• Tag Archives Tax
  • Germany To Tax VAT Just Billing People Before they Pay

    The German government is desperate for money and what they are doing now is just unbelievable. Germany is looking to order companies to prepay VAT tax before they even collect it. Companies in Germany will now have to pay the VAT immediately to the government on any amount they have billed to a customer. This is very drastic. Normally, someone who pays a bill in installments would pay the VAT on that amount that they pay. Under this new scheme, the company must pay the full VAT tax before they get the money. Even a sports contract would require paying the VAT on the entire contract which may be for 5 years up-front.
    Armstrong Economics

    This post was published at Armstrong Economics on Sep 24, 2017.


  • German Elections Void of Any Critical Discussion

    The German Bundestag election campaign has seen a total black-out of any discussion of the major crisis that is building in Europe. Nobody is mentioning that Euro crisis, ECB monetary policy, disintegration of the EU, refugee crisis, pension crisis, the municipalities on the brink of insolvency, or the drastic increases in taxation coming AFTER the election that will only lower disposable incomes and extend deflation.
    The politicians, and the press, are in full swing to hide the real trend at foot. The press is running stories why the Germans Love Merkel, yet she has never won even 40% of the popular vote. Even the press outside of Germany is in on the ‘selling’ of Merkel because she is the leader of Europe – good – bad – indifferent.
    Perhaps the monetary policy of the ECB has set the stage for a serious monetary crisis over the coming years that will seriously disrupt the German economy, in one way or another, depending upon the industry. Mario Draghi has experimented with negative rates which has kept the Eurozone governments on life-support – but they have not used the time to reform anything.

    This post was published at Armstrong Economics on Sep 23, 2017.


  • London Bans Uber; Company Vows Court Challenge

    In a stunning blow to the world’s most valuable private company (purportedly worth some $70 billion), London’s taxi and livery car regulator has said it won’t renew Uber’s operating license once it expires at the end of the month. The regulator said Uber “is not fit and proper to hold a private hire operator license.”
    “TfL considers that Uber’s approach and conduct demonstrates a lack of corporate responsibilit in relation to a number of issues which have potential public safety and security implications. These include: It’s approach to reporting seriouis criminal offences. It’s approach to how medical certificates are obtained. It’s approach to how Enhanced Disclosure and Barring Service (DBS) checks are obtained. It’s approach to explaining the use of Greyball in London, software that could be used to block regulatory bodies from gianing full access to the app and prevent officials from undertaking regulatory or law enforcement duties.”

    This post was published at Zero Hedge on Sep 22, 2017.


  • There’s a Bubble in New York City Taxi Medallions

    It’s as old as time: taking on debt to fund a sure thing. Be it houses, stocks, cryptocurrencies, tulip bulbs or taxi medallions. Winnie Hu tells the current tale of woe brilliantly for The New York Times. Big city taxi medallions were once considered to be good as gold. Ms. Hu writes,
    Sohan Gill once saw his medallion as such a good investment – ‘better than a house’ – that his wife bought two more in 2001. Now they cannot find enough drivers for the cabs because business is so bad. And Mr. Gill, 63, who had retired from driving, had to go back on the road. ‘How many more years am I going to drive to take care of these medallions?’ he asked.
    That sounds so much like Las Vegas 2005. Why own one house? Buy two more. Now retirement is put on hold.
    A full blown medallion crash is unraveling in New York City as Ms. Hu explains.
    Since 2015, a total of 85 medallions have been sold as part of foreclosure proceedings, according to city records. In August alone, 12 of the 21 medallion sales were part of foreclosures; the prices of all the sales ranged from $150,000 to $450,000 per medallion.
    A medallion being essentially a license to drive a cab, $150,000 to $450,000 doesn’t seem like the bottom, however at the peak. 2014, a medallion went for $1.3 million. By the way, Uber was founded in 2009, but New York cab owners either didn’t get the memo, or didn’t understand the implications.

    This post was published at Ludwig von Mises Institute on Sept 22, 2017.


  • The Agony of the Welfare State, Finnish Style

    The title of this post – minus the reference to Finland – is shamelessly copped from a prescient essay that Ludwig von Mises wrote in 1953. In his article Mises pointed out that in Great Britain and Europe, the system of progressive taxation was already confiscating nearly the entire ‘surplus’ incomes of the successful capitalists and entrepreneurs, meaning that higher tax rates would no longer produce additional funds to finance these countries’ ever-expanding welfare states. ‘Henceforth,’ Mises foretold, ‘the funds of the beneficiaries themselves have to be tapped if more handouts are to be made to them.’
    Today things have gotten far worse than even Mises foresaw. For now it is becoming evident that the ‘beneficiaries’ of the most advanced welfare states are not reproducing rapidly enough to pay for the benefits that they are receiving and are therefore ‘endangering’ the ‘long-term survival’ of the ‘more generous’ welfare states. A notable example is Finland, which faces a ‘massive baby problem.’ Thus, in 2016, Finland recorded the lowest number of newborn babies in 148 years, or since the great famine of 1868. The Finnish fertility rate has fallen to 1.57 per woman and the number of people under 20 years of age as a percentage of the working age population is the lowest among Nordic countries at less than 40%, down from 60% in 1970.

    This post was published at Ludwig von Mises Institute on September 22, 2017.


  • Why is NASA Covering Up Elon Musk’s Mistakes?

    On June 28th, 2015, Elon Musk’s SpaceX Falcon 9 rocket launched a Dragon resupply ship not into space, but rather into the Atlantic Ocean. It was a catastrophic failure that cost taxpayers $112 million. The payload that was meant to resupply the International Space Station (ISS) went up in a huge plume of smoke and flames. However, even though SpaceX did not complete their mission, they still received all but twenty percent of the full payment. Standard NASA protocol is to release a report on every launch accident, but to this day – two years later – there is still no formal statement as to what went wrong on the SpaceX accident.
    Per NASA, there won’t be one released anytime soon. The Agency recently announced that it will in fact not publicly release a report on their investigation into the disastrous explosion of the SpaceX Falcon 9 rocket. They had originally committed to reporting their results by the summer of 2017, but have instead passed the buck to the FAA.
    ‘Since it was an FAA licensed flight, NASA is not required to complete a formal final report or public summary, and has deferred any additional products related to the matter at this time,’ the agency’s Public Affairs Office (PAO) stated. ‘The data is important for historical purposes, but the mishap involved a version of the Falcon 9 rocket, the version 1.1, that is now no longer in use.’ Apparently, the fact that SpaceX is no longer using that version of the Falcon 9 after this $112 million ‘mishap’ of taxpayer funds means the American taxpayers have no right to know what happened. Strangely, that storyline did not work for a competing firm’s similar failure that occurred eight months prior.

    This post was published at Ludwig von Mises Institute on September 22, 2017.


  • A Look At How Nestle Makes Billions Selling You Groundwater In A Bottle

    A few weeks ago we shared with readers a lawsuit filed in Connecticut against Nestle Waters North America, Inc. alleging that the water they marketed as Poland ‘Natural Spring Water’ was actually just bottled groundwater…the same water that runs through the taps of many American households.
    Now a new investigation from Bloomberg Businessweek reveals how large water bottling companies choose their plant locations based not on the steady supply of pristine, natural drinking water, as their labels and other marketing campaigns would lead you to believe, but based on which economically depressed municipalities offer up the most tax breaks and have the most lax water laws.
    As an example, even in the drought stricken state of California, Bloomberg notes that Nestle was able to strike a sweetheart 20-year supply agreement with the U. S. Forest Service to pay roughly $0.000001 for the water in each bottle that consumers blindly drop a couple bucks to purchase.

    This post was published at Zero Hedge on Sep 21, 2017.


