Part of the planned recovery of the UK  economy from the recession, credit crunch and over extended public sector is forecast to come from an export boom. Yesterday’s figures for March were disappointing, but they are just one month’s figures. They show a fall  in exports of goods from January to February, a rise of £1 billion in the overall deficit, with exports of services still yielding a very handy £5.4 billion surplus.

           Within the goods export figures, the weakeness was greater with the rest of the world than with the rest of the EU, despite the gathering economic weakness on the continent.  What more should be done to improve the position?

            The Prime Minister and other leading Ministers are well aware of the need to improve the UK’s export performance to the faster growing parts of the world. They realise that the EU market is going to be stagnant at best for some time to come, given the obvious stresses in the Euro and the policies of mutual deflation being pursued there. They are hopping on to planes to take senior business people off to Asian, Middle Eastern  and Latin American destinations, and  doing their bit as super salesmen where government can make a difference or is expected to be in support.

             Meanwhile, back home, it is taking time to create  the extra factory output needed when the UK does have a success on its hands. Consider the case of Jaguar/Land Rover. Last year they launched an attractive new vehicle, the Range Rover Evoque. It was clear from the pre launch expressions of interest, and from the early reviews and orders, that this was going to be a big hit. Now there are  frustrated UK buyers, told to wait six months for delivery, now facing a minimum of nine months wait for their vehicle. It is taking time  to crank up production to the levels needed to satisfy buoyant home and export demand. Home demand may in part be import saving, as the prospective purchasers may otherwise  opt for a foreign made vehicle.

               UK manufacturing is restricted in output when it has popular products. It takes time to get planning permission, to recruit and train a good workforce, to negotiate all the regulatory hurdles, if you can obtain the capital  needed to establish the larger plant.  Meanwhile energy intensive business is under pressure from the high energy costs that a UK and EU base entail compared to US and emerging market competititors. The government is trying to abate the high prices for the largest users of energy through subsidy, but energy cost remains an obstacle to successful competitive manufacturing in the UK. it needs instead to trigger more energy developments, and to pursue a policy of cheaper energy instead of interfering with the market in a way designed to raise prices.

 

 

 

The Governing law

 

Changing a currency entails dealings with several  jurisdictions depending on the transaction or agreement.  There are broadly four categories we need to consider. There are agreements and contracts within the country leaving the Euro. There are contracts and agreements between people and companies in the exit country and people and companies elsewhere in the Euro zone. There are agreements and contracts between people or companies in the exit country, and people and companies outside the Euro zone. There are contracts and agreements between people and companies outside the exit country using the Euro for their own purposes.

 

Contracts and agreements between people and companies within the exit country.

 

These contracts and agreements can be changed by domestic law in the exit country. If the recommendation is accepted that these should be changed automatically into new currency contracts and agreements, the exit state needs to pass the relevant law making it clear this has to happen.

It would be wise in the new law requiring this to deal with the issue of whether adversely affected parties could appeal to European jurisdiction against the change. The domestic law could include a clause pointing out that the exit country has now become an EU country with a derogation over belonging to the Euro. It could also explicitly suspend appeal on these matters to the ECJ. This could be buttressed by a decision of the EU to say that the EU approves of the decision to convert these contracts into the new currency, making an appeal futile or impossible.

 

Contracts and agreements between people and companies within the exit country and people and companies within the rest of the EU

 

This is a more difficult set of cases, if the decision is taken to convert these into the new currency as well. Lenders from other EU countries will lose from devaluation, though borrowers will of course benefit.  Unless express legal action is taken there could be law suits by losers from outside the country complaining about the compulsory conversion of their contract.

If the decision is taken to proceed with compulsory conversion of these contracts it would be wise to change EU law expressly and accordingly. The EU could pass a regulation  denying redress to individuals and corporations who had lost money as  a result of the compulsory switching of their assets to a different currency.

 

Contracts and agreements between people and companies within the exit country and people and companies from outside the EU

 

Varying these contracts would be an assertion of extra territorial powers, which might be going too far in the circumstances. The easiest option is to leave these contracts and agreements in Euros, as the Euro survives as a trading currency if one or a few countries leave it.

 

The EU did of course assert such jurisdiction when it established the Euro. By destroying big trading currencies like the DM and the French franc it forced conversion of contracts and agreements. It got away with it, without a big legal challenge to its chosen course of action.  Were the EU to decide to abandon the Euro and to return all countries to their own currencies, then it would have to take a similar legal risk to the risk it ran when establishing the currency. There would be limited point in people challenging the decision, as the Euro would cease to exist, making enforcement of the Euro contracts impossible.

 

The decision could be taken to convert all these contracts into new currency. Individual contracts might be exempted, depending on the governing law determining the contract. It would be a matter for individual negotiation and decision in the light of the general policy and the governing law in each case. The author has ascertained that the US might accept such assertion of power over US nationals  if it were endorsed and supported by the IMF.  It is recommended that the EU does not seek to assert jurisdiction on non EU individuals and companies  if presiding over limited exits from the zone.

 

Contracts and agreements between people and companies outside the exit country in Euros.

 

In the circumstances where the Euro continues as a main currency, it would be best to leave all these contracts in Euros.  Whilst some of them relate to assets and liabilities within the exit country, neither the EU nor the exit country government have clear powers over the contracting parties. It would seem to be a needless complication to try to assert power to convert against the wishes of one or more of the contracting parties. They might decide to do so for their own reasons, but that can be left to private negotiation.

 

Contracts between people and companies in countries remaining in the Euro area

 

There can be a genuine choice of options here. The EU as a whole would have the legal clout to enforce compulsory conversion of contracts into the new currency. There would, however, be no pressing need to do so, as the contracting parties would still be working on most of their other budget matters in Euros and may well have Euro streams of revenue.

There is a case for the compulsory conversion of Euro contracts relating wholly to exit country assets and liabilities into the new currency. There is also a case for leaving it to individual negotiation. For the sake of simplicity  I recommend not seeking compulsory conversion.

 

 In the late 1980s and early 1990s people used to tell me that Sweden proved you could have high public spending and economic success. There was no need to keep public spending as a percentage of output down as they did then  in the US, no need to go in for raw capitalism like America. I was urged to love the Swedish model.

As often with these things just as people urged others to follow, the weaknesses of the chosen example were about to become plain. In 1992 the Swedish crisis started. It all looks very familiar. It was a combination of an Irish/ Spanish style property crash and banking crisis, and  a state finance crisis all rolled into one.

The Swedes nationalised their problem banks, but on tougher terms than the UK did in 2008. It cost them around 4% of GDP, but they got some of it back later when they resold the banks once restored to health. They had their own sub prime crisis.

The state also decided that its welfare programmes were too generous, and its borrowing levels unacceptable. They settled on fiscal rules designed to eliminate  state borrowing  in future. Between 1994 and 1998 they eliminated their deficit. They cut all sorts of welfare benefits to make them less generous. It was not what politicians wish to do, nor was it friendly to the many now out of work.

Unemployment benefit, originally paid with no waiting period at 90% of previous earnings (up to a limit) was cut to 75% of past earning with a 5 day delay. It was limited to 300 days of claim. Eligibility for disability pension was tightened. To receive a basic pension an individual had to show 40 years of residence.  They tightened the definition of a work injury to make a substantial reduction in work injury claims.  Health insurance was made meaner.  In 1993 and again in 1996 they cut the pension indexing payments.  In 1996 they cut Child Allowance and withdrew the supplement for more than 2 children.

Once Sweden made her spending cuts, got to a balanced budget, and following devaluation of the krona, the economy started to perform better. I’m not sure that was the Swedish model my advisers had in mind.

 

           The Euro crisis is returning. Yesterday the cost of borrowing  ten year money for the Spanish government  hit 5.98%, following a giddy rise in the last few days. The government was forced into announcing another Euro 10 billion of cuts, this time in regional government’s health and education spending.

          Some of you may recall that recently we read of the most austere budget ever in Spain, with Euro 27 billion of cuts. This was the new government’s fevered attempt to get the Spanish public sector deficit down to 5.3%, from the 8.5% it ran at last year. In 2011 the then government overshot its target of a 6% deficit by a mighty 2.5% of GDP (around 27 billion Euros). This year the new government budgets to overshoot the old 4.4% target by just 0.9% of GDP. These are still large numbers.

            The spin, as ever, differs from the reality. The Euro 27 billion most austere budget included Euro 15 billion of “cuts” announced last December.  The austerity is tougher on the private sector than the public. It includes large increases in gas and electricity prices to cut the state subsidies. Income Tax goes  up by tapered amounts, with a rate rise of 7% more on the higher incomes.  Companies are expected to pay Euro 12.3 billion more . They aim to get Euro 2.5 billion from a 10% no questions asked tax for anyone bringing offshore money home.  I cannot see that being too popular.

