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Archive for November 18th, 2012

If there was a prize for fighting back against tax authorities, the Italians would probably deserve first place. I’m not aware of any other country where tax offices get firebombed. The Italians also believe in passive forms of resistance, with tens of thousands of boat owners sailing away to protect themselves from the government.

But the Spanish are beginning to get into the swing of things, perhaps because they are increasingly upset by the plethora of tax hikes imposed by the supposedly right-of-center government in Madrid.

Here’s part of a report from NPR about a new tax revolt on the Iberian Peninsula.

When the Spanish government hiked sales tax on theater tickets this past summer, Quim Marcé thought his theater was doomed. With one in four local residents unemployed, Marcé knew that even a modest hike in ticket prices might leave the 300-seat Bescanó municipal theater empty.

So what did he do to protect the theater from fiscal destruction?

Taxes are revolting, so why aren’t you?

“We said, ‘This is the end of our theater, and many others.’ But then the next morning, I thought, we’ve got to do something, so that we don’t pay this 21 percent, and we pay something more fair,” says Marcé in Spanish. …He…suddenly had an idea: Instead of selling tickets to his shows, he’d sell carrots. “We sell one carrot, which costs 13 euros [$16] -– very expensive for a carrot. But then we give away admission to our shows for free,” he explains in Spanish. “So we end up paying 4 percent tax on the carrot, rather than 21 percent, which is the government’s new tax rate for theater tickets.” Classified as a staple, carrots are taxed at a much lower rate and were spared new tax hikes that went into effect here on September 1.

Very clever. Senor Marcé is getting lots of praise for his novel approach, though it’s unclear whether the ravenous tax bureaucrats will come up with some sort of ruling to squash the tax revolt.

Spanish media have dubbed this the “Carrot Rebellion,” and the Bescanó theater has won kudos from arts advocates nationwide. Shows are sold out. …Marcé, the theater director, says he consulted a lawyer before launching his carrot sales. He’s got backing from the local mayor too. And no one has stopped him so far. …He says he’s a little worried the government might declare it illegal to sell carrots at theaters. But dozens of foods are considered “staples” and taxed at only 4 percent. So if that happens, Marcé says he might switch to selling tomatoes instead.

And if he has some leftover tomatoes that are rotten, perhaps they can be used – along with spoiled eggs and moldy cabbage – to express appreciation for any tax collectors that happen to visit (I won’t say what the carrots can be used for).

So why doesn’t the title of this post award “three cheers” for this Spanish tax revolt?

Well, as much as I admire non-compliance when tax systems are too onerous, I suspect that these Spaniards are protesting against the idea that they should pay for big government, but I wouldn’t be surprised to learn that they very much support a bloated welfare state if someone else is picking up the tab.

In other words, they’re probably hypocrites, and I wouldn’t be shocked to learn that their Irish and Greek compatriots also are protesting for the wrong reason.

Moreover, it’s not specified in the article, but I’m quite certain that the Spaniards actually are protesting in favor of tax distortions. The 4 percent tax on carrots and other “staples” presumably is a special exception to the normal value-added tax of 21 percent.

If they were protesting the VAT, I would give them three cheers, but if they’re simply protesting the fact that theater tickets are now treated the same as most other forms of consumption, then I’m tempted to give this tax revolt only one cheer.

But I’ll still give them two cheers because I’m in favor of just about anything that will reduce the amount of money diverted to finance government.

That’s because the real fiscal problem, in Spain and the United States, is that government is far too big. And trying to curb the rapacious appetites of politicians with a tax hike is akin to trying to cure a group of alcoholics by giving them the keys to a liquor store.

P.S. The greedy Spanish government may have jacked up some tax rates so high that they could be beyond the revenue-maximizing point, though I doubt the politicians care. Heck, even international bureaucracies such as the IMF have figured out that it’s self-destructive to push tax rates so high that governments lose revenue.

P.P.S. Just to cover my you-know-what, allow me to take this opportunity to stress that maximizing revenue should not be the goal of tax policy. I’m a big fan of the Laffer Curve, to be sure, but policy makers should target the growth-maximizing point.

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While I have great admiration and affection for the English people, most of them are downright daft on the issues of guns. And the politicians are the worst of the lot, having imposed draconian gun bans.

But they’ve gone way beyond run-of-the-mill gun control.

This is the nation, for instance, that arrested a man for the “crime” of turning in a gun found on his property. Yes, you read correctly. I’m not making that up.

The government is so bloody clueless on this issue that we’ve seen mind-boggling examples of anti-gun political correctness.

Okay, I cheated. The last example was about a knife rather than a gun, but I think it underscores the central point that the UK government believes in a helpless and passive citizenry.

But perhaps, in a small way, we’re seeing a bit of progress. It seems that a few people realize that this culture of surrender and appeasement isn’t always a good idea.

At least when it comes to thwarting pirates. Here is an excerpt from The Economist about a big decline in attacks off the Horn of Africa.

…the fall in the number of successful hijackings since the peak of 2009-11 has been dramatic. The International Maritime Bureau, a body that fights shipping crime, counted 219 cases of pirates trying to board a vessel in 2010 and 236 in 2011. This year’s total is just 71, against 199 for the same period last year. Successful seizures are down from 49 in 2010 to 28 in 2011 and only 13 this year.

Want to take a wild guess about the reason?

Five out of five pirates surveyed prefer unarmed victims

Yup, you’re right. Guns.

…the biggest game changer of all is…that more than a quarter of vessels now carry armed security guards. The shipping industry used to oppose this, fearing that armed guards would escalate violence. But not a single vessel with guards has been boarded. Usually a warning shot is enough to deter the pirates. Lieut-Commander Sherrif says: “The pirates go to sea to make money, not die in a firefight.” BIMCO, the biggest international shipping organisation, has recently produced a standard contract for the industry, known as GUARDCON. Most of the security firms supplying guards are British. Admiral Rix says that his company hires mostly former Royal Marines.

Let’s emphasize part of that passage. It says that “not a single vessel with guards has been boarded.”

That’s a perfect batting average. As John Lott might say, this is an example of “more guns, less crime.” What a novel idea.

Now for the bad news. I doubt that the writers at The Economist or the politicians at Westminster will draw the right lesson from any of this.

So we still have a long way to go before we liberate the British people from the anti-gun superstitions of the political elite. Maybe we should share these very clever pro-gun images (here, here, here, here, here, and here) with our friends on the other side of the Atlantic.

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