  • This $700 Billion Public Employee Ticking Time Bomb Is Only 6.7% Funded; Most States Are Under 1%

    We’ve spent a lot of time of late discussing the inevitable public pension crisis that will eventually wreak havoc on global financial markets. And while the scale of the public pension underfunding is unprecedented, with estimates ranging from $3 – $8 trillion, there is another taxpayer-funded retirement benefit that has been promised to union workers over the years that puts pensions to shame…at least on a percentage funded basis.
    Other Post-Employment Benefits (OPEB), like pensions, are a stream of future payments that have been promised to retirees primarily to cover healthcare costs. However, unlike pensions, most government entities don’t even bother to accrue assets for this massive stream of future costs resulting in $700 billion of liabilities that most taxpayer likely didn’t even know existed.
    As a study from Pew Charitable Trusts points out today, the average OPEB plan in the U. S. today is only 6.7% funded (and that’s if you believe their discount rates…so probably figure about half that amount in reality) and many states around the country are even worse.
    States paid a total of $20.8 billion in 2015 for non-pension worker retirement benefits, known as other post-employment benefits (OPEB). Almost all of this money was spent on retiree health care. The aggregate figure for 2015, the most recent year for which complete data are available, represents an increase of $1.2 billion, or 6 percent, over the previous year. The 2015 payments covered the cost of current-year benefits and in some states included funding to address OPEB liabilities. These liabilities – the cost of benefits, in today’s dollars, to be paid in future years – totaled $692 billion in 2015, a 5 percent increase over 2014.
    In 2015, states had $46 billion in assets to meet $692 billion in OPEB liabilities, yielding a funded ratio of 6.7 percent. The total amount of assets was slightly higher than the reported $44 billion in 2014, though the funding ratio did not change. The average state OPEB funded ratio is low because most states pay for retiree health care benefits on a pay-as-you-go basis, appropriating revenue annually to pay retiree health care costs for that year rather than pre-funding liabilities by setting aside assets to cover the state’s share of future retiree health benefit costs.

    This post was published at Zero Hedge on Sep 20, 2017.


  • Loving Our Debt-Serfdom: Our Neofeudal Status Quo

    Democracy (i.e. political influence) and ownership of productive assets are the exclusive domains of the New Aristocracy. I have often used the words neoliberal, neocolonial and neofeudal to describe our socio-economic-political status quo. Here are my shorthand descriptions of each term: 1. Neoliberal: the commoditization / financialization of every asset, input (such as labor) and output of the economy; the privatization of the public commons, and the maximizing of private profits while costs and losses are socialized, i.e. transferred to the taxpayers. 2. Neocolonial: the exploitation of the domestic populace using the same debt-servitude model used to subjugate, control and extract profits from overseas populations. 3. Neofeudal: the indenturing of the workforce via debt and financial repression to a new Aristocracy; the disempowerment of the workforce into powerless debt-serfs. Neofeudalism is a subtle control structure that is invisible to those who buy into the Mainstream Media portrayal of our society and economy. This portrayal includes an apparent contradiction: America is a meritocracy–the best and brightest rise to the top, if they have pluck and work hard– and America is all about identity politics: whomever doesn’t make it is a victim of bias.

    This post was published at Charles Hugh Smith on WEDNESDAY, SEPTEMBER 20, 2017.


  • “If This Trade Doesn’t Work, You Can Blame Me…”

    In July I wrote a piece titled, ‘Is the real US Dollar Pain Trade Lower?’. At the time the US dollar was sucking wind, but many traders were still playing for a bounce. The prevailing wisdom was that the Fed’s tighter monetary policy, combined with Trump’s business acumen, along with a tax reform bill, and topped off with a massive short covering surge from emerging market US dollar denominated issuers, would ensure the two-year US dollar rally would continue.

    This post was published at Zero Hedge on Sep 20, 2017.


  • Russian Depositors On Edge After Second Major Bank Fails In Under A Month

    If once is happenstance, twice is coincidence, and three times is a full-blown collapse in the financial system, then Russia may be getting close.
    Just three weeks after Russia bailed out its largest and very politically connected private bank, Otkritie, after an unexpectedly acute bank run resulted in the bank’s near-collapse, already nervous Russian depositors shifted their attention to another domestic lender, and earlier today Russia’s B&N Bank, the country’s 12th biggest lender by assets, also sought a bailout from the central bank. While it is unclear how much this bailout would cost Russian taxpayers, when the central bank took over Otkritie last month, it said it might need up to $6.9 billion, the biggest ever bailout in the country.
    B&N Bank, which is controlled by Russian oligarch Mikhail Gutseriev and was not on the central bank’s list of systemically important lenders, said it had under-estimated the problems within the banks it had bought during an expansion drive. ‘Our objective is, with the support of the central bank … to conduct an effective financial rehabilitation of the bank,’ said Mikail Shishkhanov, who was named as chairman of B&N Bank, whose assets account for 2 percent of the Russian banking system, according to ratings agency Fitch.

    This post was published at Zero Hedge on Sep 20, 2017.


  • New Survey Shows Just How Hard It Is To Make Ends Meet: ‘Half Of People Need Credit Cards Just To Make It To Their Next Payday’

    A new survey was done in the United Kingdom and it shows just how hard it is for young people to survive paycheck to paycheck. Almost half of those surveyed admitted to needing credit to make ends meet until they get paid again.
    More than half of young women have to borrow to make their funds last to the end of the month, highlighting the impact of stagnating wages, insecure work, and rising prices like taxation on millennials. A survey of 4,000 people aged 18-30 shows that 51% of young women and 45% of young men regularly use credit to stretch their finances until payday. The report also found that a quarter of these young people in the UK are constantly in debt.
    When asked how they borrow to make ends meet, one in five claimed they used overdraft credit or borrowed from family members. The next most common form of borrowing was the use of credit cards. The Young Women’s Trust, which commissioned the representative sample of young people, said many of those questioned in the survey also worked extra hours or skipped meals to make their cash stretch to the end of the month.
    The survey was conducted after a growing number of people began asking for help from debt charities with personal debts and monthly bills.

    This post was published at shtfplan on September 20th, 2017.


  • Finnish Politician Tells Women ‘Be Patriotic, Have More Babies’ As Birth Rates Crashes To 150 Year Lows

    For years, the Japanese government has been desperately trying to encourage its citizenry to have more sex to combat the collapsing demographics the nation faces, trying guilt (blasting their “sexual apathy”) and punishment (imposing a “handsome tax” to make lief more even for ugly men), to no avail.
    Now it appears Finland is suffering a similar fate. As Bloomberg reports, Finland, a first-rate place in which to be a mother, has registered the lowest number of newborns in nearly 150 years.

    The birth rate has been falling steadily since the start of the decade, and there’s little to suggest a reversal in the trend.
    Demographics are a concern across the developed world, of course. But they are particularly problematic for countries with a generous welfare state, since they endanger its long-term survival.

    This post was published at Zero Hedge on Sep 20, 2017.


  • Illinois Unpaid Vendor Backlog Hits A New Record At Over $16 Billion

    Back in July, the state of Illinois narrowly avoided a junk bond rating with a last minute budget deal that included a 32% in hike in income taxes. Republican Governor Bruce Rauner vetoed the budget and called it a “disaster,” but both houses of the state legislature voted to override his veto. Meanwhile, S&P and Moody’s were apparently both convinced that the budget deal was sufficient for the state to remain an investment grade credit and all lived happily ever after, if just for a few months. Per CNN:
    Illinois narrowly avoided becoming the first U. S. state ever slapped with a “junk” credit rating from S&P Global Ratings after it passed its first budget in more than two years.
    The ratings firm removed the threat of an imminent downgrade for the fifth most populous state in the country on Wednesday, ruling that the Illinois budget deal has lowered the risk of a “liquidity crisis.” Now the state is rated one-notch above “junk” territory, and S&P said the odds of a downgrade within the next year have “substantially diminished.”

    This post was published at Zero Hedge on Sep 19, 2017.


  • Who Gets Hit by Mortgage Losses in Harvey and Irma Areas?

