Tax and morality? The two should never meet…

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The language, or rather political language de jour, is for the canvassing potential members of the next parliament (Parliamentary candidates in the UK) to merge two very different concepts into one, in the public’s mind. Those words are tax evasion and tax avoidance. We (at the theMarketSoul) believe we potentially know why, but the consequences might not yet be clearly understood.

Economic principle of creative destruction - joseph schumpeter
My PRECIOUS…!

At a recent televised debate attended by potential next Business Secretary representatives (politicians who would be in charge of the Business, Innovation and Skills [BIS] department) from the three major political parties, one of the candidates challenged the audience thus:

“You (tax advisers) know the difference between aggressive tax avoidance on the the one hand and tax planning on the other.”  No the question was actually this: “Please raise your hand in the audience if you do not know what aggressive tax avoidance is.” From the podium the verdict came that about half the audience raised their hands. And therein lies the problem: Are you making this a moral question now? Because until someone is able to clearly define and explain how morality and tax planning are linked; we at theMarketSoul cannot help but think:  Where next in this one sided ‘supposed’ quasi debate?

It really depends on how you ask the question:

Is taxation moral? Is paying tax moral? What level of taxation is moral? Is being moral, paying your taxes?  If you don’t pay taxes, are you immoral?

Hopefully, you get our drift…?

© theMarketSoul 2015 skelet

Where will all the new money come from?

Seal of the United States Department of the Tr...
Image via Wikipedia

Today’s brief analysis of US Treasury Yield curves and the Debt profiles of both the USA and Italy highlights the enduring question in the title of this post.

The first graphic highlights one important issue.  We chose 2 August 2011 versus 17 February 2012 as key dates to compare the US Treasury Yield curve.  If we cast our minds back to 2 August 2012 two key facts emerge:

  1. This was the D-Day of the US Debt Ceiling vote
  2. The US still had a Triple A credit rating

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The key take-away from the Yield Curve comparison is that even with a ratings downgrade, the US is actually able to borrow new capital at a lower rate of interest 6 months on.

However, to pour a bit of realism into the analysis, we highlight two interesting Debt profile graphics below.

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The first one is the USA Treasury Maturity curve (admittedly 6 months out of date), highlighting when the current debt will need to be redeemed or rolled over.  The second is the Italian Bond Maturity curve.  You will notice just how similar the USA and Italy Debt Maturity profiles are.

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From this comparison, the critical question currently for us is:

Where will all the new money come from to roll over the debt maturing during the next 3 – 12 months?  QE is one option, but investors still need to be convinced that their capital is safe and relatively risk-free.  It is the Risk-free equation (or investor risk appetites) that needs to be explored in more detail.

theMarketSoul ©2012

Synthesizers wanted…to cross the crises divide…

Crises
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Today we are reposting a blog article originally posted in April 2010.

We believe the sentiments are still valid and should resonate across the various crises we are experiencing currently. Please click on the link below:

https://themarketsoul.com/2010/04/25/221/

theMarketSoul © 2011

An Insight into Cloud Computing

It strikes us that managing IT Service delivery maturity is a bit like the ‘Clouds’ before the major storm.

Everyone is rushing around battening down the hatches, because the frameworks and tools are so rigid and require protecting; rather than having ‘modular’ solutions available that are both flexible enough to withstand the battering of the storm; yet can be re-instated very quickly and efficiently, should the storm have managed to ‘flatten’ the landscape.

We will begin to explore some of the Cloud Computing economic and philosophical issues in a series of new articles to follow.

theMarketSoul ©2011

Quantitative Easing – Here we go again

A reminder of what we wrote on 22 September 2011 about Quantitative Easing: “QE – Our take on the Bell Curve Effect” (Please click on the link for the full article).

 

Expect Mervin King to continue writing letters to the Chancellor to explain the Inflation target gap and the worsening economic landscape.   It begs the question:  Are the Central Bankers competent enough to sterr us through troubled waters again?

The key issue really is the lag effects before QE starts working…

theMarketSoul ©2011

‘Biological’ Language

It is political party conference season in the UK. The last of the major three party’s conferences kicked-off yesterday, namely the Conservative Party Conference in Manchester.

However, we want to focus on a little snippet from last week’s Labour Party conference.

In the Labour Party leader’s (Ed Miliband) speech, he attacked ‘neoliberalism’, which in itself is not a bad thing; because the extension of the neoliberal idea, namely that ‘every interaction should be a market transaction’, has also been criticised by this publication and inspired the ‘Soul’ part of our name (theMarketSoul). Hence, we believe that there are behavioural (human and natural interaction) factors that cannot be removed and reduced to mere Market Transactions.

What we want to pick up on in today’s commentary is Ed’s use of language. He referred to ‘predators’ and Asset-strippers as the bad side of capitalism.

Personally we have no problem with predator behaviour, because this is in itself a natural phenomenon, and plays itself out countless times in the cycle and chain of life every day. If not, there would be an imbalance in nature itself. So utilising ‘natural language’ and phenomenon is good.

We do take umbrage at the ‘Asset-stripping’ tag, though. This is the ‘engineering’ and ‘clumsy’ language usage that disturbs us. We look towards language and metaphors that express nature, ecosystems and balance more precisely. Therefore, Ed, do call them predators and don’t mind what the main stream press and ‘Asset-strippers’ make of it. After all; it takes a lot to offend a lion, doesn’t it, or not?

[We picked up this article ‘Good Capitalism Does Exist’ written by Will Hutton, in the Guardian on 3 October 2011]

theMarketSoul ©2011

Evolution…or devolution?