2012
This will be my last blog post this year. Tonight we go off to Scotland for a repeat of the New Year's holiday of two years ago, so no blogging again until 6 January. Which makes it the ideal time to think about the year that has gone.
All in all it was pretty up and down. On the upside, my children seem to be doing well, which always gives a good feeling, and my mother visited in June, which was a major event for someone of her age. Then there were the Olympics, which I visited in person and in which I had a family interest, since my son was in the G.B. handball squad. On the other hand, one of my best friends committed suicide around the same time, so trips to the Olympic park were interspersed with a funeral. I have wanted to write something about this for some time, but have not yet managed to. One of my New Year resolutions will be to do so in 2013.
Outside of the family, I thought that the world didn't get any better, and in some ways got decidedly worse. Wars in Syria and Afghanistan rumbled on, and will worsen in the coming years, in my view. There were bouts of madness, such as the recent shooting of all those children in America. There were continuing economic problems in both Europe and the U.S., which politicians seem incapable of solving. More fundamentally, it became increasingly clear that the whole way in which rich countries have chosen to order their societies was pretty much a house of cards. That's not going to change for a number of years. In fact, I think there may well be conflicts within societies, as the young rail against pensioners, the unemployed against those with jobs, the domestic-born against immigrants, the poor against the rich. We may have realised that the ways of the noughties were somehow not right, but we have not yet managed to replace them with an alternative.
If that all sounds rather gloomy, then it probably reflects the mood I am in these days. Let's hope that I am wrong, and that 2013 will be a better year than 2012. Happy New Year to all who read this!
Walter Blotscher
Thursday, 27 December 2012
Monday, 24 December 2012
CHRISTMAS 2012
Like last year, I am alone in the house at this time. The others have gone off to church, while I watch over the bird, and make the bread sauce.
This year will be the first time ever that not all of our family of five will be at home at Christmas. My elder son (he of the Globe 6 Adventures blog) has been in America this autumn, and has decided to stay on for as long as his visa allows. I spoke to him on Skype about an hour ago, but it won't be the same as if he were here. The end of an era, I suppose.
After rushing to Basel and back, I have had a pretty lazy day. I made coffee and tea for my other son and daughter, fetched some wood for the stove, stuffed the turkey, and prepared the Brussels sprouts. My daughter then gave me a Christmas haircut, including eyebrows and ears (what is the evolutionary point of men having less hair on their heads as they grow older while having ever more hair in their ears?), before the turkey went into the oven at 12.00. All I have to do now is have a shave and a shower, and I'll be ready.
A very happy Christmas to all who read this.
Walter Blotscher
Like last year, I am alone in the house at this time. The others have gone off to church, while I watch over the bird, and make the bread sauce.
This year will be the first time ever that not all of our family of five will be at home at Christmas. My elder son (he of the Globe 6 Adventures blog) has been in America this autumn, and has decided to stay on for as long as his visa allows. I spoke to him on Skype about an hour ago, but it won't be the same as if he were here. The end of an era, I suppose.
After rushing to Basel and back, I have had a pretty lazy day. I made coffee and tea for my other son and daughter, fetched some wood for the stove, stuffed the turkey, and prepared the Brussels sprouts. My daughter then gave me a Christmas haircut, including eyebrows and ears (what is the evolutionary point of men having less hair on their heads as they grow older while having ever more hair in their ears?), before the turkey went into the oven at 12.00. All I have to do now is have a shave and a shower, and I'll be ready.
A very happy Christmas to all who read this.
Walter Blotscher
Sunday, 23 December 2012
GOULASH SOUP
I tend to associate goulash soup with skiing holidays. At the top of the mountain you find one of those little restaurants, serving a small range of things for lunch. A bowl of goulash soup and a beer, and you are all set for the afternoon's exertions.
The other association is with Basel. I had it when I visited my son last spring, also at the top of a mountain (albeit without snow). So when I went to pick him up over the weekend, it was the obvious choice for lunch on Saturday. I had it in a Raststätte on the A5, somewhere in the hills between Kassel and Frankfurt. And as with the skiing holiday, it was the perfect pick-me-up to see me through the afternoon.
2280km from Denmark to Basel and back in two days is a bit of a slog; I felt a bit like one of those Le Mans drivers by the time I got back this evening. I had borrowed my mother-in-law's car, since I didn't trust mine to last the distance, and my wife's doesn't have enough room for all of my son's stuff. Getting on the wrong side of my mother-in-law is not a sensible policy, so I decided not to thrash it, keeping to a maximum of 110 km/hour, even though it would take more hours. There is no speed limit in parts of Germany, so I was continually overtaken by people going nearly twice as fast as that.
