Showing posts with label Europe. Show all posts
Showing posts with label Europe. Show all posts

Sunday, March 05, 2023

Marvel at the Longevity

God and the Tree of Knowledge
Nasher Museum, Duke Univ
.
European cathedrals are distinguished for their craftsmanship and longevity; the component that is most remarkable, at least to your humble blogger, is the stained glass. Some pieces, like God and the Tree of Knowledge, date back nearly 800 years.

The resources needed to produce Medieval artwork were immense:
Stained glass was in great demand in the Middle Ages, and manufacturing it required large quantities of sand, wood ash and powdered metals melted at extremely high temperatures. According to one estimate, the European glass industry burned through roughly 13 million tons of firewood between 1250 and 1500...

From lumbering and harvesting to mining and quarrying, producing materials for medieval art demanded enormous amounts of manual labor, said [Pulitzer Foundation curator Heather Alexis] Smith. In the mid-1300s, the pandemic known as the Black Death killed an estimated 30-60% of the population of Western Europe, setting off decades of labor shortages...

Religious orders were perhaps the biggest drivers of environmental change in the medieval era. In sustaining their communities, monasteries often cleared forests and wetlands for farming, at times initiating large-scale building projects that required tons of quarried stone.
The greatest amount of medieval resources was used for religious purposes, and those monuments have lasted for hundreds of years.

Will our own expressions have such durability? It's doubtful, since utility is less powerful a motivator than the perceived demands of deities, and environmental constraints sap the life from invention.

Meanwhile, marvel at the stained glass.

Thursday, April 21, 2022

Reminiscing, with Receipts

Thornton Wilder himself played the minister
in a 1950 production of Our Town.
Thornton Wilder's Our Town was one of the first 20th Century plays that we read.

The language was not above our heads, but few seventh graders had a lived grasp of the theme: that life in all its moments, special and jejune, is not appreciated until it's over. But who can fault us; not quite teenagers, our eyes were looking forward, not back.

Speaking of looking back, the Pulitzer Prize-winning playwright kept meticulous tax records:
Like any conscientious taxpayer, Wilder carefully documented his tax-deductible business expenses. His returns from 1968 to 1972 include meticulous, multi-page accounts of his work-related travel and associated expenditures. Originally intended to justify tax write offs, today these records offer a unique perspective into Wilder’s writerly life at the twilight of his career...

Wilder explained [in an attachment to his tax returns] that living in a big city or near New York subjected him to constant harassment from “interviewers, photographers, enthusiasts, student delegations, visitors from Europe and Asia.”

“It is necessary that I remove myself,” he stated...
For Thornton Wilder 1968 was especially noteworthy for his (deductible) European travels to watch and work on plays that he adapted to the American theatre. He spent months in Martha's Vineyard recuperating from surgery, then returned to Paris in the fall.
His travel and hotel expenses for 1968 totaled $4,658.76, according to the tax documents, which is about $34,000 today adjusted for inflation.
Comments:

1) Thornton Wilder does look like an accountant in his college year book photo, doesn't he?

2) Yes, boys and girls, CPA's used to type the tax returns. (Look at the mis-aligned "X" in the middle photo.) Typing often took more time than filling out the draft in pencil.

3) To pre-empt possible questions, additional documents and/or explanatory notes such as Thornton Wilder's narrative descriptions were regularly attached to tax returns. Later this practice became impossible with some e-filing software.

Wednesday, March 02, 2022

A Resolve That No One Expected

Georgio Armani and co: you know it's serious because
none of the models are smiling (WSJ photo)
The war in Ukraine has resulted in a falling stock market, the skyrocketing price of oil, and fear of the big one: nuclear annihilation. But there is another catastrophe:

Russia’s Invasion of Ukraine Casts a Pall on Milan Fashion Week:
The disconnect between fashion and the “real world,” always a heated topic, felt particularly extreme on Thursday, when the invasion escalated and brands including Prada staged their fashion shows to audiences of editors and celebrities...

In a tweet last week that was later deleted, the European Union’s high representative and vice president, Josep Borrell Fontelles, appeared to refer to the rich Russians such sanctions would hit. He wrote, “No more: Shopping in Milano Partying in Saint Tropez Diamonds in Antwerp.”

