The OECD is going to establish a new "package" of treaties destined to clamp down on tax savings by multinational companies. That's right. You heard it right. The OECD will "clamp down" on perfectly legitimate tax savings strategies. This is nothing short of mindboggling. A supra-national organization of apparatchiks who you do not control but pay their salaries is outraged that companies are using fully legitimate means to pay less taxes… means that were put in place by… drumroll please… the OECD! That's right. The idiotic treaties that the OECD devised to "lower" the tax burden by multinationals (i.e. to "split" taxes between countries where they operate) has backfired ridiculously.
The excuse du-jour is that companies are using (and we quote) "unrealistic lending and borrowing" practices as well as transferring Intellectual Property Rights within subsidiaries and affiliated firms with low corporate taxes. Aha. Uhu. And what the heck! does "unrealistic" mean when it comes to money? The fact that a bunch of incompetent apparatchiks and bureaucrats are even asking this question is ridiculous in a world with negative interest rates!
So, Central Bankers are allowed to generate so much fiat money and debt that the entire world is doomed to an economic cataclysm of never-before-seen proportions but companies saving money from greedy governments through perfectly legal processes are to be persecuted!!!???
According to these very same apparatchiks, anywhere between 150 to 250 billion USD in tax money are "lost" every year due to these practices. Lost!? Lost! LOST!!!???
WTF!!!
Whose money is that to begin with? Peoples' money. How exactly does peoples' money suddenly become government's money??? Through the magic of more apparatchiks with guns and badges. Brute force and a (very) thin veneer of authority supported by a great deal of invalid legality.
Besides, even if we accept the twisted, convoluted and downright insulting illogic of taxation, that money was saved through perfectly legal means. Not even through the use of loopholes. No sir!
How much more ridiculous can this get? A lot more.
Governments have become truly desperate, including the USA. Anything and everything is on the table. Everything is to be grabbed. Don't believe us? We have seen the future and it is Argentina. We told you so. We keep telling you so. And we will tell you we told you so when it happens.
Basically, the retarded OECD apparatchik rules embedded in new "suggestions" and "recommendations" will dictate, yes dictate to you, that companies won't be able to write off interest payments as losses if such interests exceed certain level. Which level and how will it be determined?
Ahh grasshopper. We see that you have been listening to us. Bad citizen! Bad citizen. But good human being!
The exact interest rate threshold that will trigger such "wise" levels will be finalized after further studies. Of course. Which will be, of course, objectively determined by a bunch of bureaucrats in closed rooms. Of course. And if you believe this one, we have received a brand new shipment of bottled moon rays. Totally organic. Good for anything from hair decay to erectile dysfunction. Trust us. Just let us know if you are interested and we will send you our secret Swiss Bitcoin account number.
Camon!
Just how stupid do these apparatchiks believe people are? In a word? A lot.
Nevermind that objectivity does not exist in economic terms. But a bunch of bureaucrats deciding something subjective?
We will stick our neck out and make a prognostication: As soon as this new "magic" level of interest rates will be determined, it will become instantly irrelevant and useless.
Why? Because the economy is dynamic. Things do change, particularly with Central Bankers playing economic gods.
Look, this is not difficult. Taxation is theft plain and simple.
But if you cannot stomach this truth, we offer our explanation as to how governments steal your money, just head to Government Theft - Taxes. Ah… but you want something more specific? Fair enough. How about How Taxes Destroy Capital And Why This Is Bad? In this article you will understand why taxing "rich" corporations is a really, really bad idea. To your pocket. Personally. To you.
Now go ahead and support your government. Vote. Support the OECD and a myriad of other downright damaging organizations. Go ahead. We won't mind. It's a painful lesson you have to learn. Just one thing, don't tell us we did not warned you.
Note: please see the Glossary if you are unfamiliar with certain words.