Despite being the last weekend before Christmas, there wasn't too much traffic. I only had one bout of Stau, after an accident just north of Frankfurt on the way home. Otherwise, it was relatively painless. The car's headlight bulbs conked out somewhere around Hannover, so I had to drive the last 300km in the dark with the headlights on full beam. That managed to irritate quite a lot of German and Danish drivers, and it will probably irritate my mother-in-law when I get around to telling her. Still, it could have been a lot worse.
Walter Blotscher
I tend to associate goulash soup with skiing holidays. At the top of the mountain you find one of those little restaurants, serving a small range of things for lunch. A bowl of goulash soup and a beer, and you are all set for the afternoon's exertions.
The other association is with Basel. I had it when I visited my son last spring, also at the top of a mountain (albeit without snow). So when I went to pick him up over the weekend, it was the obvious choice for lunch on Saturday. I had it in a Raststätte on the A5, somewhere in the hills between Kassel and Frankfurt. And as with the skiing holiday, it was the perfect pick-me-up to see me through the afternoon.
2280km from Denmark to Basel and back in two days is a bit of a slog; I felt a bit like one of those Le Mans drivers by the time I got back this evening. I had borrowed my mother-in-law's car, since I didn't trust mine to last the distance, and my wife's doesn't have enough room for all of my son's stuff. Getting on the wrong side of my mother-in-law is not a sensible policy, so I decided not to thrash it, keeping to a maximum of 110 km/hour, even though it would take more hours. There is no speed limit in parts of Germany, so I was continually overtaken by people going nearly twice as fast as that.
Despite being the last weekend before Christmas, there wasn't too much traffic. I only had one bout of Stau, after an accident just north of Frankfurt on the way home. Otherwise, it was relatively painless. The car's headlight bulbs conked out somewhere around Hannover, so I had to drive the last 300km in the dark with the headlights on full beam. That managed to irritate quite a lot of German and Danish drivers, and it will probably irritate my mother-in-law when I get around to telling her. Still, it could have been a lot worse.
Walter Blotscher
Friday, 21 December 2012
ARMAGEDDON
I am writing this post from the planet Zog. I arrived here last night, after a UFO picked me up from rural Denmark. Earth is apparently going to disappear tomorrow, so I thought it best to get out while I could. I am not feeling very well, as I tend to get queasy in aircraft, and the UFO pitched around a lot. The locals here say that I will soon get over it.
My first impressions are that Zog is a bit of a dull place. There are a couple of wizened old Mayan guys and a lot of survivalists, mainly American. The Mayans are making circles or something, while the others tend to hang out and mutually admire their impressive supplies of weaponry. They also like eating out of tin cans with a Swiss army knife. I'm not really into canned food, but there's not much else to eat here, really.
The worst thing is that there's nothing to do. Zog is sort of rocky and volcanic, so you can't even go for a bike ride. There's masses of T.V. and internet, and they do have some pretty impressive time machines; but there are no parks or beaches or fields.
There's a rumour going around that a UFO is going off to the Pic de Bugarach in France tonight in order to pick up the last emigres. I think I might try to sneak a lift on it. Better to be vapourised on Earth than stay here.
Walter Blotscher
I am writing this post from the planet Zog. I arrived here last night, after a UFO picked me up from rural Denmark. Earth is apparently going to disappear tomorrow, so I thought it best to get out while I could. I am not feeling very well, as I tend to get queasy in aircraft, and the UFO pitched around a lot. The locals here say that I will soon get over it.
My first impressions are that Zog is a bit of a dull place. There are a couple of wizened old Mayan guys and a lot of survivalists, mainly American. The Mayans are making circles or something, while the others tend to hang out and mutually admire their impressive supplies of weaponry. They also like eating out of tin cans with a Swiss army knife. I'm not really into canned food, but there's not much else to eat here, really.
The worst thing is that there's nothing to do. Zog is sort of rocky and volcanic, so you can't even go for a bike ride. There's masses of T.V. and internet, and they do have some pretty impressive time machines; but there are no parks or beaches or fields.
There's a rumour going around that a UFO is going off to the Pic de Bugarach in France tonight in order to pick up the last emigres. I think I might try to sneak a lift on it. Better to be vapourised on Earth than stay here.
Walter Blotscher
Thursday, 20 December 2012
CORPORATE TAXES (2)
In an earlier post, I argued that there were good economic and administrative reasons for not taxing companies on their profits, but instead waiting until those profits were paid out in some form or another (wages, dividends etc) and then taxing the - now richer - recipient. There would be a timing difference, but nothing else; and there would be a lot less haggle and bureaucracy.
Politicians have of course not listened to this idea (which, I might add, is not mine, but one that I would support). Instead, in various countries, they have started to point accusing fingers at companies that pay little or no corporate tax. In America, many companies do not remit profits back to the home country, since there is a tax shelter for profits earned abroad. In the U.K., companies such as Google, Amazon and Starbucks have been pilloried for holding their European intellectual property in a low-tax environment such as Luxemburg, and then charging hefty licence fees to their U.K. subsidiaries, so that the latter have no profits and so pay no tax. Never mind that in both cases, companies are merely responding rationally to tax laws passed by said politicians. Indeed, since company directors have a fiduciary duty to promote the interests of their shareholders, it would be wrong for them not to arrange their affairs in this way. Still, logic and responsibility never stopped a politician from banging a drum.
But what is perhaps surprising is that Danish politicians have now decided to get in on the act. Yesterday the tax authorities published details of the tax paid by all companies in 2011, their taxable income, whether they had offset that income with losses from previous years, and whether the company is taxed as part of a group. Not surprisingly, it emerged that a number of large companies paid no Danish corporate tax at all last year. The list includes Arla Foods, Rockwool, Vestas and Dong Energy. Others, such as Carlsberg and Danfoss, paid nowhere near the official tax rate on profits of 25%.
I have serious reservations about this wheeze. The first is that it is a clear breach of the standard principle - in all countries - that relations between a taxpayer and the tax authorities remain confidential. Ministers say that they believe that openness will lead to companies' paying more tax. But since the authorities already have all of the relevant information to hand, that extra tax can only come from public pressure making companies change their behaviour.
And here comes my second objection. As a qualified accountant, I know that there are a number of reasons why companies don't pay corporate taxes. The first, and most obvious, is that they make operating losses; either a loss in the relevant year, or losses in previous years that they have not yet fully recovered. The second is that they have made major investments, for which they get such large tax deductions that their operating profits are turned into taxable losses. Hopefully, the investments will eventually lead to extra profits in the future, that will then be taxed. But an interested citizen will find it difficult to see that from the raw data, particularly since it only covers one year, namely 2011.
My third objection is that how much a company pays in corporate tax says absolutely nothing about its general contribution to society, either in the narrow sense of paying taxes, or in the wider sense of economic and/or social benefit. Consider, for instance, a company that makes kr.100 million a year in profit, but decides, because its owner is a quirky philanthropist, to distribute all of those profits to the workers in the form of year-end bonuses. Its corporate tax contribution is now zero; but the amount of tax going to the Government rises, because wages are taxed at much more than 25% (an argument for my thesis above). So concentrating on just the corporate aspect is misleading. Or what about a trading company that has huge sales (thereby making lots of VAT payments to the Government), but which makes a modest profit (because margins on those sales are wafer-thin)? The same would be true.
Politicians often go after particular people or groups in order to deflect attention from other things where they can be held responsible. I think this is the case here. Denmark is in the middle of tough times, because of silly economic decisions taken by the powers-that-be, and it helps to change the mood music. The not-so-subtle underlying message, of course, is that if only Danish companies paid more corporate tax, then times wouldn't be so tough for Danish citizens. But that is nonsense, and the politicians know it. Shame on them.
Walter Blotscher
In an earlier post, I argued that there were good economic and administrative reasons for not taxing companies on their profits, but instead waiting until those profits were paid out in some form or another (wages, dividends etc) and then taxing the - now richer - recipient. There would be a timing difference, but nothing else; and there would be a lot less haggle and bureaucracy.
Politicians have of course not listened to this idea (which, I might add, is not mine, but one that I would support). Instead, in various countries, they have started to point accusing fingers at companies that pay little or no corporate tax. In America, many companies do not remit profits back to the home country, since there is a tax shelter for profits earned abroad. In the U.K., companies such as Google, Amazon and Starbucks have been pilloried for holding their European intellectual property in a low-tax environment such as Luxemburg, and then charging hefty licence fees to their U.K. subsidiaries, so that the latter have no profits and so pay no tax. Never mind that in both cases, companies are merely responding rationally to tax laws passed by said politicians. Indeed, since company directors have a fiduciary duty to promote the interests of their shareholders, it would be wrong for them not to arrange their affairs in this way. Still, logic and responsibility never stopped a politician from banging a drum.
But what is perhaps surprising is that Danish politicians have now decided to get in on the act. Yesterday the tax authorities published details of the tax paid by all companies in 2011, their taxable income, whether they had offset that income with losses from previous years, and whether the company is taxed as part of a group. Not surprisingly, it emerged that a number of large companies paid no Danish corporate tax at all last year. The list includes Arla Foods, Rockwool, Vestas and Dong Energy. Others, such as Carlsberg and Danfoss, paid nowhere near the official tax rate on profits of 25%.
I have serious reservations about this wheeze. The first is that it is a clear breach of the standard principle - in all countries - that relations between a taxpayer and the tax authorities remain confidential. Ministers say that they believe that openness will lead to companies' paying more tax. But since the authorities already have all of the relevant information to hand, that extra tax can only come from public pressure making companies change their behaviour.
And here comes my second objection. As a qualified accountant, I know that there are a number of reasons why companies don't pay corporate taxes. The first, and most obvious, is that they make operating losses; either a loss in the relevant year, or losses in previous years that they have not yet fully recovered. The second is that they have made major investments, for which they get such large tax deductions that their operating profits are turned into taxable losses. Hopefully, the investments will eventually lead to extra profits in the future, that will then be taxed. But an interested citizen will find it difficult to see that from the raw data, particularly since it only covers one year, namely 2011.
My third objection is that how much a company pays in corporate tax says absolutely nothing about its general contribution to society, either in the narrow sense of paying taxes, or in the wider sense of economic and/or social benefit. Consider, for instance, a company that makes kr.100 million a year in profit, but decides, because its owner is a quirky philanthropist, to distribute all of those profits to the workers in the form of year-end bonuses. Its corporate tax contribution is now zero; but the amount of tax going to the Government rises, because wages are taxed at much more than 25% (an argument for my thesis above). So concentrating on just the corporate aspect is misleading. Or what about a trading company that has huge sales (thereby making lots of VAT payments to the Government), but which makes a modest profit (because margins on those sales are wafer-thin)? The same would be true.
Politicians often go after particular people or groups in order to deflect attention from other things where they can be held responsible. I think this is the case here. Denmark is in the middle of tough times, because of silly economic decisions taken by the powers-that-be, and it helps to change the mood music. The not-so-subtle underlying message, of course, is that if only Danish companies paid more corporate tax, then times wouldn't be so tough for Danish citizens. But that is nonsense, and the politicians know it. Shame on them.
Walter Blotscher
Wednesday, 19 December 2012
THE LOCAL CINEMA (7)
I had big news to announce at this evening's do at the local cinema. We have just placed an order for 78 new seats from China to replace the 114 that we presently have. The seats will be wider and smarter than the current, rather faded, chairs, and there will be a lot more legroom between the rows. They will also be attached to a newly sloping floor, that will be built during July when we close for the summer. When we re-open in August, it will be to a completely refurbished auditorium.
After digesting that, all the volunteers watched this week's film, Hypnotisören ("the Hypnotist"). A typical Scandinavian thriller from Sweden, full of dark, frozen landscapes, dark, frozen souls, and lots of dead bodies. I rather liked it.
Walter Blotscher
I had big news to announce at this evening's do at the local cinema. We have just placed an order for 78 new seats from China to replace the 114 that we presently have. The seats will be wider and smarter than the current, rather faded, chairs, and there will be a lot more legroom between the rows. They will also be attached to a newly sloping floor, that will be built during July when we close for the summer. When we re-open in August, it will be to a completely refurbished auditorium.
After digesting that, all the volunteers watched this week's film, Hypnotisören ("the Hypnotist"). A typical Scandinavian thriller from Sweden, full of dark, frozen landscapes, dark, frozen souls, and lots of dead bodies. I rather liked it.
Walter Blotscher
Monday, 17 December 2012
JULEFROKOSTER
December is the time for "julefrokoster". Although that Danish word literally means "Christmas lunches", most take place in the evening. For companies, other workplaces, clubs, associations, any organisation really. Large amounts of beer and schnaps are the norm.
This week is going to be fairly heavy duty, since today I have my last badminton match of the year, followed by a julefrokost. Tomorrow will be the last bridge evening of the year, followed by a julefrokost. Wednesday will be an event at the local cinema, followed by a film, and Thursday evening will be the gala at the school where I teach (thankfully, it will be non-alcoholic, though I have to serve). Friday I will collapse, before a weekend spent driving down to Basel and back to fetch my son and all of his stuff. Next Monday I have to make the turkey.
Somewhere in between I have to buy a Christmas tree, and do other assorted stuff. I am already looking forward to the 25th, when I can relax.
Walter Blotscher
December is the time for "julefrokoster". Although that Danish word literally means "Christmas lunches", most take place in the evening. For companies, other workplaces, clubs, associations, any organisation really. Large amounts of beer and schnaps are the norm.
This week is going to be fairly heavy duty, since today I have my last badminton match of the year, followed by a julefrokost. Tomorrow will be the last bridge evening of the year, followed by a julefrokost. Wednesday will be an event at the local cinema, followed by a film, and Thursday evening will be the gala at the school where I teach (thankfully, it will be non-alcoholic, though I have to serve). Friday I will collapse, before a weekend spent driving down to Basel and back to fetch my son and all of his stuff. Next Monday I have to make the turkey.
Somewhere in between I have to buy a Christmas tree, and do other assorted stuff. I am already looking forward to the 25th, when I can relax.
Walter Blotscher
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