly lottery to win €10,000, a car or a chance to be a contestant on the Slovakian version of “The Price Is Right.” 
Tax officials say the lottery is already having a big impact, and other European countries that are also struggling with the collection of value-added taxes have considered it — including Portugal, which started its own tax lottery on Thursday. In Slovakia, about 450,000 people have taken part, registering about 60 million receipts, officials said. 
As we well know, third party reporting is an excellent way to induce honesty in taxpayers. Winning a lottery is a long shot but its very existence promotes a certain culture to develop around the reporting of taxable sales. And the winners make for good tv.


Tagged as: tax culture tax policy

COMMENTS

Share:

Are multinational companies a public good? If not, why are taxpayers subsidizing their global marketing strategies?

Published Apr 21, 2013 - Follow author Allison Christians: - Permalink

The story is that the Canadian government recently set up food trucks in Mexico in order to promote "Canadian cuisine," which the National Post pictures as follows:


Above: poutine. Below: tourtière, both from Quebec.
(the article says only QC has any sort of cultural food identity. Sorry BC!)
  
These national icons are being served from this truck:

Don't judge this book by its cover.
So, the Canadian government has gone to Mexico with a van decorated with fresh fruits...to sell gravy-and-cheese-slathered french fries and meat pie.

To be sure I'm not against either of these foods in principle (so long as the latter is served with maple syrup) and I'm not against Canadians...whether individual or corporate..setting up shop in Mexico to sell the hapless public yet more creative combinations of salt-sugar-fat. (Neither would I be opposed to Mexico imposing Pigouvian taxes on this activity, to compensate for the costly externalities visited upon the public health.)

But I very much object to taxpayers subsidizing the venture. I get that all countries try to promote their culture and in the process increase exports of their goods & services (or is it really the other way around). But as industrial policy goes, this has to be the bottom of the barrel.  If McCain Foods Inc cannot get the word out about its wonderful french fries, I simply cannot see how it becomes the  public's responsibility to provide it with free advertising. 

Last week we learned that corporate tax expenditures more or less equal corporate tax revenues raised in the US.  I haven't seen similar number crunching for Canada (working on it), but I expect for multinationals at least the story is very similar. If you then add these straight up subsidies, are we getting to a place where multinationals constitute a net drag on the fisc? If yes then we should be asking ourselves: when did we decide that multinational corporations are a public good that must be financially supported by other taxpayers? 

Is there anyone out there still clinging to the sense that a free market economy must mean something other than government subsidies for favored industries?

Tagged as: Canada culture globalization MNCs tax policy

COMMENTS

Share:

International Law and Language Policy

Published Jan 02, 2013 - Follow author Allison Christians: - Permalink

Here is an interesting new book, by Jacqueline Mowbray: Linguistic Justice: International Law and Language Policy (Oxford 2012).  From the abstract:

Globalization and migration are producing societies of increasing linguistic diversity. At the same time, English is achieving unprecedented global dominance, smaller languages are becoming 'extinct' at an alarming rate, and ethnic tensions in countries from Belgium to Tibet continue to centre on questions of language. Against this background, the issue of how to ensure justice between speakers of different languages becomes a pressing social concern. Matters of 'linguistic justice' are therefore drawing increasing scholarly attention across a range of disciplines. 
How does international law contribute to linguistic justice? This book explores that question by conducting a comprehensive, interdisciplinary examination of international law on language ... the book explores the conceptual framework which underpins international law on language, unearthing underlying assumptions and ideas about what constitutes a 'just' language policy from a legal perspective. ..
This explores an interesting aspect of international society and culture.  More at the link.  

Tagged as: culture international law scholarship

COMMENTS

Share:

Conversation on the Sources of International Law

Published Dec 12, 2012 - Follow author Allison Christians: - Permalink

An interesting dialogue is taking place over at EJIL over Jean d'Aspremont's book, Formalism and the Sources of International Law: A Theory of the Ascertainment of Legal RulesPhilip Allott posted today, and he says the book
evokes subliminally two recurring nightmares – one social, one intellectual. Socially, it reminds us of the failure of law to secure its proper place in international society. Intellectually, it reminds us of the part played by the modern university in the disempowering of the human mind.
Wow. His subsequent comments are lengthy but well worth the read. He begins by talking about the academic research & writing exercise, which produces an "industrial-scale intellectual effort" in sorting and analyzing competing views, all "while, the wicked world goes on its merry way to ruin." Allott asks that toughest of all question for the academic writer: 
Why would anyone choose to write creatively and intelligently about the philosophy of International Law? They are unlikely to be heard by those who exercise international public power – politicians, diplomats, civil servants, intergovernmental officials, international judges and arbitrators, legal practitioners – the international ruling class, a self-satisfied and self-regarding conspiracy, many of whose members have the crudest ideas about the nature of law, and many of whose members relentlessly abuse public power, national and international.
He answers the question in power terms and concludes that "more or less sophisticated ideas only escape haphazardly and fortuitously [from universities] into the outside world where, if they are not appropriated by public power or mass culture, they wither and die."

That is a depressing but true reflection of reality, I am afraid. In any event, read the whole thing to get his reaction to more of the substance of the book.




Tagged as: international law scholarship

COMMENTS

Share:

Is the Hobbit a Public Good? If no, why am I paying for it with taxpayer $$?

Published Dec 12, 2012 - Follow author Allison Christians: - Permalink

Hard on the heels of the story about why states are broke comes another example in the ongoing parade of horribles that is the global film tax incentive race to the bottom. Is the Hobbit a public good? If not, it's hard to understand why New Zealand gave its producers $120 million and changed its labor laws to prevent collective-bargaining, among other moves designed to keep production in New Zealand. This is a film that is expected to generate $3 billion in proceeds: they obviously don't require subsidies or labor suppression efforts in order to turn a profit. 

How many steps lie between the denial of labor rights in New Zealand to the appalling conditions and loss of life in Bangladesh? Not many. And why should a state ever be involved in driving its people down that road to serfdom?

Joe Karagnis has an account of the subsidies and legal reforms: To save regular earth, kill Hobbit subsidies. He says:
Film money is the hottest of hot investment money, fast in and fast out. Production is very mobile, and studios have become adept at extracting subsidies from governments for a few trinkets and promises of jobs.
Translation: film production acts just like capital. Countries (and states) compete for it, and it flows to the most welcome jurisdiction. That probably means tax incentives though there are lots of reasons to believe tax incentives aren't enough--investors need rule of law, good physical and financial infrastructure, competent workforce, etc. Really, what companies want is:
  • a highly educated workforce
  • that can't organize or demand high wages
  • a well organized legal system that protects contracts and property rights
  • but only (or mainly) of multinationals
  • a well-organized financial system that protects the investment from currency/inflationary etc pressures
  • but only if multinationals don't have to support it with taxes
Karagnis demonstrates the global spread of the problem: 
in the US ... state and local subsidies rocketed from US$2m in 2003 to about US$1.5b in 2012. Film subsidies are epidemic in Europe, where countries compete to attract and retain productions. And it has been a major part of New Zealand's cultural and industrial policy, where more than US$400m has been invested in The Lord of the Rings, Avatar and a handful of other productions over the past decade. 
But competitive subsidies are the quintessential sucker's game, in which winning is losing.
And a part of the story I just don't get at all:
For keeping Warner Bros happy, Prime Minister John Key - a former Merrill Lynch currency trader - got a replica magic Hobbit sword from President Obama...
This is puzzling and ridiculous (not to mention kind of embarrassing on both sides). The race to the bottom in film incentives is just another form of offshoring. Of course, it spreads US culture which is apparently viewed by someone that matters as the more important objective. My view: it is well past time for a little austerity for the film industry.

Tagged as: austerity culture exports film tax incentives lobbying

COMMENTS

Share:

Add Starbucks, eBay and IKEA to the tax dodger ledger

Published Oct 25, 2012 - Follow author Allison Christians: - Permalink

When the list gets too long to count, will we finally come to see that tax dodging is in the fabric of the income tax as practiced by most countries today?  It is structured, systemic, and by design, not a loophole, not a bug.  It is the dominant culture.  Probably it is destroying the income tax for all intents and purposes.


Tagged as: tax culture tax policy

COMMENTS

Share:

Dutch people must pay to throw it away

Published Sep 17, 2012 - Follow author Allison Christians: - Permalink

MR reports:
The Netherlands is rolling out some 6,000 smart garbage cans that can only be used when residents scan an RFID-enabled ID card.  Besides monitoring just how much trash someone disposes of, the cans will also measure and charge the user based on how much refuse they tossed.
Tyler Cowan responds: "I don't think this will do much to encourage littering or illegal garbage disposal.  It may encourage the purchase of less packaging and waste."  But why would this kind of tax not encourage avoidance and even evasion?  Is this a culture argument?



Tagged as: economics tax culture tax policy

COMMENTS

Share:

Welcome to Adam Rosenzweig

Published Aug 09, 2012 - Follow author Allison Christians: - Permalink

I'd like to welcome Adam Rosenzweig, Wash. U. Professor of Law, as a new contributor to the Tax, Society & Culture blog.  We don't always agree on everything tax, society, or culture, but I always enjoy his perspective and look forward to his participation here.