For an industry that is mightily bolstered by the support and investment of Russian money, any sanctions are consequential. (Italy sells about $1.34 billion of luxury goods to Russia each year.)
The Russian oligarchs could not have imagined that they'd be locked out of Milan, St. Tropez, and Antwerp.

Europe has shown a resolve that no one expected.

Thursday, February 24, 2022

It Stinks

The late, great Chronicle columnist Herb Caen called yesterday's paper today's fishwrap.

Events have proved everything about last month's headline ("U.S., Russia Agree", "Talks", "Defuse") as odoriferous as Herb Caen's descriptor. Russia, brushing off threats of sanctions and ignoring the blandishments of diplomats, bombed cities and invaded Ukraine today.

Although I did not vote for him, we only have one President and I suppose we have to support him in whatever action he takes. It's going to be three long, long years.

Wednesday, September 22, 2021

Aloha and Mahalo, Mr. Harrington

(NY Post photo)
Al Harrington took his place behind the lectern. The year was 1966.

He had played football in high school and had returned as a football coach. My expectations were low; all coaches were expected to teach a course. I assumed that freshman European History was not his primary focus.

(Teaching wasn't the priority for my 8th-grade Biology teacher who was also a world-class surfer.)

I was wrong about Mr Harrington. He was fully prepared for his lectures, speaking authoritatively in a voice that seemed almost theatrically trained. He assigned homework from the text every night and got it back to us promptly, marked with bold flourishes.

But what I remember most clearly from those days was the passion with which he spoke, and how he emphasized the points that were important. His wasn't the cheap and easy kind of history teaching, where the students are inundated with dates and genealogical charts, but the one that explicated the forces behind the Renaissance and Reformation, and showed how Napoleon arose from the French Revolution.

As a senior I signed up for AP European History. It was a breeze, and so was the exam, thanks to the preparation from Mr. Harrington three years earlier

In 1972 Al Harrington's talent was recognized by the producers of the original Hawaii Five-O when he was signed to the role of Ben Kokua. His entertainment career took off, and we lost a great teacher.

He died yesterday of a stroke. RIP.

Below is Al Harrington speaking at Punahou School at the groundbreaking for a new sports facility in 1979



Below is the Star-Advertiser's obituary:

Saturday, July 25, 2020

The Golden Apple is Out of Reach

EU antitrust enforcer Margrethe Vestager (Forbes)
The large-cap tech companies (Apple, Amazon, Google, Microsoft, and Facebook) all have attracted fierce scrutiny, but nowhere more so than in Europe. [Disclosure: a good chunk of my retirement portfolio is invested in these companies both directly and indirectly through funds and ETFs.] The authorities object to these companies creating legal structures that minimize taxes.

It has long become clear to this writer that the European Union tries to extract huge tax awards by getting courts to apply tax "principles" retroactively to these successful companies, despite their following the letter of the law. That is why it was gratifying to see Apple win a $14.8 billion tax case last week in European court: [bold added]
The case stems from a 2016 decision by the European Commission, the bloc’s top antitrust enforcer, which said that Ireland must recoup €13 billion in allegedly unpaid taxes between 2003 and 2014, money the commission said constituted an illegal subsidy under the bloc’s strict state-aid rules.

The General Court swept aside that reasoning, saying it annulled the decision because the commission had failed to meet the legal standards in showing that Apple was illegally given special treatment.

The 2016 decision against Apple was one of Ms. Vestager’s first big broadsides against tech companies in her role running the EU’s competition enforcement, earning her the nickname “tax lady” from President Trump. She later issued Google three fines totaling $9.4 billion, and launched formal antitrust probes into Amazon and Apple. She is now also responsible for tech regulation and is considering imposing a digital tax on tech giants...

A central issue in the Apple case was whether two Irish tax rulings granted to Apple in 1991 and 2007 gave a form of special treatment to the company, or whether they just reiterated an interpretation of Irish tax law as it was applied more generally.

Those rulings allowed two Irish-registered Apple units to attribute only a small sliver of some $130 billion in profit to Ireland in an 11-year period. The commission said all that revenue should be attributed to Ireland, but the Irish government and Apple say they split the profit reasonably, given that almost all of Apple’s intellectual property is developed in the U.S., not Ireland.

