On the web since 1997
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On the web since 1997 |
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Al Bundy SyndromeKyle Hodgens / Powerhouse Profits -- Shall they never learn? The economic powerhouses in continental Europe, Germany and France, are quickly loosing credibility within their own union. The once powerful - yet still influential - Franco/Germans have turned themselves into whiners - well, captained themselves deeper into their ever growing whinedom.Like a middle aged man who can no longer swing a baseball bat, or throw a football like he used to, France and Germany are living in the past. Experiencing their mid-life crises, the two have opted to complain of unfairness - rather than face reality. "We used to be great; we used to be somebody, these young punks don't know nothin'." Call it Al Bundy syndrome (Married With Children, classic 80's sitcom). Just as Al Bundy's middle aged life revolved around his four touchdown game while in high school, France and Germany live off their past conquests, their past glories. But, dear reader, the times they are a changin'. The young guns in Europe are teaching old Europe a lesson in economics; a lesson in taxes that our country learned over 200 years ago. While France and Germany beg businesses to come to their nations, beg them even to stay there, the New Europe of the East is reaping the benefits of more open, capitalistic markets - and their people are becoming increasingly employed. Countries like Hungary, Latvia, Lithuania, Slovakia and Poland have learned the lessons of communism and have opted to turn into business friendly environments. With the exception of Ireland, Eastern European countries have the lowest corporate tax rates in the EU. This is translating into a business boom in the East. Companies like Volkswagen and Siemens, symbols of German economic prowess, are relocating some operations from the near 40% tax strangle of Germany to Eastern Europe, thereby cutting their rates nearly in half. Peugeot-Citroen, the French auto maker is opening a factory in tax friendly Slovakia transforming the Eastern European nation into one of the world's greatest per capita auto producers. The list of companies fleeing France and Germany goes on and on. After the collapse of communism, Eastern Europe was in shambles. Unemployment rates were some of the highest in the civilized world and prospects for the future were dim. The leaders of Eastern Europe woke up one morning and decided to follow the business model of the nation that set them free; lower taxes and allow competition to dictate employment. They've learned that a socialized economy only benefits the lowest common denominator and creates an environment of lethargy and despair. When businesses saw what was going on in the East, they saw opportunity! The lower tax arena of Eastern Europe has created a two fold benefit to employment. Obviously as business floods to the East, jobs are instantly created. But a secondary benefit of lower taxes allows these businesses to cut overhead, hire beyond their Old European means and reinvest - creating additional employment opportunities. Don't be surprised when Eastern European nations become the engine of the EU; that is of course if the EU even exists in the future - the cracks are beginning to show. Fuming mad at the business drain in Old Europe, France and Germany have decided to fight back - in a typical Franco-German manner. Rather than competing with the business friendly East by slashing corporate taxes, the two nations have decided that the solution to their growing problem is to force the Eastern nations into raising their taxes. After all, it's just not fair. They used to be somebody; Eastern Europe should have some respect. Four touchdowns in one game! Anyone who's ever studied logic can tell you that Old Europe is doomed to fail. Their stubborn methodology is quickly turning them into dinosaurs. Instead of whining like has-beens, France and Germany should consider competing in the open tax market - but that might mean increasing the average work week - and perhaps even cutting retromingent social benefits. This is bad news for bohemians - less time sipping latte and smoking cigarettes at the café and more time working. I don't think they'll stand for it. Luke Hodgens is the editor of |
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