The European Commission has published a unilateral judgement declaring that Swiss company tax law is “incompatible” with the free-trade agreement which has been in force between it and Switzerland since 1972. The Commissar for Foreign Affairs, Benita Ferrero-Waldner, claims that tax breaks for certain holding companies are equivalent to state aids and that, where these companies in fact operate throughout the EU, the tax regime should be changed. Acting under pressure from Paris and Berlin, the Commission fired an initial warning shot in September 2005, criticising the fact that holding companies enjoy tax breaks at federal level and are hardly taxed at cantonal level either. The Swiss have reacted angrily, saying that tax matters, especially the tax prerogatives of the cantons, are a matter of Swiss sovereignty and therefore not up for discussion.
I wonder if we will have the same issues when the North American Union is being pieced together? I think we will sleep through the globalization process mostly asleep, until it is too late to change the outcome. There will be nowhere on earth to run.
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