A Good Job of Removing Pigeons from the Piazza Della Signoria
Kitty Miv, Editor
20 February, 2014
Kitty's Kountry Rankings are below, with a description of how they are kompiled. This week, as every week, I give out Encomiums to countries which have done Good Things, and award Execrations for countries which according to my highly personal and partial views have done Bad Things.
I suppose it's positive that Italy has removed San Marino from its black-list of low-tax countries. Not sure though whether it's quite as positive that Italy removed its Prime Minister in the same week. They are comparing Matteo Renzi to Tony Blair, but it remains to be seen whether "New Labour" is a concept that will turn out to have wheels in Italy's moribund polity. Anyway he's Mayor of Florence, where he has done a good job of removing pigeons from the Piazza della Signoria. Let's hope it's a bit more permanent than Red Ken's attack on "flying rats" in Trafalgar Square in London. If he does succeed in removing blood-sucking political vampires from Italy's public spaces then Renzi will deserve a statue. Ci vediamo! Meanwhile, back to San Marino, which used to be a thriving Italian Monaco, but has been reduced by successive Italian non-Governments to a level of importance equivalent to that of an Austrian mountain resort, which is indeed what it was prior to the risorgimento. Previously it could fairly be called a tax haven, and that is probably why it still has GDP per head of more than USD60,000, putting it way ahead of Italy itself, and in the top 10 of countries world-wide. It is a country, yes, sort of, but not powerful enough to have managed to retain its fiscal independence as have Andorra or Monaco. It's not quite clear why the Italian authorities decided to make an example of San Marino, especially given that a high proportion of the salotto buono probably had bank accounts there. Anyway, it has been done, and the Sammarinese will have to support themselves in future by selling postage stamps to collectors and VAT-free ice-creams to the tourists. As a piece of gratuitous information, I can inform you that there are lots of Russians in San Marino. You can make what you want of that, but bear in mind that it's also true of Hastings and Limassol.
It may be our own news, but I have to say that the promised removal of stamp duty by Welsh Tories is not the week's most compelling development, given that those self-same Tories are expected to score less than 20 percent in the next election. At least I suppose that the UK Independence Party will do even worse in Tudor country. And to be fair, there are large numbers of English cottage-owners in Wales who probably have their votes in Surrey and may be influenced by their Welsh comrades-in-arms. I cannot however resist telling you about a drunken escapade that I (as a Chelsea resident) took part in, probably in 1971, when five of us went to Wales one Saturday in order to buy a cottage on offer at GBP100, which was about the cost of one weekend's gin-and-tonic consumption between the five of us. We found it, eventually and rather surprisingly, perched on the edge of a 200 foot escarpment. The particulars said that there was a water supply ten yards in front of the cottage, and in the twilight (it had taken us all day to get there) we could indeed dimly make out a pump at the foot of the cliff, although it wasn't clear how it could be reached other than by parachute. They didn't have hang gliders in those days. There wasn't even a pub in the village, not that there was a village in any case, and we didn't find one until we had crossed back over the English border. That's Welsh cottages for you, stamped or otherwise; but I want to add in the interests of total accuracy that my boy-friend at the time was Welsh, and even he saw the joke.
"The farmers and the cowboys should be friends," they sang in Oklahoma, even though they weren't, and they often ended up killing each other. I guess the farmers won, in the end, and nowadays most of them have turned into companies, while the remaining cowboys are Federal marshals who make sure that the farmers hang onto their property. Nowadays we could sing: "The bosses and the governors should be friends," although it doesn't have quite the same resonance, and they face each other down across a court-room floor rather than a corral, and with lawyers instead of guns, but you get the picture. So this week the OECD, which for the avoidance of doubt needs to be understood as a tool of government and no friend of business, has brought out its latest fusillade of anti-business rhetoric in the shape of its Common Reporting Standard. Don't be deceived, by the way, into believing that the CRS is going to apply only to financial institutions: that's where they are starting, but there is every intention to apply it to larger companies, and then ever smaller ones as well. It's no coincidence that in the same week, the EU's Competition Commissioner has launched an attack on companies' tax practices, hilariously pinned to the principle of the single market. It reminds me of the Russians' Monopoly Commission, which worked assiduously in support of monopolies, in the same way that the EU Commission is now working against competition, despite its ritualistic protestations to the contrary.
I won't stop to do more than remind you that these attacks on corporate freedom are the direct consequence of nothing more or less than the bankruptcy of governments resulting from their spendthrift electoral rent-seeking over the past 20 years (or is it 200?). They will do anything, however immoral, in order to raise more revenue. But I do want to emphasize that an attack on business is in real terms an attack on consumers, that's to say you and me, and that neither of us has a vote in Europe's anti-democratic apology for a mega-state other than through the European Parliament, which is as much use to consumers as a sick headache. The response of business, of course, will be to protect itself by withdrawing, so far as it can, from the reach of its predators. That's to say: a company currently based in, for instance, France, faced with oppressive, bureaucratic intrusion into its affairs will choose to move elsewhere and to distribute to its French customers through local agents who don't have a Permanent Establishment in the country. That "elsewhere" may be Dubai, Brazil, Shanghai, or wherever, and increasingly the distribution, or at least the sales activity, will be on the Internet, so that the number of boots on the ground in France will diminish. Equals unemployment, right? Equals less tax for France. Equals higher taxes for you and me. So, please remember, governments, you should be friends with companies, not their enemies, and if you forget that, you will be the losers. They can move, and you can't!
Kitty's Encomiums and Execrations
Methodology: each week (this is the 92nd) two or three countries are given encomiums and two or three are given execrations. Those are the entries below with descriptive links. In the following week, each encomium counts as + 1 for that country, and each execration counts as 1, being added to that country's existing score. Over time, therefore, a ranking will build up for each country, and further countries will join the listing. Germany is at neutral, since in the second week it had an execration and in the first week it had an encomium, leaving it at neutral; then it had an execration in week four, thus dropping to 1, and another one in week six, dropping to 2; finally in week 13 it got something right, so it went back up to 1; then in week 16 it gained a further star, so then it was in neutral territory until week 23 when it dropped back to minus one, but reverting to neutral territory in the following week, then dropping to minus one in week 50, and back up to plus one in week 51, then to plus two in week 52. Some weeks ago it dropped a place, but then quickly recovered one step. Etc etc and now it's on plus 1 again.
The rankings are intended to be a proxy for business friendliness; evidently they are highly partisan, but as time goes by they are becoming useful for decision-making. For any country in negative territory, you should think carefully before starting a business there.
Italy killing with kindness
OECD beyond the pale
United Kingdom: promises, promises
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