Tagged as: untagged

COMMENTS

Share:

The private sector really is doing ok, or, why workers collaborate in their own self-destruction

Published Jun 27, 2012 - Follow author Allison Christians: - Permalink

If by private sector you mean US corporations, which are making more profit than ever:

From Business Insider.  But not if by private sector you mean wage earners.  As we know median wages have plunged in the US; this article shows that in addition wages as a percentage of GDP are at an all-time low:




The author comments that "[o]ne reason companies are so profitable is that they're paying employees less than they ever have as a share of GDP. And that, in turn, is one reason the economy is so weak: Those "wages" are other companies' revenue."


The juxtaposition thus paints a zero-sum picture: that as wages fall, corporate profits rise.  We've seen other charts that show corporations and managers claiming most or all productivity gains over the last several decades at least.

Richard Murphy responds: "the reason why we have a crisis is that the wealthiest and companies got too rich whilst most got left behind so the wealthiest and companies lent the rest of us their excess wealth through debt arrangements which people could not repay."

Now consider Yves Smith's post today in response to sociologist Claude Fischer, who asks "Why Don't Americans Take Vacations?" and answers with rugged individualism and something about the American way.  Nonsense, says Yves, the right answer is, because of a systemic and steady diet of anti-labor propaganda.  Yves points us to a related article of interest by Mark Ames from 2006, "We're not going on a summer holiday," which says:
vacation time has been slowly disappearing for American workers ever since the Reagan Revolution, which ushered in a violent shift in corporate culture away from the paternalistic post-New Deal model towards the current stock-price-is-God model. According to Harvard economist Juliet Schor, in the 30 years before Reagan's presidency American workers were getting more and more vacation time; however, in the 1980s, that trend suddenly reversed. By the time Reagan left office, Americans got three and a half fewer days off per year, on average.
Ames says at the same time corporate managers have vastly increased their leisure time and pursuits.  A glance at the FT's How to Spend It can certainly confirm the market for vacation by the ultra-rich.  For Ames the most amazing aspect is that
the designated victims in this drama - America's workers - are such willing collaborators in their own existential demise.
...according to a New York Times article, British workers get more than 50% more paid holiday per year than Americans, while the French and Italians get almost twice what the Americans get. The average American's response is neither admiration nor envy, but rather a kind of sick pride in their own wretchedness, combined with righteous contempt for their European worker counterparts, whom most Americans see as morally degenerate precisely because they have more leisure time, more job security, health benefits and other advantages. 
We have seen a related version of this in the public outrage ginned up over the "generous" health and pension packages of public sector employees that has allowed conservative governors to eviscerate worker's benefits and their rights in the process--c.f. Wisconsin.   A constant stream of propaganda tells us that public sector workers must be stripped of their many unearned and undeserved benefits.  There is no equally powerful alternative stream of propaganda demanding better health and pension benefits for all workers.   There is no alternative stream painting a picture of life as an American worker when wages stabilise to global median levels.  The result seems to perfectly illustrate Ames' willing collaboration in self-destruction.


Tagged as: inequality institutions political malfunction psychology rhetoric social contract u.s.

COMMENTS

Share:

Lobbying disguised as cultural exchange

Published May 18, 2012 - Follow author Allison Christians: - Permalink

For members of congress, "participation in officially-connected travel that is in any way planned, organized, requested, or arranged by a lobbyist is prohibited."  Yet here is a long and detailed Pro Publica story on extensive violations of this rule.   They have incriminating email and other records showing a cycle of money and influence in lobbyist efforts to increase congress members' attention to issues involving Taiwan.  The quid pro quo between foreign governments and U.S. officials was initially disguised as a cultural exchange under the Mutual Educational and Cultural Exchange Act (MECEA):
Once a program is approved — Taiwan's was OK'd in 2006 — members of Congress can take a qualifying trip paid by that government.
But Owens' trip was not paid under MECEA, which strictly applies to programs funded by foreign governments.  Instead, a private entity — the Chinese Culture University — was brought in to pay for it. Spouses and other family members are not allowed to go on MECEA trips, and Owens' wife was to accompany him, emails show.
...Why was the school paying for the trip? In a filing with the House Ethics Committee, the school explained: "The Chinese Culture University aims to promote international cultural exchanges in order for it to thrive in a world increasingly engineered by an irresistible thrust towards globalization."
...The congressman doesn't appear to have voted on any Taiwan issues since he returned in January. In July, just before the trip planning got under way, Park Strategies' King asked Boughtin to have the congressman sign a letter supporting [an] F-16 sale to Taiwan. 
Boughtin emailed him back: "[W]e're on board. All set!" 
Owens' spokesman said the Taiwan letter and the trip were unrelated. Nearly 200 other lawmakers also signed the letter.
Much more at the link. 

Tagged as: lobbying u.s.

COMMENTS

Share: