Introducing Europe’s Frightening New Tax Directive, by Simon Black

Only Ivy League economists and Eurocrats are surprised that lower-tax jurisdictions in Europe attract more businesses, and their economies do better, than higher-tax jurisdiction. The Eurocrats solution? Make the lower-tax countries raise their taxes! From Simon Black at sovereignman.com:

In a bizarre story disclosed over the weekend, we learned that Belgium’s Princess Astrid was robbed by two assailants on a motorbike.

The thieves apparently approached her while she was sitting in traffic, smashed in her window, snatched the Royal Handbag, and sped off with over 2,000 euros in cash.

I have no doubt that was a harrowing experience for the princess, as it would be for anyone.

But as I researched a bit more, I learned that Belgium’s royal family is lavishly paid, particularly for a small country of just 11 million people.

King Philippe of Belgium receives more than 10 million euros per year. His father, the ‘retired’ king receives a pension of nearly 1 million euros annually.

Princess Astrid, the King’s sister, receives about 300,000 euros per year, in addition to usage rights of the royal properties.

In order to pay for this largesse, Belgium suffers some of the highest tax rates in the world, as high as 50% if you earn even a modest income.

In addition there’s 13% employee contributions to Social Security (plus employer contributions of 35%), and a Value-Added Tax of 21%.

Businesses in Belgium are subject to a 30% corporate tax rate, a 3% ‘crisis surcharge’, and my personal favorite, a 5% ‘fairness tax’.

In total the Belgian government’s tax revenue eats up about 45% of GDP, which means that the government takes almost half of all economic output.

This is an astounding figure… though it’s less than other governments in Europe like France or Denmark.

Now, with due sympathy to the princess, I wonder if having 2,000 euros stolen by motorbike bandits is philosophically much different than having 50%+ of your income stolen by the government.

Both of these events can occur at gunpoint. Both carry severe penalties if you resist.

At least with the bandits it only happens once, or rarely, in a lifetime. With the government it happens every single day.

Every time you spend money. Every time you earn. Every time you invest. The government’s there taking its share.

US Supreme Court Justice Oliver Wendell Holmes Jr. once wrote that “Taxes are what we pay for civilized society.”

Of course, Holmes wrote that statement at a time when tax rates were about 3.5% (not a typo), so it’s completely taken out of context.

But the quote still serves as a rallying cry for Social Justice Warriors who want to take more of your paycheck.

The entire premise of income tax is that ‘your’ money isn’t really yours after all. It’s theirs.

They have first right to take as much as they like from your earnings, leaving you with whatever leftovers they choose.

Income tax is like a financial Primae Noctis. And yet governments always seem to want more.

I don’t get it. There are so many examples of low-tax countries that are thriving.

Even in Europe, for example, Estonia has a profits tax as little as 0%. And yet they consistently run a budget surplus.

Ireland has had a low-tax regime of just 12.5% on corporate profits for years, and they recently announced a new tax regime for certain companies as low as 6.25%.

Go figure, these low tax rates have attracted substantial investment (and jobs) from huge multinational companies, all of which has boosted the Irish economy.

So the Irish government essentially takes a small slice of a rapidly expanding corporate pie, as opposed to Belgium and France’s huge slice of a shrinking pie.

It’s not rocket science. If you create reasonable incentives, businesses will invest, the economy grows, and everyone wins.

To continue reading: Introducing Europe’s Frightening New Tax Directive