Europe's Car Makers Confront Sour Market - WSJ.com
Part of the issue in Europe (and the US) is the ever-increasing use of indirect taxes to support the socialist and union goals that citizens have been told they have the 'right to expect' but can't be directly asked to pay for.
Egregious examples abound - beginning with a 20-23 VAT rate in many countries. Instead of making the price of a car relate to the cost of building it and giving an autoworker a job, the price of the car includes extra government workers, generous and early retirement benefits, subsidized healthcare, etc.
So while the sale of a car supports both the car worker's job and the income of many non-producers, there are less cars sold.
In Portugal, taxes practically double the actual cost of a new car. The cascading effect of fewer new cars and far longer holding onto older cars has incredible ripples through job creation, quality of life, etc. If you hold a subsidized government job or are getting a government handout, you don't care - it's all about give-me-mine and the heck with anyone else.
The big picture should try to bring the cost of providing goods and services closer to what people want and are willing to pay. By making the costs of government and unions and labor policies indirectly buried in the prices consumers pay, its only logical that people will buy and use less. As a result, a lower quality of life means fewer jobs and overcapacity.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment