For the European élite, high tax is an intrinsic good

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Not a happy ending

Every country, Dalrymple points out, ought to

use the means at its disposal to solve its own problems that arise from history and culture.

Yet a large part of the so-called European project is the plan for a

fiscal straitjacket, accompanied by transfer payments from one country to another.

Glancing at the newspaper the Monde, Dalrymple comes across an article on the subject of la tentation du paradis fiscal that carries the heading

Après le Brexit, le Royaume-Uni fait le choix des charmes dangereux du dumping fiscal

This is a reference to an idea floated in some parts of the UK government that corporate tax might be cut to 15%. ‘Fiscal dumping’ here means

levying a tax rate on corporate profits lower than that of other nations.

Some people, Dalrymple ventures,

might call this competition.

The Monde‘s use of the term ‘fiscal dumping’ is telling, says Dalrymple, about

the dirigiste European political élite mindset. They cannot say a priori what rate is ‘correct’, but terming a 15% corporate tax rate ‘dumping’ implies that there is a correct rate.

The implication is that national differences in tax rates are inherently wrong, and that the tax rate ought to be high, even if a lower rate results in a higher take.

One might think that the main attraction of high tax rates is the distress they cause to those who pay them.

Dalrymple explains that the belief in a ‘correct’ tax rate

can only mean a belief in the uniformity of tax rates in Europe, and in overruling each individual country’s preferences and needs. Uniformity implies the need for a centralised authority over which there could never be the slightest democratic oversight. There is no European people to elect a European government, and never will be.

Official tax rates and effective tax rates may differ.

A system of concessions, exceptions, and bribery is likely to flourish where rates are high and it is worth avoiding and evading tax. A corrupt or flexible polity with a high tax rate may impose less tax in reality than an honest one with a low tax rate.

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