I don’t know about you, but I have to do a double take when I see the news and it talks about pirates. Pirates? Pirates make me think of Johnny Depp or the old Spanish Galleons that glided around the Carribbean firing balls of metal at one another. Instead, there are speedboats and bandana-wearing guys firing rocket propelled grenades at cargo ships and oil tankers. No signs of cunning and articulate parrots anywhere, just guys chewing khat, sailing around and firing guns.
I have a certain sympathy for these people. There has been no government in Somalia for many years, no infrastructure, no hope. They see the throbbing veins of Western commerce forced to pass their coast and are taking advantage, earning much money in the process. You can imagine that the local warlords are pushing the young people of their fiefdoms into their naval mugging careers with no career in medicine or politics on offer as alternatives. They are like lambs to the slaughter.
This is serious business. Pirates are being killed, probably in larger numbers than the shipping companies and their insurance companies would want you to know. The killings that we hear about – information readily available to the gangs – are creating some kind of pirate brotherhood. They are threatening to kill their hostages and up the ante in their activities. With the threat of this, the Western forces are galvanising themselves in the area, raising up the tension.
Where will it end? I suspect the forces of good will crack down hard on any small and fast moving ship in the area and send a lot of young unfortunate men quietly down to Davy Jones’ locker. I don’t see any other outcome or see any other way that this can be avoided. Democracy is not knocking on Somalia’s door.
Here’s something simple for the government to try and understand.
Higher taxes mean that people go abroad to work, meaning that their tax revenue has been lost completely. This brain drain makes companies less effective. This could make them less profitable. They might downsize (losing jobs) or close down. Whatever the small number of greedy bankers have done, the financial centre of London is by far and away the most productive and profitable part of the UK’s revenue base – still.
Higher rate tax people normally have sophisticated tax efficient methods to reduce the amount of taxes they pay – when taxes go even higher, their tax efficiencies are adapted to (often) reduce the amount of tax they were paying in the first place (offshore, equity options etc). Higher taxes often remove the incentive for higher rate tax indivuduals to work harder, so they work less hard and pay less tax (smaller bonuses). It’s a fact, making tax higher ends up with lower tax revenues in the end.
Higher tax means lower incomes for the people (whether large lumps from the higher earners or smaller amounts from the middle and working classes). They spend less. This is exactly what the government want to avoid. They want people to spend and stimulate the economy. If they don’t, businesses go bust (for lack of sales), their people are laid off, more government assistance is required for those people. Tax revenues are lower too.
However, despite this, the government have chosen to increase the rate of tax for higher rate individuals, thus breaking their manifesto promise and removing any chance of winning the next election. How bizarre.
It’s difficult to know what to do – however, this was not the correct option.