The Discrete Charme of Hypocrisy
Two birds with one stone.
There is a difference between tax avoidance and tax evasion. The first is legal; the second is not. It is a duty of any corporation to maximize the first; the second is to be avoided (no pun intended) at all costs. Given this clear distinction, it is surprising how much noise is made when a company alters its structure to pay the minimum amount of taxes. It engenders feelings of betrayal, nationalism and calls against “capitalistic excesses”. But it is a logical, economic step required in order to survive in a global and competitive economy. As an example, a most recent newspaper story reported on domiciliary acrobatics by Ferrari in preparation for its spin-off and quotation (article from Il Giornale “Il Cavallino vola all’estero?” here, in Italian); the objective of the exercise appeared to be (the move is being denied by FCA) the maximization of profit retention without harming operational efficiency. The real issue underlying the debate is not so much “moral” or “ethical” in nature, but what is to be done about the existence of rules available to all. Nations and their governing bodies, motivated by the desire to be more competitive in attracting capital, implement these rules. They are enacted by politicians and elected officials of all colors and creed. It follows that if a nation wants to avoid the next eloping national corporate treasure it needs to take legislative action: simplify or change the tax code and stop demonizing “big” corporations and the capitalistic system. Furthermore, harmonization of taxation across countries belonging to an economic union is a must. Something the European Union should have completed decades ago.
There is a difference between protecting privacy and usurping the right to access already existing information. I find it interesting and intimidating living with GPS-enabled mobile phones, emails, Instagrams and Internet purchases. But I do realize this new evolving world should not imply full “transparency”. It’s uncomfortable at times to have no window shades to keep you in your own lovely darkness. Should this protection provide one with the ability to selectively hide from public view known facts or distorted reporting that is part of his or her historical record? Some European courts have recently imposed ludicrously restrictive rules on Google exactly for this purpose, in a classic shoot-the-messenger political attack on the search engine. Has anyone really thought what providing this level of “protection” means? Taken to their logical conclusion, the rulings imply the removal from the archives of all newspapers, television stations, radio stations, universities, libraries and others of any information judged to be inconvenient by any individual. Is this what we want by advocating “privacy protection”? As I write, this prohibitionist attitude is being extended to the dispersion of copyrighted material in Spain. Admittedly this is a much more delicate and complicate situation. But one which we will not thoroughly resolve until we discuss how public libraries fit into the equation.
Photo Source: “two birds with one stone”, fluentu.com
It is true that companies have to operate in the framework given to them. And as we all should pay taxes as we use the infrastructure given by the state we live and operate in it is also true that we don’t have to waste our money. Therefore I agree that it is about the politicians to set a framework which ends the tax avoidance strategies. And I agree as an european citizen that it is a shame that the EU didn’t come up with a solution for over 20 years. Luxembourg and others promised in 1994 the same promises you hear now a days – but nothing changed.
It is very ironic that Jean Monnet, the “father” of the European Union, made the following statement: “People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them.” We shall see if he’s right this time.
Good post Roberto, I fully agree with the concepts. In the specific case of Fiat there is an however an objection I need to make: Fiat has benefited for half a century from all sorts of public support, direct, indirect, legal, illegal etc. It should show some gratitude to its land, and could do so by pushing its weight around, engaging, becoming a catalyst for the much needed change in a constructive and socially responsible way. For once taking some risk and lobbying in favour of laws that would benefit the entirety of the industrial world in Italy, thus breaking a tradition of ad-persona lobbying.
Absolutely agree. Your points go well beyond what I intended to highlight. In any case, independently of who pushes or forces changes, those changes should be implemented because only redirecting the incentives we will get a solution. And not only in Italy but across Europe. If, that is, the EU actually exists as a truly unified market.