Thursday, 13 January 2011

New year's predictions

Well, only one really.

What, one may ask reasonably, could be a potential political patch that would leave the German and French governments free and willing to expand their support of the European Financial support mechanism? (stump up promises to back lots more borrowing).

Here is a tip. Keep an eye on the corporate tax rate.

Let's say I wouldn't be too surprised to see somebody float the idea that a Eurozone (maybe, at the risk of enraging the UK, EU wide) corporation tax levy.

Most likely something drafted in such a way that it prescribes a centrally remitted tax of, say, 10% (initially) on corporation profits, subject to a total corporation tax burden in any country of something like 30%.

Surprise surprise, German (and French) domiciled companies would not be subject to any additional tax. Ireland? well....