In Wednesday’s ruling, the General Court said that, despite the gaps in the contested tax rulings, the commission hadn’t proven the Irish government granted a special advantage to Apple that was unavailable to other companies in Ireland.
The European Union will now have to do the hard work of crafting new laws that will achieve their goals and not trying to re-interpret the past to try to solve present needs.

Thursday, July 16, 2020

Federal Government: Average Would be a Great Improvement

4 months to process, lucky
I'm not going anywhere
In the coronavirus era everyone must allow extra time to get anything done, which is especially true if one has to deal with the U.S. Government.

One prominent example: taxpayers have been granted an extra three months to file their returns--and I am grateful for the extra time--but the IRS isn't held to a deadline, relaxed or not.

We mailed Mom's paper return in March and have not yet gotten her four-figure refund. (The IRS2Go app says the IRS has not even received her return.)

The passport check cleared on March 18th.
Also in March I sent in my passport renewal application. The renewal was straightforward---no new documents were required except for an updated photo--because the last passport was issued less than 15 years ago.

Today the new passport arrived, four months and three days later. Yes, the safety of employees is paramount, but somehow other public and private organizations are managing to operate safely, with only a moderate diminution in speed. For the Federal Government just being average would be a great improvement.

[Note - June 6, WSJ:
“If you mailed us something, especially in February, it’s gonna be a while,” said Chad Hooper, an IRS worker in Philadelphia and president of the Professional Managers Association, which represents the agency’s supervisors.

Friday, April 24, 2020

One is the Important Number

The general public is getting an education on what constitutes scientific evidence.

Rumors have been swirling for months on possible treatments for the coronavirus, but they're all based on "anecdotal evidence." One person's recovery doesn't tell us anything, because she may have gotten better without a particular drug, and not having side effects doesn't mean that another person won't have any. We have to wait for the clinical trials that cover thousands of cases. Clinical trials seem to take an eternity in a world of same-day shipping.

It takes thousands to prove something is true but only one to prove that it is not. Santa Clara resident Patricia Dowd, 57, died on February 6th while infected with the coronavirus. Her death occurred three weeks before the previous first-known U.S. death in Seattle on February 28th:
(Facebook via Daily Mail)
After Patricia Dowd died at home suddenly on Feb. 6 at the age of 57, her family was in shock. The woman was in seemingly good health, so the coroner’s explanation was all they had: A massive heart attack likely killed her before she hit the floor.

This week came another round of jarring news: Dowd was infected with the coronavirus at the time of her death. She is the first person in the U.S. known to have died from COVID-19.

Santa Clara County Health Officer Dr. Sara Cody said this week that neither Dowd — nor the two other people whose cases were classified as early coronavirus deaths — had traveled outside of the country shortly before their deaths.
Ms. Dowd acquired the virus from "community spread", that is, from a person not a family member or a close friend, which means the virus arrived in the U.S. long before the China travel ban on January 31st.
The infection rate in Santa Clara County could be 50 to 85 times higher than the number of reported cases, according to estimates by Stanford University scientists who administered antibody tests to 3,330 Santa Clara County residents.
Another nettlesome fact about the virus--it's mutating:
The coronavirus mutates about twice every month, so the more mutations there are, the further removed it is from the original strain and the more it has circulated among humans.
By now most of us who keep up with COVID-19 developments know that there are distinctive strains on the West and East Coasts, which are traceable to China and Europe, respectively. The ultimate origin is still thought to be Wuhan, but no one knows for sure.

The multiple mutations cause us to have a lot of sympathy for the scientists and companies who have to develop tests for all of them without signaling a false positive from another coronavirus like the cold. And of course, we can't help but feel sympathy for the family of Patricia Dowd, who was a smart and kind lady who died far too young.

Monday, October 14, 2019

Happy Columbus Day

To commemorate Columbus Day the Christopher Columbus statue on Telegraph Hill was vandalized:
2008 file photo of Telegraph Hill (Chronicle)
A statue of Christopher Columbus at San Francisco’s Coit Tower was vandalized with red paint over the weekend.

The words “Kill all colonizers” were painted on the concrete that encircles the statue, said Supervisor Aaron Peskin, whose district encompasses the park.

By Sunday afternoon, crews had cleaned up the paint on the statue, located on Telegraph Hill in North Beach...

