Three articles today on global trade: Taxes, farm subsidies and the debate about whether trade improves the lives of average people.
It's funny. Every time i read articles like these, I think about the people who chant "free trade." Given all the rules and restrictions that exist, i wonder how anyone can get away with calling any of our systems "free".
Yet another advantage corporations have over regular citizens. Microsoft got singled out here but they are far from the only company doing this. The rules for business are clear, but is this behavior good for citizens? Dont forget that if the businesses dont pay taxes we either pay more ourselves or go without. Then again, if you look at our schools, bridges and levees, we seem to be used to going without.
Irish Subsidiary Lets Microsoft Slash Taxes in U.S. and Europe
Tech and Drug Firms Move Key Intellectual Property To Low-Levy Island Haven
Center of Windows Licensing
November 7, 2005
DUBLIN -- A law firm's office on a quiet downtown street here houses an obscure subsidiary of Microsoft Corp. that helps the computer giant shave at least $500 million from its annual tax bill.
The four-year-old subsidiary, Round Island One Ltd., has a thin roster of employees but controls more than $16 billion in Microsoft assets. Virtually unknown in Ireland, on paper it has quickly become one of the country's biggest companies, with gross profits of nearly $9 billion in 2004.
Ireland's citizens may not have heard of Round Island One, but they benefit greatly from its presence. Last year the unit handed the government of this small country of four million citizens more than $300 million in taxes.
The citizens of other nations where Microsoft sells its products are less fortunate. Round Island One provides a structure for Microsoft to radically reduce its corporate taxes in much of Europe, and similarly shields billions of dollars from U.S. taxation. Giant U.S. companies whose products are heavily based on their innovations, such as technology and pharmaceutical firms, increasingly are setting up units in Ireland that route intellectual property and its financial fruits to the low-tax haven -- at the expense of the U.S. Treasury.
Much of Round Island's income is licensing fees from copyrighted software code that originates in the U.S. Some of the rights to these lucrative assets end up in Ireland via complex accounting rules on intellectual property that the Treasury is now seeking to overhaul. The Internal Revenue Service said it is also looking closely at how companies account for such transactions.
Shine a little light on things and what do you see? This issue of farm aid is a huge issue in our country with pretty much the same reality: huge farms, not family farms, reap the benefits of our tax largesse.
EU to discuss listing beneficiaries of farm aid
November 7, 2005
BRUSSELS -- The European Union is expected this week to broach publishing for the first time who receives farm subsidies across the bloc, a proposal that could magnify growing global pressure to do away with farm protections.
Most EU countries have kept their lists secret, citing individual privacy concerns despite the distribution of large sums of public money to the agriculture sector. Farm supports represent the EU's biggest public outlay, and France is the biggest recipient.
Recent disclosures in some countries have shown the biggest, richest landholders tend to receive the biggest subsidies, including large commercial concerns and some royal families, though subsidies often are promoted as being aimed at small family farms. In global trade talks, the EU and France have come under fire for being too protective of Europe's farm tariffs and subsidies.
Chavez is demonized here but as far as i can see, he takes care of his people. Considering the list of corrupt and inefficient leaders that is no small thing. Chavez doesn't want the US to run his country any more than we wanted England to run ours and he uses the oil money to pay much of the government bills. He may be a thorn in our side but i think it is unfair to attack him like we do just because he disagrees with our trade policy. After all Venezuela is our #2 oil supplier.
The larger problem here is not Chavez but whether freer trade really helps the common man or not. People need jobs and countries need trade but the devil is in the details and there are sooo many details.
Failed Summit Casts Shadow On Global Trade Talks
In Blow to U.S., Chavez Taps Latin America's Discontent To Fight Opening of Markets
November 7, 2005
MAR DEL PLATA, Argentina -- A failed summit of leaders of the Western Hemisphere dealt a blow to global trade liberalization and strengthened the influence of Venezuelan President Hugo Chavez, a critic of the U.S. who favors protectionism and old-style socialism.
Mr. Chavez's success at playing the spoiler role here reflects a harsh fact for the Bush administration: Washington can no longer have its way in setting the economic agenda in its own backyard or in a large part of the developing world. The rise of Mr. Chavez, and of other more moderate leftist leaders in Latin America, reflects the disappointing results of the so-called Washington Consensus, a set of market-oriented policies like trade liberalization and privatization that the region and parts of Asia embraced during the 1990s. The disillusionment with free-market growth formulas also has spread to other parts of the developing world, such as Africa.
