imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
latest news
best of news




A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List


IMC Network:

Original Cities africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Low Taxes is an Act of Desperation

by Rudolf Hickel Tuesday, Dec. 20, 2016 at 7:13 AM

A low business tax can be counter-productive if a deadbeat infrastructure arises through lower state revenues. Lowering business tax rates leads first to enormous budget holes. Employees will bear this burden at the end.


The economist Rudolf Hickel warns: The low tax plans of Theresa May and Donald Trump are dangerous. Down with taxes! Will Theresa May lure Indian firms to Great Britain?

[This interview published on 12/14/16 is translated from the German on the Internet, The 74-year old economist is the author of many books and directed the Institute of Labor and Economy at the University of Bremen up to 2009. He is a co-founder of the Alternative Economic Policy study group.]

taz: Mr. Hickel, the future US president Donald Trump, Hungary's Premier Victor Orban, and Great Britain's Prime Minister Theresa May – all want to drastically lower business taxes in their countries. What is your opinion?

Rudolf Hickel: A primitive myth, the Swiftian tax table, stands behind the plans of the governments. When business taxes fall, businesses have more incentives for investments. The gross domestic product – the basis for assessment – and the tax revenues grow. So a lower t0061 rate should lead to higher tax revenues at the end.

Does this mechanism really function?

No, and that is proven by history. The height of the tax rate is not the sole decisive criterion for investments by businesses. The infrastructure, the supply of trained workers, and net possibilities are the really important reasons for a location decision. A low business tax can even be counter-productive if a deadbeat infrastructure arises through lower state revenues.

What does it look like in practice?

Look at Germany. The Schroeder government lowered the business taxes – like the corporation tax. The expected growth impulses and the additional tax revenues that should compensate the losses through the lower tax rates were canceled. Ronald Reagan tested that in the US. The result was higher state debts through tax reductions, neoliberal insanity.

Why then do countries like Luxemburg and Ireland profit from their tax incentives for businesses?

Businesses did not become sustainable and active in these countries and bring investments and employment. "Tax optimization" of big businesses occurred, for example withdrawing profits from other countries tax-free with the help of patent payments. The international companies in Great Britain are concerned that the country leaves the EU domestic market, not about excessive business taxes. No business from Germany would migrate to Great Britain only because the business tax is six percentage points lower – especially not with the current uncertainty and downswing of the pound.

How do you judge Theresa May's announcement?

The obsequiousness with low tax rates is an act of desperation. It is an admission that the Brexit has dreadful consequences – that cannot be stopped.

What dangers threaten through possible tax reductions in the US and Great Britain?

I see two great dangers with this policy. The first is within one country. Lowering business tax rates leads first to enormous budget holes. Employees will bear this burden at the end: through the social cuts sparked off by the budget imbalances and by increased mass taxes like the sales tax to offset this deficit.

What is the second danger?

This is the increasing competition between states to raise their location advantages and to lower taxes. This is the beggar-thy-neighbor policy – make your neighbor into a beggar. Tax dumping is carried out at the cost of other states to gain supposed economic advantages. This is similar to the Euro-crisis. Germany exports wage cost advantages and pushes out domestic businesses. A tax race also harms other countries and forces them to join in this competition. The results are the destruction of trade relations, state debt crises, and intensified austerity policies.

Where do you see parallels between Orban, Trump, and May?

Their tax concepts are an expression of re-nationalization, populism, and right-wing screening. They collect points among voters with the same sayings: USA First, Britain First. A screening policy follows in trade. Nationalist protectionism and the swing to the right are two sides of the same coin.

Let's stay with Trump for a moment. Aside from tax policy, what other nationalist measures do you expect in US economic policy?

In the election campaign, Trump promised to bring back jobs to people in the Rust Belt. He will promote screening American industry outwards. If he really does that consistently, he has two other instruments besides fiscal policy. One is an aggressive "Buy US" – strategy. This means hardly any or no foreign businesses will be commissioned in the public sector. As the second instrument, he could reject free trade agreements and impose high dumping tariffs on foreign imported goods. Dumping tariffs are a harsh instrument that can have very fast effects on world trade.