    ‘We need to ask for a policy change because the burden with these losses is too big.’ Somebody is going to pay for losses on mortgages of homes that were destroyed by Hurricanes Harvey and Irma. It’s a just a question of who.
    The taxpayer is on the hook, along with some investors. But then there are the servicers of mortgages guaranteed by the Government National Mortgage Association, for short Ginnie Mae. The largest of them is Wells Fargo, but they mostly include smaller non-banks such as PennyMac and Quicken Loans. The amounts could be large. And now they’re asking for a bailout of sorts.
    In total, 4.3 million properties with nearly $700 billion in outstanding mortgage balances are located in FEMA-designated disaster areas in Texas and Florida, according to a preliminary estimate by Black Knight Financial Services:
    Disaster areas of Hurricane Harvey: 1.18 million mortgaged properties with $179 billion in unpaid mortgages. Disaster areas of Hurricane Irma: 3.14 million mortgaged properties with $517 billion in unpaid mortgages. Many of these homes survived mostly unscathed. So the mortgage balances of homes that have been severely damaged or destroyed remain uncertain but are significant.

    This post was published at Wolf Street on Sep 19, 2017.


  • India Gold Imports Nearly Triple in August Despite Tax Increase and Government Regulations

    Despite rising prices, a tax increase, and government attempts to tighten regulation of the jewelry industry, gold continues to flow into India.
    Gold imports into the country nearly tripled year-on-year in August. An estimated 60 tons of the yellow metal flowed into the Asian nation last month, up from 22.3 tons in August 2017. This continues a trend for the year. Over the first 8 months of 2017, India’s gold imports climbed to 617.5 tons, a 158% increase over 2016.
    As a Reuters report notes, the Indian gold market has an impact on the broader world market.
    Higher purchases by India, the world’s second biggest consumer, could support global prices, trading near their highest level in a year.’
    The continued flow of gold into India demonstrates the resilience of the market in that country. On July 1, the Indian government replaced a labyrinth of taxes with a nationwide 3% Goods & Services Tax (GST). The World Gold Council called it the ‘biggest fiscal reform since India’s liberalization in the early 1990s.’ The WGC said the new tax structure would ultimately increase demand for gold in India, but analysts braced for a short-term dip in imports as the tax went into effect and the market adjusted to the new system.

    This post was published at Schiffgold on SEPTEMBER 18, 2017.


  • Johnny Appleseed: Land Speculator, Alcohol Dealer, Capitalist

    Similar to the English legend of Robin Hood, the character Johnny Appleseed has evolved over time into a progressive icon. In the former, the famed outlaw, made an enemy of the government by reclaiming unjust taxes, became a socialist folklore hero who ‘stole from the rich and gave to the poor.’ Johnny Appleseed, an American legend, is depicted as a selfless peripatetic, traveling the country planting apple trees so that nobody would go hungry. He lived an ascetic lifestyle, preached the gospel of Jesus Christ, and refused to hurt any of God’s creatures (one apocryphal tale claims that he angrily threw away his shoe out of guilt for having accidently stepped on a worm).
    Some of these fabled characteristics are based in truth. Johnny Appleseed did live well below his financial means, for example, giving people the false impression that he was a poor man. But Johnny Appleseed’s true accomplishments – the successful accumulation of wealth through entrepreneurial speculation and calculated claims to the private property he developed with his apple seeds – have been entirely omitted from the legends taught to schoolchildren. Accurately told, the life of Johnny Appleseed is a capitalist success story.
    Johnny Appleseed Brings Alcohol to the Frontier
    The legend of Robin Hood was a fiction born out of a different fiction, but the legend of Johnny Appleseed is a fiction born out of a real person. John Chapman was born on September 26, 1774, the son of a Revolutionary War veteran who would later encourage his son to become an orchardist.

    This post was published at Ludwig von Mises Institute on Sept 17, 2017.


  • Cops’ massive salaries are robbing taxpayers blind

    Knocking over banks is for amateurs.
    Local cops in towns and counties around New York state are robbing taxpayers blind with astronomical yearly salaries – including one officer who pulled down $442,000, a new report shows.
    Tom Donnelly, who retired as a Ramapo school safety officer in August, earned the investment-banker-sized paycheck over a 12-month period ending in March – making him the highest paid local cop anywhere outside New York City, according to a report from the Empire Center.
    By contrast, Gov. Cuomo made $179,000 last year.
    The study showed that local cops like Donnelly are the highest-paid group of government employes in municipalities excluding the five boroughs.

    This post was published at New York Post on September 13, 2017.