EU Seeks to Govern Switzerland

The European Commission has published a unilateral judgement declaring that Swiss company tax law is “incompatible” with the free-trade agreement which has been in force between it and Switzerland since 1972. The Commissar for Foreign Affairs, Benita Ferrero-Waldner, claims that tax breaks for certain holding companies are equivalent to state aids and that, where these companies in fact operate throughout the EU, the tax regime should be changed. Acting under pressure from Paris and Berlin, the Commission fired an initial warning shot in September 2005, criticising the fact that holding companies enjoy tax breaks at federal level and are hardly taxed at cantonal level either. The Swiss have reacted angrily, saying that tax matters, especially the tax prerogatives of the cantons, are a matter of Swiss sovereignty and therefore not up for discussion. French Socialist Deputies have attacked the ‘predatory practices’ of tax havens – by which they presumably mean anywhere that has lower taxes than France. In fact, Switzerland does not have particularly low corporate tax: the accounting firm KPMG puts it in 13th place in the world, with a corporate tax rate of 21 per cent on profits. Equivalent rates in Central Europe, Cyprus and the Republic of Ireland are much lower but of course much higher in France (33.3 per cent) and Germany (38.3 per cent). Some cantons have much lower rates than the national Swiss average, however; Zug, for instance, has corporate tax at 16.4 per cent.

H/T The European Foundation

Spot on Kapitein

"civil servants now form their own voting bloc which ensures their constant enlargement."

 

Spot on dude. Total conflict of interest.

"Swiss company tax law is “incompatible” with the free-trade agreement"

More evidence that the EU is (and becoming more of) a protectionist block and not a free trade zone. Wait for "environmental" tariffs. Coming soon to goods and products near you!

In Response

Firstly, this is the European Union functioning at its worst: endorsing the national gain of one member at the expense of another. Switzerland happens to include German and French among its official languages, and therefore represents a haven for German and French citizens and firms seeking lower taxes who can feel at home. Notice that neither Cyprus, Ireland, nor those aforementioned Central European states are being bullied in this manner.

 

Secondly, in response to Amsterdamsky, I am in full agreement about your voting restrictions, considering that civil servants now form their own voting bloc which ensures their constant enlargement.

RE: Company Tax

Bob Doney is correct. Company tax should be zero. Companies DO NOT pay taxes because taxes are a COST which is passed on to the ultimate consumer, a real, live person. Only people pay taxes.

Here's hoping that.....

 .....The Swiss tell the EU to go pound it!....and send them a brand new kukoo clock in the process to get their message across......

Disenfranchisment of voters

The easiest way to solve this is disenfranchise voters who:

 

1)  are on welfare

2)  work for the government

3)  have been convicted of any violent crime or other serious felony

 

and voila!  You have a working democracy again with low taxes.  The US, being the first or second oldest democracy in the world (depending on how you view it, I say it is the oldest) never intended for non-tax paying citizens to vote.  No representation without taxation should be the rallying cry.

Company tax

The sane rate of tax on company profits is ZERO. Companies create wealth, jobs and the means for all of us to enjoy the good things of life. Profits represent their success in doing so. Of course it is perfectly sensible to tax distributions from companies, whether by way of dividend or otherwise, but the profits themselves should be untaxed to give an incentive for reinvestment.

And following the principle of "No taxation without representation" (remember that one!!), in a democracy companies can't be represented so shouldn't be taxed.