Superrich pay paltry tax in Zurich

News that 97 'Super rich' individuals have left the Swiss canton after a favourable tax treatment for rich foreigners was revoked demonstrates that unfair tax competition is alive and well. The 97 are among 201 rich foreigners that only paid an agreed amount to to canton that was far from representative of their overall global wealth. How little these individuals pay is revealed by the fact, that the departure of the 97 only led to a Swiss Franc 12.2 million diminution of the tax take. This means that each of them paid just around Sfr 100,000 a year. We do not know the aggregate wealth of these persons but we would guess that even Warren Buffett would be even more embarrassed if he could get away with the tax rate these tax fugitives paid. While the canton of Zurich is the loser, there are plenty of other Swiss cantons who still operate a tax haven on a highly selective (and discriminatory) basis. One only has to wonder what purpose the WTO or the OECD serve if they cannot stop this blatant case unfair tax competition. No wonder the Super rich 0.01 per cent are laughing all the way to the bank.

Establishment Economists helpless

By suggesting nothing else but another 'Support Package' for Greece the establishment economists admit that they are helpless when faced with a crisis such as the one Greece (and and.....) is facing. If there is no other solution in today's economic toolkit than to throw ever-increasing amounts of taxpayer's and helicopter money at a problem we might as well bin the insights of 300 years of economic thought.

Carried Interest Debate - Hairsplitting by Mankiw

Professor Mankiw admits that he is an adviser to Mitt Romney so one should not be surprised that he expends a considerable amount of energy confusing the straightforward case against a low tax on carried interest for private equity promoters with a variety of situations faced by hypothetical property investors. But the performance fee and basic management fee charged by private equity firms that predominately buy and sell existing assets can simply not be called a capital gain as there is no capital at risk. The exception is the portion of capital that has actually be invested by the managers of the pe firm. The rest simply is reward for putting in the effort to manage the fund. One problem we have to face is that the amount of this investment can easily be manipulated. Already, the insiders of the pe firms (promoters and senior management of the companies that the firms invest in) receive founder's shares (or options) at exceptionally favourable terms (something that would need closer attention by the 'limited partners', i.e. the investors who bear most if not all the costs and risks of the funds). Subsequently it can be claimed that the proceeds arising from the eventual sale of these shares (allocated at pennies) are a 'capital gain'. Maybe it would be a good idea for Professor Mankiw to let us know how he would prevent this abuse?

500 British Business Luminaries moan about 50pct tax rate

The arguments of these 500 pillars of the British Economy are laughable but also symptomatic of the feeble state of entrepreneurship that has been a factor for the relative (and absolute?) decline of British Business over the past 40-50 years. Would these businessmen really work less just to spite the government? Their income would decline even more if they would do so. Would they really cut employment or refrain from expanding the business if a good opportunity presents itself? As Warren Buffett argues over and over again, the economy in the US, for example, grew pretty fast in the 1950s and 1960s when top marginal tax rates were much higher.

How difficult is it for a country to leave the Euro?

Learned Minds can recite catalogues full of reasons why it is very difficult, even impossible, for a member state of the Euro Zone to abandon the Euro. But all the legal niceties will count for little if the decision is made to cut the Gordian Knot. While to Euro as a practical instrument is quite useful for tourists as well as businesses the boost to the economies to the member states was at best marginal during the past ten years. These days the exchange of currencies is nearly frictionless and very cheap in the day of the Internet - for private people and even more so for business purposes. But the argument that the exit from the Euro Zone would be extremely difficult and take a long time to prepare is difficult to swallow. It should be possible to declare on any weekend that the exit has been decided and that all bank accounts, financial assets and liabilities will be frozen and converted into the new currency from that moment on. Unfortunately, this analysis makes it even more likely that the Euro Zone will lose one of its members at some point in the future because any sane investor or business manager will henceforth take this possibility into account when making decisions.

Euro Summit - what they did not tell you

Scholastic scholars would have felt perfectly at home in the discussions about the Euro and the Euro Crisis. What ALL experts seem to be forgetting is the poor taxpayer and citizen who has no say at all in this. The major contributing factor to the current situation in Euroland has been totally wrong (one might even say foolhardy and/or idiotic) decision making by the 'fathers' of the Euro (who by now all enjoy their pampered life paid out of generous pension the bill for which is picked up by their hapless victims). Without the strainghtjacket of the Euro individual countries or banks would have gone bankrupt by now and life would go on without creating too much systemic danger for all industrial countries.

Bloomberg: Sandblasted 'Beauty' and Property 'Investor' solve Euro Crisis

When someone with no background or experience in Europe pontificates about the Euro Crisis one wonders what the point of Business Television is. Maybe Mort Zuckerman plays golf with Michael Bloomberg but otherwise we are at a loss what his special insight about the Crisis should be. Maybe the 0.001 % really know something that could help solve the World's problems - or maybe they are just part of the problem?