Tags: fiscal | cliff | tax | France

Here Comes the Tax Grab — Globally

By    |   Wednesday, 28 November 2012 07:43 AM

Folks, hold on to you wallets!

Uncle Sam’s coming pick’ in it before you know it. And it is not just in the United States, but also globally. Should you complain or get in the way, they are also crafting laws where it would be considered a felony to oppose their draconian laws and you can be threatened with jail time along with hefty fines. When governments go bankrupt, this is a very common way of keeping the masses in check and stifling complaints and voices.

Fiscal cliff, debt reduction, balancing the budget — no matter what name you give it, it means less money in your pocket and more in the government’s pockets. There are fast and furious meetings being held behind closed doors and in smoky back rooms where deals are being cut to enable the government to continue the spending as if money is going out of fashion.

How many of you really believe that the meetings being held off camera are really about cutting spending and controlling the budget in the right fashion? I am confident of a few things I believe will be unfolding in the next few weeks.

The fiscal cliff will be deferred. It will not be solved and corrected, but feeble attempts to reach a consensus will be made, and then the can will get kicked down the road. The real attempts at correcting the ills of the country will once again be postponed, not resolved.

So if there will not be real reforms and spending will not really be cut, what will happen?

As deficits spiral upward, the government will want to collect more taxes and increase its revenue so that it can claim that its efforts to control deficits are working. As tax revenues increase and some spending is cut, the government will happily claim victory.

Unfortunately, what happens here in the United States is always a green light for various economies around the world to do the same. In fact, some countries are already taking this possible outcome from the U.S. playbook and executing their own deeds.

Let’s take France as a classic example of how business can really be killed. ArcelorMittal is the largest steel and aluminum manufacturer in the word, with headquarters in Luxemburg. The firm has been complaining about the high taxes and unfavorable business environment in France ever since the new socialist government took office. ArcelorMittal has reached its limits of profitability due to the high taxes and has threatened shutdown if the laws are not eased up and businesses allowed to grow.

Instead of helping businesses, France has come out swinging — calling CEO Lakshmi Mittal a traitor of France and one who does not respect the interests of France. The government is seeking suitors who will help drive Mittal out of France and has basically asked him to leave. France is branding him as unpatriotic.

What is the loss of France will soon become the gain of countries that are anxiously waiting to welcome Mittal and his steel mills into their own countries.

I am fairly sure these countries will be in Asia, where he will be welcomed with open arms.

Capital, money and entrepreneurs go where they are treated well. France is about to lose around 100,000 jobs and send a very wrong message to the world. But being bankrupt often begets bad behavior.

Let’s move our capital to where it is treated well and we get good yields. Asia is a great destination with yields between 8 percent and 15 percent, depending on the risk profile and country risk.

More about this next time.

© 2019 Newsmax Finance. All rights reserved.

1Like our page
Folks, hold on to you wallets! Uncle Sam’s coming pick’ in it before you know it. And it is not just in the United States, but also globally.
Wednesday, 28 November 2012 07:43 AM
Newsmax Media, Inc.

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved