Friday, November 11, 2005

Tax policy is like a road in Kildare

Charlie McCreevy is the European Union Commissioner for the Internal Market and the most recent former Irish Minister for Finance. His current role does not include any responsibility for EU tax policy but he's spouting off anyway (WSJ, subs. req'd):

Charlie McCreevy, told a business group [in Brussels], "I am emphatically opposed to [European Union] tax harmonization -- be it by the front door or the back." ...
His speech came two weeks after the European Commission, the executive body of the EU, proposed a series of measures to encourage the 25 EU countries to establish the same criteria for taxing a company's profit ... Although tax policy isn't in his purview, he said he would fight any common definition of the corporate tax base, saying he hadn't taken a job in Brussels "to tiptoe about in my slippers." He added: "If I sense there are potholes ahead, I want to spot them before I walk into them -- and point them out to others."

It's odd for a politician to use such a metaphor but not close it by the analogy to filling the potholes. Anyway, the backstory here is that McCreevy has found his own portfolio too hot to handle, shying away from reviving the Frankenstein Bolkestein Directive, but sees the need to protect the Irish Republic's generous definitions of what constitutes taxable income -- a regime that sees the country earn more corporate tax revenue from Microsoft's UK operations than the UK does. Strangely enough, the UK will likely agree with this pothole-avoidance crusade of Charlie's.

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