Monday, November 22, 2004

Does he know what he is talking about?

The Center for Freedom and Prosperity runs one of the most interesting blogs: The Market Center Blog. It rounds up news from all over the world about taxation and protectionism, showing without a single exception how harmful these are for the economy. As their name makes it clear, they are devoted to the cause of free-market economy and free trade.

Naturally enough, their reportage of the EU is rarely positive, though they sometimes applaud individual proposals. However, they have been finding it difficult to work out what the incoming Commission will be like. Working on the assumption that the East Europeans will bring in new ideas because of their experience of introducing free-market economic measures and their insistence on keeping a low level of corporate tax, they have found the various shenanigans rather bemusing.

Their report on the incoming Tax Commissioner László Kovács (formerly the incoming Energy Commissioner and some years before that a Communist apparatchik) is instructive. It seems that the new Commissioner said the right thing and the wrong thing at the same time. Quoting Tax-News from Brussels, the blog summarizes:
“The European Union's Tax Commissioner-in-waiting, Laszlo Kovacs, revealed yesterday that he is in favour of harmonising the corporate tax base across the union, although rejecting a proposal supported by the French and Germans for more centralised setting of tax rates. ...the former Hungarian foreign minister stopped short of advocating the placing of more control over tax rates in the hands of the Commission, arguing that "fiscal competition is not damaging as such. I support a degree of tax competition between member states. I do not see a need for community action on corporate tax rates," he commented, referring to complaints from France and Germany that large corporate tax cuts in the new member states of Eastern Europe amounts to unfair tax competition.”
So is he in favour of harmonizing or is he not? Could it be that he, as he apparently admitted to MEPs in private conversation, simply does not know what he is talking about?

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