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Sunny Spain…or Iceland? Many may
mistakenly think of Spain as a comparatively less developed nation, since it
emerged from the Franco era only relatively recently. However, Spain could
actually be seen as a more advanced model of where we are all heading. The
story goes that, as part of Spain’s acceptance into the world order of
things, her administrators spent some time visiting and learning
from the dark tax overlords of various countries to get up to speed in the
modern methods available for wealth extraction and bureaucratic empire
building. Today, many of the consequences of their diligent hard work are
abundantly clear. A quick scan of the news over the past year will supply a
list of corruption allegations against many of the past administrators, with
the burdens that they lay still continuing to stifle prosperity, and thousands
losing their homes to the banks, and record numbers unable to pay their
property taxes.
Further, a visit to Spain may seem to
some like entering a cross between the Third Reich and the People’s
Republic of China, since nearly all activity will involve some bureaucrat
demanding the equivalent of “Papiere, bitte!” with a quick “No possible” or
worse still, a fine or penalty when one is unable to supply the correct one;
plus seeing so many Spanish shops being turned into a Chinese bazaar. This is
due to Spain’s government having given Chinese companies a five-year
tax-free window in which to operate. This was set up in a deal that was
originally to involve China purchasing Spanish lemons in return. China
quickly withdrew from the purchase after getting the concession, which still
remains to this day. Every now and then, another Spanish shop closes, adding
more Spaniards to the already debilitating 25% unemployment figure. The shop
is soon reopened by a Chinese firm employing cheap Chinese labour for five years before closing down again.
Coinciding with this, there is a very painful bureaucratic burden and rapidly
increasing tax burden, too, for anyone else wishing to run a small business.
Even simply being self-employed requires a payment of €300 each month
in taxes whether any money is earned by the individual or not! Under
consideration is a law that would require an employment contract and the
collection of a heavy tax on households that employ a cleaner, or even home
care for the elderly.
Spain’s
War on Cash Economy
You are required to get a license and
pay a fee for just about everything in Spain, including renting out your
house, and you can be fined €20,000 for failing to comply. You must
even secure a license to go fishing! In addition, with talk of outlawing cash
entirely, Spain has declared war on the black-market economy, taking yet
another step toward transforming the country into a poverty trap for anyone
outside of government or the corporate establishment.
It gets even worse, with sweeping
crackdowns and fines for routine traffic violations and for failure to comply
with an ever-growing list of rules concerning proper footwear; carrying all
sorts of emergency gear, including high-visibility vests and an extra pair of
eyeglasses if worn; and, if crossing the border into France, two sets of
Breathalyzers. Any lapses and you will fall afoul of the non-laws that govern
Spain’s roads. I say ‘non-laws’ because not even the government
seems to know for certain what the rules are regarding changing one’s
driver’s license from one’s home country to Spain. All of this
permits local police to have a field day fining expat pensioners up to a
reported €600 for breaking laws that are subjectively enforced,
depending on which cop and what day of the week it is.
In contrast, following its financial
collapse in 2008, Iceland reportedly is doing quite well compared to most
other countries. Perhaps this is because they
treated those who helped precipitate the collapse as criminals rather than
coddling them with generous severance packages. As you may recall, Iceland
bailed out its people, not the banks, much to the disgust of Europe’s
elite. And so, Icelanders are not rioting in the streets as they are here in
Spain this week; instead, they are busy online helping to draft new rules to
protect themselves from predatory bankers. Although I’ve always much
preferred warm climates, I have an odd desire to leave Spain behind –
for Iceland.
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