The federal holiday of Columbus Day is celebrated Monday. San Francisco supervisors voted in January 2018 to instead celebrate Indigenous Peoples Day.
Following the modern tendency of viewing the deeds of historical figures and cultures through the prism of today's morality, we eagerly await critical academic analysis of Indigenous People's practices, such as human sacrifice, cannibalism, and polygyny (one man, two or more wives).

While they're working on it we lift a glass to Christopher Columbus and Queen Isabella. Salud!

Sunday, May 19, 2019

Christianity Today: Everyone Wins a Trophy

St. Peter and St. Paul (El Greco)
One of the most significant events in European and world history could have occurred because of a misunderstanding over a single word in the New Testament.
These ["New Perspective on Paul"] scholars begin with the contention that the Protestant reformers mistakenly read 16th-century debates about grace and works into the writings of Paul.

When Paul insisted that no man is justified by “works” or “works of the law,” they insist, he wasn’t criticizing the Judaism of his day as a legalistic or works-based system of earning divine favor.
It's impossible to understate the importance of Martin Luther's 95 Theses, posted on the door of Wittenberg Castle church in 1517. Luther questioned the Catholic Church's use of indulgences, the purchase of which would result in sins being forgiven. (Indulgence purchases were a form of "good works" through which one could enter heaven.)

Martin Luther (Smithsonian)
Martin Luther declared sola fide ("faith alone") based on his reading of Paul's letters to the Romans and Ephesians. According to Luther indulgences were unnecessary to "justification" (right-standing before God). The authority, not to mention a source of funding, for the Church was challenged, and the Protestant Reformation began.

Some modern scholars, however, now say that Luther's interpretation of Paul's view on good works was over-broad:
Messrs. [James] Dunn and [N.T.] Wright contend he was talking about cultural “boundary markers” separating Jews from gentiles. These include rituals and practices such as sabbath observance, circumcision and food laws.
Whether or not their view is correct, WSJ columnist Barton Swaim opines that the new Perspective allows Christianity to de-emphasize not only the faith-good works debate but also heaven, hell, sin, and faith:
My own suspicion is that the New Perspective achieved popularity mainly because young Protestant ministers would rather talk about inclusion and breaking barriers than about the guilt of sin and the pointlessness of trying to erase it by a regimen of good deeds.
I am not definitively persuaded about priests' motivations ("Judge not, that ye be not judged."-Matthew 7:1), but in a society where everyone wins a trophy it makes a lot of sense.

Thursday, May 03, 2018

Cheese Names Stand Alone

Wisconsin's Bel Gioioso found that its "American Grana"
was illegal because of Italy's Grana Padano. (WSJ photo)
Sartori Co. is a family-owned Wisconsin cheesemaker that has been in business since 1939. The company makes its own versions of Asiago, Parmesan, and Romano. However, due to European Union naming restrictions on imports,
Sartori had to trademark new names, leading to the birth of “Sartiago” and “Sarmesan."
Moreover, EU trade agreements will soon force changes to the names of American cheese exports to Vietnam, Singapore, Japan, and Mexico, among others.

In America we are accustomed to companies protecting their names, formulas, and logos through trademark, patent, and copyright law. Europe seems to be putting a wall around words for geographic regions and whole industries; it is also trying to extend the moat worldwide through trade agreements.

Europe's position is somewhat understandable---Americans wouldn't like it if Chinese winemakers labeled their product as Sonoma (Sino ma?) white. Nevertheless, this principle could be taken too far. What if 100 cheese names were off limits? What about 1,000?

The unintended consequence to Europe would be if this barrier induces American suppliers to change what consumers value in cheese, for example, what the cows are fed (e.g., organic corn, organic grass), the breed of cow (e.g., Guernsey, White Holstein), or manufacturing process (no mold!, no anaerobic bacteria! made with sea salt! ).

Protectionism often boomerangs on the industries being protected.

Thursday, March 22, 2018

Not Taught About Much

The Wall Street Journal's intrusive, irritating pop-up afflicts subscribers daily.
When website memberships were new, I furnished the minimum information necessary to gain access; often it was just a name, which could be a pseudonym, and an email address.

I was more forthcoming with Amazon, Netflix, and iTunes, which required real credit cards, names, and addresses, but when the requests became more intrusive, say with a birth date, I left it blank if it would let me, or inserted a fake birthdate.

Lately I've been declining to join any website that wants more than basic contact information. That means no rewards clubs for restaurants, hotels, and other merchants, even those that are frequented often.

A number of websites are always displaying nagging pop-ups to "complete [my] profile". Now, given the revelations about how personal data has been used, I am glad not to have filled out the forms.

But there's no outrage. Facebook and other sites are not subject to strict privacy laws (in America, not Europe) like financial institutions, hospitals, or the IRS, which demand sensitive information while providing necessary services. Social media members voluntarily provided Facebook, Twitter, LinkedIn, etc. with personal information and posted trip photos. Control was lost once the file was uploaded.

The source of much of this mess was boastfulness and pride, in other words users' look-at-me-ism. The ancients considered pride to be the deadliest of the sins, but they aren't taught about much any more.

Wednesday, August 09, 2017

Quiet Diversions

The North Korean regime may seem completely alien to First-Worlders, but it must have an instinct for self-preservation. North Korea is in the position of the hostage taker who is completely surrounded by a SWAT team; he knows that if he fires a single shot--which may or may not kill his hostage--he will be dead in a second. That's why I'm not worried....much.

On my list of havens from the world are art museums. Viewing an artwork online is an imperfect substitute for visiting one, but the advantage is that virtual escape is but a click, not a plane ticket, away.

The Daughters of Edward Darley Boit


The Wall Street Journal to its credit will occasionally devote space to a lesser-known work of art, in this case ‘The Daughters of Edward Darley Boit’ (1882) by portrait artist John Singer Sargent (1856-1925).
He set his large-scale composition just inside the main door of the Boits’ Paris apartment. The girls, in the foreground, are in a theatrically lighted space that melts into a darkened interior. Much of the painting’s allure lies in its careful balancing of color. Warmth slips in sparingly, through the caramel tones of a wall and the red of a dagger-shaped screen. Blackness holds the center, drawing the eye beyond the riddle of these four self-possessed children.

The most we can be confident of is their relative ages. The youngest, seated on the floor, holds a large, pink-cheeked doll and glances slightly away. The eldest stands in the shadows, in profile, next to her second-born sister. Daughter number three, distinguished by her blond tresses, is planted on pipe-cleaner thin legs at the far left, and seems to gaze inward. It is only the second-born daughter, dead center you suddenly realize, who truly looks back, her eyes alert with expectation.

Her older sister leans against an outsize vase, one of a pair. Flanking the passage into what appears to be a well-appointed parlor, the vases lend a sculptural quality to the three standing figures. A ruffle at the neck of the blond child echoes the fluting on the vases.
The WSJ art reviewer points us to a Velázquez from two centuries prior:
He borrowed his structure from Diego Velázquez’s “Las Meninas,” which he had copied on an 1879 visit to Madrid. Both works feature young girls and, unusually, are large and square. Like Velázquez, Sargent overcomes the square’s potentially deadening symmetry with a pleasing off-balance arrangement enhanced by deep space. And, also like him, he upends the conventions of group portraiture by giving each figure room to breathe. A viewer of the Boit daughters could seemingly join 4-year-old Julia on the carpet.
Las Meninas
There are beautiful aspects of the world that will long outlive our current "urgent" concerns. Quiet diversions can remind us so.

Saturday, January 14, 2017

No Woman in History has Exceeded Her Achievement

Ferdinand and Isabella - wedding portrait (Wikipedia)
This is a time when we need strong women leaders, so it's appropriate to remember one of the all-time greats, Queen Isabella, without whom the blessings of Western Civilization would not have come to the New World.

From America’s Hidden History by Kenneth C. Davis [bold and bullets added]:
In 1469…teenage cousins Ferdinand of Aragon and Isabella of Castile were married. Isabella and Ferdinand were a remarkable couple whose successes in
  • uniting several fractious small kingdoms into a nation [Spain],
  • eliminating the last vestiges of Islamic power in Iberia,
  • revving up the Inquisition, and
  • setting Spain on a path of world domination
    were extraordinary by any measure.

