Germania. Confindustria. Trump ci sta strangolando. E lo fa sul serio.

Giuseppe Sandro Mela.

2017-12-07.

Si rimane sempre commossi, fino alle lacrime, quelle poche volte in cui si osserva un tedesco di Germania che riesca ad avere uno sprazzo intellettivo ed a coordinare un ragionamento che abbia almeno la parvenza della logicità.

Dopo due secoli di Hegel, quel brav’uomo che diceva che se i fatti contraddicono le teorie tanto peggio per i fatti, è infatti estremamente difficile liberarsi dall’ideologia, avere una ragionevole percezione del reale ed infine analizzarlo in modo coerente.

Quasi di norma, la devoluzione ideologica diventa possibile solo dopo aver preso una terrificante bastonata sulla testa.

*

«German business is worried that the tax plan emerging from Congress will hurt Germany’s export machine»

*

«As President Donald Trump trumpets progress on a massive tax cut for US companies, German firms are increasingly worried the reforms could put the country’s vaunted export economy at a disadvantage»

*

«The German government has to face up to competition and relieve companies of their tax burden.»

*

«The reform will invigorate exports to the US, but also intensify international tax competition.»

*

«US growth will increase on the back of rising investments and consumer spending.»

*

«The sharp reduction in the corporate tax rate will give the US a massive competitive advantage …. Tax competition will get a new dimension with Europeans forced to compete among themselves»

*

È finita un’era: se ne prenda atto.

Mr Trump ha iniziato un processo di destatalizzazione che non ammette revoche.

Se tecnicamente questo processo storico è inquadrabile nel termine di devoluzione del socialismo ideologico, nella pratica contingente, quotidiana, per l’Europa liberal e socialista saranno lacrime e sangue. Sono destinati a scomparire.

La Germania e l’Unione Europea devono ritornare nei ranghi: o lo faranno volontariamente, oppure lo dovranno fare obbligati da una guerra economica di cui non si intravede al momento la fine.

O abbassano la pressione fiscale, rinunciando alla presenza dello stato in economia, oppure crepano massacrate dagli altri sistemi economici.

E mica c’è solo l’America: la Cina è vicina, ed il suo alito lo si sente benissimo sul collo.

Lentamente, con tutto il tempo necessario, ci si sta avviando a quello che solitamente è designato come stato minimo.

---

→ Handelsblatt. 2017-12-06. Trump tax cuts worry German firms

German business is worried that the tax plan emerging from Congress will hurt Germany’s export machine.

*

As President Donald Trump trumpets progress on a massive tax cut for US companies, German firms are increasingly worried the reforms could put the country’s vaunted export economy at a disadvantage.

“The sharp reduction in the corporate tax rate will give the US a massive competitive advantage,” said Christoph Spengel, the corporate tax expert at the Center for European Economic Research in Mannheim. “Tax competition will get a new dimension with Europeans forced to compete among themselves.”

And it’s not only the United States that has the Europeans worried. The European Union Tuesday named 17 countries, including South Korea and the United Arab Emirates, as tax havens and put them on a blacklist facing possible sanctions if they don’t stop allowing individuals and companies to hide assets.

–

“The German government has to face up to competition and relieve companies of their tax burden.”

Joachim Lang, CEO, German Federation of Industries

–

German companies currently pay 28.2 percent combined corporate tax, which includes a 5 percent solidarity surcharge to pay for the reunification of Germany and a trade tax. But one of the advantages German companies enjoy is a so-called territorial tax system, which only taxes firms – many of which earn the bulk of their revenue through exports – on their earnings in Germany.

“The new federal government has to face up to competition and relieve companies of their tax burden,” said German Federation of Industry CEO Joachim Lang. Eric Schweitzer, president of the German chamber of commerce and industry, also called on the government, when a coalition is finally in place, “to reduce the country’s relatively high tax burden.”

US firms are taxed at 35 percent of their worldwide income instead of the territorial system Germany and most others use. After taking advantage of many loopholes, their “effective” tax rate is around 22 percent.  Both the House and Senate agree on switching to a territorial tax system, which would benefit companies with big overseas earnings like Amazon and Starbucks.

It is impossible to know at this stage what will emerge from a joint Congressional committee charged with reconciling the differences between the Senate and House tax bills. The tax bill that passed the Senate contains a corporate tax cut to 20 percent, but it also keeps the alternative minimum corporate tax, which could raise taxes well above the 20 percent level.

It also contains a couple of provisions that make the Germans nervous. One allows companies to expense capital investments immediately rather than using the elaborate amortization requirements that currently take several years.

“I expect that the investment tax write-off will pull investment to the US,” said Mr. Spengel.

Another concern for German and European companies is a proposed 20 percent tax when a US-based company pays a foreign entity of the same company. The Germans worry that this will be akin to the Border Adjustment Tax proposed by House Speaker Paul Ryan.

For example, VW USA might have to pay the tax on all VW cars it imports from Mexico as well as Germany. Since many US companies now source parts abroad, they are feverishly lobbying to remove the provision.

Germany’s former Finance Minister, Wolfgang Schäuble, had lobbied hard to get the transfer tax removed. But interim Finance Minister Peter Altmaier says he is now facing the same issue. “Low taxes are not prohibited as such,” he said Tuesday. “The problem with the US proposals is that there are foreign companies with branches in the US.” He added that Germany must determine whether World Trade Organization rules on double taxation are being respected.

In addition to naming 17 countries as tax havens, the EU outlined possible sanctions that could be imposed on countries that don’t take steps to end their tax haven status, but didn’t require the sanctions immediately.

“This is only the beginning and if it should turn out that sanctions are necessary, then we will speak openly about this,” said Mr. Altmaier.

The countries named as tax havens are: American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, the Marshall Islands, Mongolia, Namibia, Palau, Panama, St. Lucia, Samoa, Trinidad and Tobago, Tunisia and the United Arab Emirates.

→ Handelsblatt. 2017-12-06. For Europe, more pros than cons from Trump’s bill

US tax reform will boost European exports, but lure investments to America at Europe’s expense, writes a leading German economist.

*

The major tax reform approved by the US Senate last weekend was one of Donald Trump’s more sensible election promises. The legislation will clearly boost the US economy. Europe will also benefit in the short term, but the pressure of tax competition will increase massively, at a time when the era of zero interest rates is coming to an end.

Income tax reduction is at the core of the US tax reform, which reduces the top tax rate from 39.6 to 38.5 percent. However, the top rate only applies to income above $1 million (€840,000) instead of the current minimum of $427,000. The personal exemption is increased and tax rates are flattened, bringing relief to all taxpayers. Nevertheless, the tax reform will benefit high income earners the most. The average tax relief for all taxpayers is 1.2 percent of net income, while those with incomes in the top 1 percent will see gains of 4.5 percent. However, these figures do not take growth effects into account, or the consequences of possible spending cuts or future tax increases to compensate for revenue shortfalls.

The tax rate on corporate profits will be reduced from 35 percent to 22 percent, perhaps even 20 percent. There is also an immediate write-off for investments. Profits earned abroad by American companies are exempt from US taxation. Until now, these profits were taxable if they were transferred to the United States. Although taxes paid abroad were offset against domestic tax liabilities, the high US tax rate made it worthwhile to leave the money abroad temporarily. US companies had hoarded an estimated €1.3 billion abroad by the end of 2016.

–

«The reform will invigorate exports to the US, but also intensify international tax competition.»

–

What does this reform mean for Europe? In the short term, the economic stimulus will invigorate exports to the United States. The US foreign trade deficit will increase as a result, and calls for protectionist measures are likely to grow as well. At the same time, the reform will intensify international tax competition. The combination of a massive reduction in the tax rate and an improvement in tax depreciation creates considerable incentives to relocate investments to the US. Other industrial locations will have to react in order to remain attractive, including Germany.

Tax havens will also come under pressure, after having made a good living from the fact that US companies had incentives to avoid the high taxation of profits at home. The increased demand for capital from the United States will also lead to rising interest rates worldwide. The zero-interest period is coming to an end, which will also force Europe to make adjustments.

Europe will also notice that in all likelihood, US companies will stop relocating their headquarters abroad in order to avoid US taxation. The profits accumulated abroad will be subject to a one-off tax, regardless of whether or not they are transferred to the United States. Future foreign profits are to be exempted from taxation in the United States, a practice that is part of a global trend. In the UK, for example, taxation of foreign profits was abolished in 2009, and these profits are exempt from domestic taxation in Germany and most other OECD countries. However, the reform does not just provide tax relief, but also increases tax liabilities in some cases. Above all, the deductibility of interest is restricted in order to prevent tax avoidance through debt financing.

By instituting this reform, the US government has abandoned earlier plans to introduce “territorial” corporate taxation that is based on the country of destination. The conversion effort and the uncertainty associated with the system change were apparently too great.

---

«US growth will increase on the back of rising investments and consumer spending.»

---

What impact will the US tax reform have on the country’s economic growth and national debt? Growth will increase on the back of rising investments and consumer spending. However, the extent of these effects is controversial. The US Senate expects the effects to be relatively subdued, with gross domestic product expected to be 0.8 percent higher on average over the next 10 years than it would have been without the tax reform.

This will lead to hefty projected losses in US tax revenues, with only about one-sixth of the tax reduction being offset by growth effects. The bottom line is that the deficit will increase, reaching a peak of $207 billion in 2020.

A study by the US Tax Foundation is more optimistic, predicting a 3.7-percent increase in GDP in the long term. The difference is due mainly to the study’s expectations of stronger investment and a slower rise in interest rates. Thanks to this growth spurt, the reform would become self-financing after temporary revenue losses.