Tax Farming Fury

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The Prime Farmer in the UK is cursing mad that farmers in charge of other countries are milking his cows.

Yes siree. UK Prime Minister David Cameron said that he wants to “stop unfair tax farming practices“. And he swore he’s going to make “damn sure” that people like Starbucks pay him more.

Never heard of tax farming? Here’s how it works: Cameron and the leaders of other countries/farms are the farmers. You, the taxpayer, are the cow. You roam around figuring out how to produce and trade to survive. The farmer forces you to report how much you produced and then fork over whatever he figures is a fair share. Now here’s the part Cameron is steamed about: taxpayers are legally allowed to roam onto other farms and fork over what a competing farmer thinks is a fair share — instead of paying up to Farmer Cam. Cameron is so fuming mad that he even said these roaming cows are “aggressive” and “lack moral scruples”. He also said he would “drop a tonne of bricks” on any producer that dares not report how much he truly produced.

Cameron said we should start a debate with him about this topic which applies to taxpayers worldwide. OK. Here are a few rebuttal ideas:

  • Mr. Cameron, why is it moral (and not aggressive) for you to farm us? How about you have a turn producing and we’ll farm you? Or here’s a crazy idea: how about we forget about treating each other like livestock and instead respect private property rights?
  • Leaving aside the morality of threatening to crush people to death for not revealing their private financial affairs, why don’t you threaten to drop a ton of bricks on competing farmers instead of your own producers? Or if you wish to take a break from initiating threats of violence, why don’t you just lower your “fair” tax below competing farmers so your producers don’t want to roam?

In the spirit of walking a mile in your muddy boots, Mr. Cameron, I empathize that you do have a problem. The harvest is coming in short and you need more spending loot. You and I could yak about this until the cows come home, but here’s some quick food for thought. The nineteenth century was a period of massive wealth creation both in the UK and the USA. During that time, there was by and large no such thing as income tax or reporting. It turned out that entrepreneurs thrived while keeping their financial affairs private and were quite keen to risk their savings on new businesses with the prospect of reaping all of the reward if things worked out. And for about eighty years, your zero import duty was a further boost to general economic prosperity. Alas, even though government finances were in better shape than today, I can guess that going back to zero income tax and duty might stick in your craw.

As G8 chairman, I know you’re hell bent for leather to conspire to put an end to “unfair tax farming practices”. But here’s a final tidbit for you: voluntary cartels are doomed to fall apart. Imagine you and your world tax farmer pals agree to fix the global income tax percentage. So British Telecom, for example, would then be forced to pay the same burden anywhere they report their income, right? Wrong. There would still be the specter of offsetting cost savings that might entice them to roam. What will you do when Ruritania promises to build a new airport adjacent to the site of a relocated British Telecom world headquarters? Or promises government schools in Ruritania will make British Telecom technical skills part of the curriculum? Cartel in-fighting will ensue and your dreaded tax farming competition will return.

Don’t fret Mr. Cameron. In case your bid to become World Government Capo dei Capi doesn’t work out, you could always retire from aggressive tax farming and apply for work at your favorite Starbucks.

Arthur Martin McCannell Krolman [send him mail] is the founder and president of a medical device company based in Boston, MA. Visit his website. He is also the author of The Scary Story of the Three Little Pigs and the Big Bad Box of Free Money.

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