I know this is a personal fault of mine that I really should work on improving, but it fills me with glee every time I hear or read a story about a ‘green energy’ fail. It’s so nice to be proved right. The green movement is all about money and power masquerading as social engineering, which is a wrong in and of itself, by the way. For so many reasons the government should not be involved in attempting to construct a perfect environment.
So last night I saw a story about grand theft in Europe’s cap and trade scheme. Six men were able to defraud the EU of 230 million euros.
Frankfurt’s district court began a marathon tax fraud hearing on Monday as prosecutors presented a 500-page indictment detailing how six men allegedly stole 230 million euros while selling CO2 certificates on the European carbon market.
The alleged carbon certificate VAT scam is a classic case of what experts call “missing trader intra-community” fraud, which typically involves the sale of high value, easily transportable goods such as luxury watches or smartphones. Here is an example of how such schemes work:
- Company A, which is based in one EU country, exports goods to Company B in another EU member state. Under EU rules, such “intra-community acquisitions” are not subject to VAT.
- Company B sells the goods to Company C, which is based in its domestic market. Company B therefore charges VAT, which it is obliged to pass on to tax authorities.
- Company B disappears without passing the VAT onto the authorities, but Company C still claims the cost of the tax as an input deduction and receives a refund from tax authorities.
- Company C re-exports the goods back to Company A as a tax-free intra-community deal.
Real life examples of such schemes often involve multiple re-sales within the domestic market to make tracking more difficult. All transactions normally take place in a single day, and exist on paper only. The goods themselves are generally stored in the same warehouse until they are re-exported in the final phase of the scam. Typically, the same goods are circulated and re-circulated time and time again, hence the term “carousel” fraud.
This kind of fraud differs from regular tax evasion in that it represents a double-whammy loss to tax authorities. Not only do they miss out on the tax owed by the original importer of the goods, they also pay an unjustified refund to the re-exporter.
Clever criminals. But with cap and trade, you don’t have to behave criminally in order to loot the system. A privileged few will be able to work the system legally to make millions leaving the rest of us holding the bag with higher electricity prices and government spending. Big government programs are a breeding ground for graft.
This morning there’s a story about how the ‘green jobs’ program in Seattle shockingly produced next to no new jobs.
It had heady goals: creating 2,000 living-wage jobs in Seattle and retrofitting 2,000 homes in poorer neighborhoods.
But more than a year later, Seattle’s numbers are lackluster. As of last week, only three homes had been retrofitted and just 14 new jobs have emerged from the program. Many of the jobs are administrative, and not the entry-level pathways once dreamed of for low-income workers. Some people wonder if the original goals are now achievable.
“Many” of the new jobs are administrative? So pretty much this ‘stimulus’ just created government jobs to run the stimulus program? Lovely. But so predictable. It’s just big government at work.