In Germany, there are only a few Trump fans. However, some say: "At least the TTIP (Transatlantic Trade and Investment Partnership between the EU and the US) will not pass now." Do you see it that way?

I cannot be glad about this. Critics of the TTIP do not want re-nationalization through screening. They want trade relations on the basis of the highest social, ecological and economic standards for all countries. We want above all to inactivate the power of corporations. Nationalist protectionism is the other extreme to the total neoliberal free trade.

Report this post as:

Local News

More Pix: "Families Belong Together," Pasadena J02 12:16PM

"Families Belong Together" March, Pasadena J02 12:08PM

Short Report on the Families Belong Together Protest in Los Angeles J30 4:26PM

Summer 2018 National Immigrant Solidarity Network News Alert! J10 11:58PM

Watch the Debate: Excluded Candidates for Governor of California M30 10:20PM

Change Links June 2018 posted M28 12:41AM

The Montrose Peace Vigil at 12 Years M22 1:01PM

Unity Archive Project M21 2:42AM

Dianne Feinstein's Promotion of War, Secret Animal Abuse, Military Profiteering, Censorshi M17 3:22PM

CA Senate Bill 1303 would require an independent coroner rather than being part of police M10 2:08PM

Three years after OC snitch scandal, no charges filed against sheriffs deputies M10 1:57PM

California police agencies violate Brown Act (open meetings) M02 1:31PM

Insane Company Wants To Send Nuke Plant Waste To New Mexico A29 4:47PM

Change Links May 2018 A27 1:40AM

Worker-Owned Car Wash on Vermont Closed A26 10:37PM


lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

More Local News...

Other/Breaking News

Children Incorporated Earns 4-Star Rating on Charity Navigator J16 11:24AM

Democratic Socialists of America J14 4:57PM

Leonard Peltier Non Violent Native American Political Prisoner since 1970's J14 4:18PM

Paraphysique miscellanées de l'aggiornamento J14 12:54AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Cleanup J13 4:14PM

FBI Investigated LA County Sheriff Baca,Why Not Hank Skinner's Persecution? J13 3:52PM

Updated Partial List Of Famous Vegetarians, Vegans, & Fruitarians J13 2:59PM

The Shortwave Report 07136/18 Listen Globally! J12 4:36PM

Social Policy as Social Infrastructure J12 3:38AM

Vol I: 84 Varieties Of GOP Election Fraud J12 1:50AM

Texas Can Call it An Execution,But It is A State Sponsored Murder of Hank Skinner.. J11 6:48PM

June 2018 Honduras coup update J11 3:35PM

Maria Estrada doubles down on racist support J11 1:40PM

New York Women in Film & Television Announces 2018 NYWIFT Ha Phuong Scholarship Recipients J11 10:14AM

Trapps de la domination, trapps de l'aliénation J11 1:31AM

Please Work For The Defeat Of Brett Kavanaugh And Why J09 8:54PM

Change Links 2018 July posted J09 1:27PM

Transinhumanisme ( transe inhumanisme ) J09 12:44PM

Google, World's Biggest Censor, Was Founded By The CIA J09 10:25AM

For a World Free of Nuclear Risks J09 8:29AM

Corrupt CDC Ignores Meat Fish Recalls J09 4:55AM

The (Temporary) End of Globalization J09 3:03AM

Aternatives to Abortions such as Plan B the pill, condoms and IUD J08 4:03PM

U.S Congressional Legal Minds Know Better Than Allowing Texas To Murder Hank Skinner J08 3:37PM

ACLU in many US states defends in court KKK and American Nazis Sometimes for Money J07 11:28PM

Judge Brett Kavanaugh: 12 Of Many Reasons To Oppose Him J07 9:00AM

Insensibilité engrammée J07 2:37AM

Silver Lining J07 12:21AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy