Guess Why Europe Wants America To Raise Its Taxes?
Because higher taxes in America makes Europe’s higher taxes look more competitive in the world market. That’s why Finland’s Prime Minister is totally in favor of higher American taxes.
We have to initiate discussions at the European Union level about how to prepare for the post-crisis period. Getting public finances in order is a must if we are to grow, create employment and provide the welfare services that we in Europe value so much. … This will require tight control and, in many countries, painful cuts. However, it would be unrealistic to assume that all the balancing could be done on the spending side alone. … The overall tax rate will have to rise as well over the longer term. In some areas that can be done without much consultation between the countries. … However, raising such taxes can have detrimental effects on economic activity. This is especially so when a country acts on its own: capital and people can respond by migrating to jurisdictions with lower rates. … Parallel measures would help all of Europe: tax competition risk would be reduced and the public finances of individual countries would improve. Such co-ordinated tax changes could set also an important global example. In particular, it might encourage the US – with lower tax levels in most areas – to do what has to be done to address its spiralling budget deficit.
As James Pethokoukis says, “Don’t raise the bridge, lower the river!”
I think this illustrates the difference between good competition and bad competition. Say you own a business. You’re competing with another business down the street. Good competition is when you beat that business by offering superior quality, service and prices. Bad competition is when you hire someone to burn the other business down.
Basically, Europe wants America to burn. Or, departing from that metaphor, they want us raise our taxes so they don’t have to lower theirs.
And, sadly, far too many people here in America seem just fine with that.
