Jurisdictions around the world are running out of money. That’s because they waste the tax revenue they get, and they can’t get more revenue because growth is slow.
Of course, imposing more taxes slows growth even more, but that never seems to deter governments from trying. Meanwhile, debt burdens grow faster than the economy so taxes can’t keep up. It’s all heading for a disaster.
One response has been to find new things to tax. When you can’t raise existing taxes on income, property and estates, you can always tax gasoline, bridges and tunnels. But even these old reliables are near the breaking point.
New York is imposing “congestion fees” on drivers in Midtown Manhattan (on top of massive bridge, tunnel and highway tolls you pay before you even get that far). Connecticut is imposing a state property tax on top of town property taxes. (This will just drive the wealthy in Connecticut to leave the state entirely, which they are already doing).
But these tax games are not limited to towns, states or even countries. Now, according to this article, the G20 is seeking a “world tax” on digital giants such as Google, Facebook and Yahoo. The idea is that these global digital platforms are expert at avoiding tax in any single jurisdiction where they display their wares.
The solution is for all of the countries in the world to band together to impose a global tax that cannot be escaped, regardless of jurisdiction. Once the tax is collected, it can be shared among the G20 members and other countries as they see fit without having to put up with Google’s tax games.
The G20 meet in Osaka, Japan, next weekend. The new world digital tax is on the agenda. Google should get out their checkbook, and so should you.
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