Robert A. Green
Registered: Nov 2007
05-05-12 06:07 PM
Sorry, I've been absent on this thread due to the tax-season deadline, reporting on the cost-basis reporting crisis, and then my vacation.
I am concerned with left-of-center parties winning in Europe. If Socialist Hollande wins in France tomorrow, it will further embolden the left parties in Europe. Like in Germany, with the left pushing harder on Merkel for including FTT in the fiscal compact - although that is still confused.
It's scary to see Labour win big in the UK a few days ago, too. If the UK turns back to being a FTT backer - as they were with Labour PM Gordon Brown - it may be a tipping point in favor of FTT. I hope Conservative PM Cameron can keep his coalition going until 2015. What could force elections much sooner?
Austerity measures won't fix Europe's problems and it will cause great pain for most voters, and loss of political capital from the right-of-center. In the end, left-of-center parties will probably win using a class warfare argument - similar to Obama in the U.S. - claiming its a trade-off of the working man and poor versus the rich. Voters will cave in to tax the rich more, and renew a more universal push for FTT. The right has lost recently in Italy, Spain, the Netherlands and more - all covered in the WSJ this week. Probably in France tomorrow, too.
Europe is not getting better, it's getting worse and it's final day of reckoning is nearer. The social-welfare-state apparatus will not give up power and benefits without a big fight and first booting right-of-center parties out of government.
If they make the fateful mistake of passing FTT, it will be their final nail in their coffin. We may see FTT, but hopefully it will be short lived and the right-of-center will come back into power. No one can ride that European debt horse for long. New taxes are hard to pass and even harder to repeal.
The scary wild card is the growing far-right Euro-skeptic parties. They won't want FTT or any taxes paid to Brussels for EU use. Who will take them into a government coalition? Hopefully, no one as was the case with the Basic Finns in Finland. Will right-of-center parties make a deal with this dangerous element?
FTT remains an official tax to be passed in the EU and blocking it remains a political game of brinksmanship. For these reasons, FTT remains a viable threat.