One of these little items that directly concerns only a tiny minority of the human race, and tends to fly under the radar. However, it may be a very important harbinger in today’s over-indebted world.
Bottom line is that global Political Classes have an insatiable desire for what Margaret Thatcher called Other People’s Money. If they can’t borrow it, they will tax it. And if taxes are falling short, they will change the rules. What attracts particular attention in this case is that China is changing the rules retroactively. What are the chances that China’s Political Class will be the only one to reach for that tool?
First they came for the rich, and I did nothing because I was not rich, etc
China’s 25-year tax reach will cost it more than it collects - Asia Times
"China is now chasing decades of unpaid tax on money its wealthiest citizens moved offshore, in some cases reaching back as far as 25 years. Call it what it actually is: a state deciding, after the fact, that wealth it once let leave the country is now fair game to reclaim.
To be sure, taxing worldwide income isn’t radical policy. The United States has taxed its citizens’ global earnings for a century, and Europe has recently tightened comparable rules considerably. …
It’s the act of a government working backward from how much money it needs toward whoever still happens to have some. …
It would still be a mistake to read this purely as Beijing behaving badly while everyone else stays clean. Every government under serious fiscal strain eventually looks backward at money that left during better years and decides it wants to claw back a share. …
Investors treating this purely as a China-specific risk are likely missing the wider signal. I’m pretty confident that aggressive, backward-looking tax enforcement under fiscal strain won’t stay confined to China for long. …"