    “No woman in history has exceeded her achievement.” - Hugh Thomas, Rivers of Gold
  • Isabella turned down arranged marriages and chose to marry second cousin Ferdinand, who was no shy consort material. By the age of 17 Ferdinand had already led troops into battle and fathered children by two different women.
    In modern tabloid parlance, he’d be headlined a “hunk.” In fact the pair would have been People magazine’s dream royals. The tall, blue-eyed beauty Isabella and the muscular Ferdinand would have dwarfed most contemporary celebrity couples.
    Moderns will quail at the brutality of those whom history has labeled great, but one truth is that in Isabella’s time everyone behaved savagely, the Moors whom “Ferdabella” drove from Spain, the French whom the Spaniards battled in the New World, and the “Indians” in what was to become America.

    Nevertheless in the annals of atrocities there are few rivals to the cruelty of the Spanish Inquisition, which tortured and killed Protestants and Jews during Isabella’s reign, or the death and destruction wrought by the Spanish conquistadores who came after Columbus and Isabella. Another Spanish first---years after Isabella's reign but a direct consequence of the forces that she set in motion--was slavery:
    Menendez also brought along Africans as "laborers" [in 1565], which should properly give Spain---not the English in Jamestown in 1619---the distinction of introducing African slaves to what would become the United States.
    Not all of Isabella’s “achievements” may be praiseworthy, but they had a profound influence on the world that exists today.

    Friday, September 02, 2016

    Blowback

    Margrethe Vestager, EU Competition Commissioner 
    The field of international tax planning was specialized, complex, cloistered, and quiet---until the European Commission ruled on Tuesday that Apple has to pay €13 billion ($14.5 billion) in back taxes to Ireland. Tax-the-corporations crusaders "hooted with delight" and seemingly didn't care about the methods used to arrive at the result. The overwhelming majority who adhere to the rule of law--whether the law cuts for or against their preferences--saw the danger.

    The Economist [bold added]:
    "The commission concluded that Irish rulings in 1991 and 2007 artificially lowered the tax Apple was due to pay, and that although the firm did not break any law, this arrangement was in breach of EU state-aid rules preventing member states from offering preferential treatment to particular firms."
    Normally laws trump "rules" in the hierarchy of legal authority, but not, apparently, when the laws of the sovereign state of Ireland are measured against the rules of the European Commission.

    The Wall Street Journal:
    For a quarter-century, Apple relied on agreements from Irish authorities that all of a sudden are adjudged to have provided it with billions of dollars in what the EU has now ruled to be illegal state aid.
    There's no question that Apple and other multinational corporations take advantage of inconsistencies between tax jurisdictions ("tax arbitrage"). To achieve significant tax reduction under the law, however, multinationals must have employees and other attributes of a "real business" in low-tax countries, hence explaining why Dublin is a boomtown.

    Apple CEO Tim Cook: "Total political crap"

    Quite apart from the merits of its case, the European Commission ruling can be viewed as an attempt to reassert its authority (and finances) after Brexit. However, the blowback may have been stronger than they had anticipated.

    Apple's EU tax ruling has sparked talk of an 'Ir-exit'. Other European countries are watching and weighing the benefits of staying in the union.

    Apple, as well as other multinationals like McDonald's and Amazon, will contest the judgment for years. Meanwhile, they have also begun moving some operations out of the Eurozone to reduce exposure to EC rulings. We are seeing either the resuscitation of the European experiment or the beginning of its end. If I had to bet, it would be on the latter.

    Friday, June 24, 2016

    The Upper Hand

    The major stock market averages are down about 3% three hours before the close. Yesterday's British referendum to leave the European Union ("Brexit") has injected a huge dose of uncertainty. Normally, your humble small investor would view the current circumstances as a buying opportunity, but the problems may well extend beyond the impact on Great Britain.

    According to British WSJ columnist James Mackintosh we can foresee either a short correction or a "rolling crisis": [bold added]
    If the world sees Brexit as a cry of anguish from a small island somewhere to the northwest of the world’s biggest trading bloc, then the market correction elsewhere could be nasty and brutish, but short.

    As a British passport holder I tend to think an impending disaster for the world’s fifth-largest economy could be the next round of the rolling crisis that started with U.S. subprime, crushed Lehman and then the eurozone before flattening emerging markets. Each showed the weaknesses in the global economy, and prompted proper arm-waving panic before central banks got them under control. I may be biased, but it feels as though there could be a lot further to fall before the central banks can stabilize markets.
    The market is driven by both fear and greed, and fear is holding the upper hand.

    Wednesday, June 15, 2016

    Multinational Tax: No Change Any Time Soon

    Lisa De Simone
    Stanford accounting professor Lisa De Simone says that multinational corporations shift income to low-tax jurisdictions at twice the rate of previous estimates:[bold added]
    In our European sample, instead of $54 billion being moved, we find that it’s more like $99 billion..... a change in the tax code could have a bigger effect on the tax base than previously thought. Say, for example, a country raises its tax rate, hoping to generate more revenue; you could get enough outward income shifting that tax revenue actually goes down. In a global economy, the corporate tax base is a very leaky vessel!
    To repeat, after raising the tax rate countries sometimes find that total collections go down as multinationals shift income.

    One of the principal mechanisms is "transfer pricing," that is, a high-tax French subsidiary "sells" product to an Irish sister company at a low price, thereby making France less profitable and Ireland more so. Income and expenses may also be shifted through other structures such as loans, leases, and service fees.

    With the multiple jurisdictions and entities involved, international corporate taxation is much more complicated than U.S. individual income taxes. Trying to increase tax collections from multinationals would involve changing the law country by country in dozens of jurisdictions, which will be difficult and extremely time consuming.

    Do not expect change any time soon.

    Monday, December 14, 2015

    Time's Person of the Year: Merkelvellian

    The Chancellor of Germany, given the importance of the country, is always influential, but each century there's at least one Chancellor who changes the course of history.

    19th Century - Otto von Bismarck

    20th Century - You Know Who

    21st Century - Angela Merkel, Time's Person of the Year. [bold added]
    Her political style was not to have one; no flair, no flourishes, no charisma, just a survivor’s sharp sense of power and a scientist’s devotion to data. Even after Merkel became Germany’s Chancellor in 2005, and then commanded the world’s fourth largest economy, she remained resolutely dull—the better to be underestimated time and again. German pundits called her Merkelvellian when she outsmarted, isolated or just outlasted anyone who might mount a challenge to her.

    Thursday, July 16, 2015

    That Can Won't Roll Very Far

    (From Vivify Change Catalyst)
    So Greece "won" by negotiating a third bailout of Greek banks:
    Eurozone finance ministers agreed “in principle” Thursday to grant Greece an expensive third bailout designed to keep it in the euro. But the likelihood that the prospective three-year deal will fail—possibly before it even starts, let alone is completed—is now estimated at higher than 50% by some senior officials in Europe.
    No politician on either side wants to be responsible for the write-offs, economic contraction, impoverishment, and even riots that will occur if Greece reneges on its Euro debts and departs the European Union. Better to lend a few more Euros and let the next man or woman deal with fixing a bigger problem.

    Yes, the Greeks "won," but in the end they got worse repayment terms:
    the radical-left party led by Alexis Tsipras played a reckless game of brinkmanship with the rest of the euro area, and in particular with Germany. Though the aim was to secure a better deal for Greece, the negotiations simply further injured the economy. The game of bluff culminated in a far worse deal on July 13th following bitter negotiations in Brussels last weekend between Mr Tsipras and other euro-zone leaders.
    That kicked can has so many dents that it hardly rolls very far.

    Sunday, July 12, 2015

    Borrowing Is Easy, Repayment Is Hard

    Anglican priest and Guardian columnist Giles Fraser says the current Greek-German-euro crisis harks back to different perspectives on the Crucifixion(!) [bold added].
    As Mr Fraser recalled, traditional Protestant and Catholic teaching has presented the self-sacrifice of Christ as the payment of a debt to God the Father. In this view, human sinfulness created a debt which simply had to be settled, but could not be repaid by humanity because of its fallen state; so the Son of God stepped in and took care of that vast obligation. For Orthodox theologians, this wrongly portrays God the Father as a sort of heavenly debt-collector who is himself constrained by some iron necessity; they prefer to see the passion story as an act of mercy by a God who is free.
    The Greeks, obviously steeped in the Orthodox notion of a merciful God, had over 15 years of fun in the Mediterranean sun at the expense of those dyspeptic German bankers. C'mon, Angela, forgive us our debts and we'll try real hard to pay you back next time.