            Central government personnel costs will rise by  1.3%, in a” tough” stance that includes a pay freeze! Like many governments, the Spanish one announces strict measures implying they are mainly public spending cuts, but in practice they are more to do with squeezing the private sector to pay for the bills. Yesterday’s news was for spending cuts in sensitive areas administered by regions often hostile to the central government. It was more an invitation to a row than  anything else. Meanwhile unemployment benefit payments and interest bills surge.

        The problem with all this austerity, as many now point out, is it can be self defeating. Spain needs a private sector led recovery. Instead the government is squeezing family budgets at all levels of income. This may produce a worse decline in national output than the government allows for in its figures. This in turn may produce less revenue, widening the deficit further. Yesterday’s  move to appease the market gods may not succeed. Many EU countries need to run their public sectors more efficiently and do less through them. It would help if the EU showed them how, by cutting back on its own expenditures and requirements placed on EU member states. Instead, they just demand more, whilst also demanding that the member states borrow less. It is not a winning formula. Expect some more bad news from the markets. Spain denies she will need to put more capital into her banks, but some of them are having a hard time in the markets as well.

 

 

               Most people want their government to collect sensible amounts of tax and to provide decent services for the money. They wish the government to uphold the law against criminals. They think most our problems are ones coming from too much law,  not too little, or from imperfect enforcement of laws we do have against criminal activity.

               Modern bureaucratic  government seems to think most of the problems come from the actions of the people.

               Health officials want people to be less fat, to eat a better diet, drink less alcohol, take more exercise. They may be right that this would make people healthier, and delay their time with doctors and hospitals to older age. Meanwhile the public wants the NHS to be there for them whatever they do. Some resent the taxes and regulations used to try to change our lifestyles.

               More resent the work of the green police. The latest idea that if  you want to apply for a home improvement, the Council can make you undertake various energy improvement works at the same time is going down badly in some quarters. People feel that if they worked hard and manage to have a little money left over after all the Income Tax, National Insurance and VAT they should be allowed to spend it on a home improvement of their choice, not on improvements of the government’s choice.

               Motorists are often on the wrong end of the official view of how we should behave. There is endless expensive fiddling with the road network to try to change motorists behaviour in many places.

               Tax policy has become a Clapham Junction of differing signals. Higher taxes to stop binge drinking, smoking, travelling abroad, travelling by car or plane, using roads in Central London, making good profits, earning a good income and employing people. Tax  breaks to promote going by bus (fuel duty),  going by train (subsidy), saving for retirement, saving generally, lending to the government, and giving money to charity.

                 Now the government sees the need to define aggressive tax avoidance, a legal but morallyrepugnant activity. The best way to stop morally repugnant tax avoidance is to define it and make it illegal.

                 Many members of the public want the government to concentrate on what it spends, and get better value for the money, instead of telling us what to spend.  The more governments think it is about the way people behave, the more voters will it turn it back on the government and complain about the way they behave. Let the one without sin hurl the first legislative stone.

           The Euro area needs  economies which have converged sufficiently to be managed together with sustainable  budget deficits and debt refinancing requirements.

 

           The Euro founders  set out sensible tests to ensure only countries equipped to deal with Euro  discipline joined.  In the initial enthusiasm  it was decided  to allow a number of countries to join which were far from converging.  In some cases the discipline of the zone has brought convergence, in other cases  countries have needed  IMF programmes.

 

           The task is to carry out the least number of changes necessary to create a sustainable remaining Euro area capable of growth and greater prosperity, whilst freeing the exit countries sufficiently so they too can grow again. There are four  main economic strains: big  balance of payments imbalances between countries, high unemployment in some uncompetitive countries , banking weakness, and state debt financing problems.

 

           Some countries will over time become more competitive through zone  discipline.  They have to raise productivity,  and set real wages at appropriate levels. Some of these adjustments can prove painful, if wages  have to fall. Others with more urgent problems may need to leave the Euro to  adjust their economies more fundamentally. Devaluation is part of the answer for an extreme case like Greece,  providing an immediate  adjustment to competitiveness. It  cheapens  exports and makes imports dearer, adjusting the trade deficit.

 

          Some countries with debt problems will over time be able to cut their deficits by cutting spending, or by growing their   tax revenue more rapidly.  Countries with large inherited debts will need to repay some debt when possible. Others simply have too large a  debt and  deficit to make longer term adjustment a sufficient answer. Greece again is the extreme case. Greece  is seeking a voluntary arrangement with private sector creditors to cut the debts. Devaluation following exit from the Euro could help.

 

The optimum monetary reconfiguration

 

The early  exit of Greece from the Euro zone  is recommended, as the least change needed.

 

 Portugal and possibly  Ireland should also be invited to leave the zone.  Neither can finance themselves in the markets in the usual way, despite austerity packages and substantial new borrowings from the EU and IMF. Early exit, devaluation, and domestic growth policies including monetary accommodation to foster the private sector would help, and would reduce the strains on the zone.

 

Italy’s main problem is the overhang of past debt. This may be manageable. Italy can meet the deficit and inflation requirements. The country is rightly  putting  in place more productivity and  cost reduction  policies to improve competitiveness.

 

Spain has serious problems with banks and the past property bubble. She would probably recover more quickly with devaluation. However, there is considerable support in Spain and the  EU to keep Spain in the system. She can still borrow in the normal way in the markets to pay the bills, and is keen to pursue fiscal orthodoxy .

 

Italy and Spain will be  supported in  the zone. There is no power to force their exit. The question of a country leaving the Euro should automatically arise if and when the country needs to seek financial assistance, when the EU does have negotiating power to request an exit. These proposals do not require Treaty revision,  avoiding the delays and political difficulties that poses.

 

 

Implications for sovereign debt, private savings and domestic mortgages.

 

It is recommended that an exit country changes all contracts, assets and liabilities into its new currency for domestic users  under its jurisdiction.

 Devaluation  helps the borrower and harms the lender. As the exit countries are too heavily in debt, this natural bias  helps recreate equilibrium.

 

Implications for international contracts denominated in Euros.

 

It is further proposed that the EU legislates for compulsory conversion of all assets, liabilities,   and contracts for all  EU citizens and resident companies to the new currencies.

 Foreign owners and contracting parties  outside the EU should have the right to negotiate their future currency  between Euro and any new  currency, avoiding jurisdictional clashes.

 

 

Effects on the stability of the banking system

 

The current banking system is unstable. In peripheral countries like Ireland and Greece the banks have too much debt. Banks throughout the zone have lost money on holding bonds in the weaker countries, and may also have lost money in the property crashes in peripheral countries. The system is currently heavily dependent on ECB support through its large  loan facilities

 

The exit countries  should  establish their own Central banking regime immediately. They should  reassure during the transitional period, promising to stand behind their commercial banks, and making plenty of liquidity available.

The ECB would need to continue its generous policy towards the remaining banks in the system, and to the exit countries whilst they establish their own arrangements.

 

Overall stability would be improved. Markets would have a clearer idea of true values and losses, which could help confidence . Responsibility for the worst cases would pass to new national institutions in the exit countries, enabling the ECB to concentrate on the large cases of Italy and Spain.

 

Approaches to transition

 

The paper sets out a timetable, and provides advice on the legal, economic and political steps  for  a successful   early exit of some countries from the zone. Much has to be done right at the beginning.  Preparations need to be fast, thorough and secret , so  when the news is announced all the key matters are in place for a smooth transition. Fortunately there  are many precedents for this work. The author has traced 87 successful cases of exits from single currencies or  zones since 1945.

 

Institutional implications

 

It is recommended that the exit countries become EU countries with an Article 139 derogation from immediate membership of the Euro. They will revert to candidate status. This reduces the legal and institutional complexities. They need to provide nationally  for full powers for their enhanced Central Banks to resume their old  roles. The rest of the Eurozone continues under its current legal framework, using the present   institutions.

 

John Redwood

 

             Distinguished fellow of All Souls College Oxford . 

 Lectured on the Euro  at Oxford,  Cambridge, Middlesex Business School  and other universities.

 

              He wrote one of the two Penguin books on the Euro.  His  “Third Way Which way?” set out a new way of analysing public and private sector activities. His  “After the Credit Crunch “   and  “Surviving the Credit Crunch”  provide commentary on the recent economic and banking crises.

 

               He has chaired international  industrial businesses, and  been  a Director of a bank and of various financial sector companies.

 

         All four of my tax sketch people would be surprised if they found out that the government’s wish for people to pay a higher overall rate of tax was directed at them. They do not see themselves as tax avoiders. They, after all, are doing things the government wishes to encourage by offering them lower tax rates.

          Charity, the retired accountant, has always in the past been a Conservative voter. She is not entirely happy with the Coalition, and is particularly concerned that it is unwilling to bring powers back from the EU which she did not want surrendered in the first place.  She would not vote UKIP in a General Election, as she does not want to end up with a pro EU MP, but she is asking herself whether she should vote UKIP in the next European election to show how she feels about the EU issue. She will watch to see if Mr Cameron follows up his veto on the latest Treaty,which she was pleased about.  She was not pleased to learn that the Age Allowance will be phased out, though relieved to discover that it was not going to be cut in cash terms.

       Prudence has usually voted Lib Dem. She particularly liked their promise to avoid tuition fees for young people going to university. She feels badly let down by them, as her youngest child is about to go to university and will be caught by the large increases in fees. She does not have enough income herself  to pay her daughter’s bills. She was thinking about voting Green next time, but is worried that they will put her energy costs up too much. She is genuinely floating.  

         Mr Reader, the teacher, has always been a strong Labour voter. Mr Blair tried his patience, as he did not think he was a good enough socialist. He approved of Mr Brown’s spending plans, but was worried by the economic collapse on Labour’s watch. He thinks Mr Miliband should be tougher on the rich and the bankers, and is disturbed by the Labour reluctance to support the teachers’ unions wholeheartedly. In the end he will probably vote Labour again.

           Ed, the businessman, did not bother to vote in 2010. He wanted the Conservatives to offer a strongly pro enterprise package, but did not see it. He likes what they are doing on Corporation Tax, but does not like some of the anti business rhetoric he hears from the Coalition, or their personal tax  and red tape policies. He probably won’t vote next time either, unless some party comes up with a package which he thinks makes sense for people like him, and for the smaller companies he helps.

 

 

 

          It has become politically fashionable to attack tax avoidance. Many try to lump it in with illegal tax evasion, condemning both. The Chancellor tries to draw a  necessary distinction between aggressive tax avoidance, which he dislikes, and run of the mill tax avoidance which many undertake. It is time politicans and the government recognised that a lot of tax avoidance is commonsense, much of it is actively encouraged by the government, and some of it has a moral purpose.

          I want to give four examples  of people who lower their overall Income Tax rate or  Vat bills  for good reasons.

         The first is a retired accountant called Charity. She has a decent private pension from a tax sheltered pension fund. Her retirement income is bigger than she needs, as she lives modestly. Her leisure pursuits of listening  to the radio, going for walks with her dog, and attending the local theatre are not expensive. She works one day a week as a volunteer for the CAB, is a JP, and is actively involved with a local animal charity. She is a very generous regular donor to the charity, using the government’s tax saving scheme for her donations. Both she and the charity benefit from the tax relief or tax avoidance on offer.

           The second is a working mother called Prudence. She had ten years off work to bring up her children. When her husband left her she got an administrative job with the local Council. She is now making accelerated payments into her pension fund, as she wants to provide for her own old age, thinking it wrong to rely on means tested benefits as a pensioner if you can save for  yourself. Her tax charge is lowered thanks to the pension tax reliefs available.

          The third is a senior teacher called Mr Reader. He believes in good levels of public spending, especially for education, and has devoted his life to teaching, even though it used not to be that well paid. Following Labour’s good pay rises, he now has something spare each month to save. He lends it to the government through tax privileged national savings. He pays PAYE Income Tax. Because he  does not want the hassle of having to declare savings income he  takes advantage of the tax breaks on offer. He feels his savings contribute to higher state spending and think the tax breaks are moral.

         The fourth is a successful small business owner called Ed.  He now mentors local small businesses, and gives time as a volunteer to help start ups in his town. He has decided he should always try to employ sole traders to do any work he needs doing at home – plumbing, building, electrical work or help with the garden. He decides  he will only employ small businesses that are not registered for VAT, saving himself and them the VAT burden. It  means he can spend more on what he needs, and give them a bigger boost to their turnover as a result.  He is therefore avoiding substantial Vat sums.

         The government rightly welcomes the Big Society. That requires charities and volunteer activity to flourish. Tax breaks drive much of this generosity of spirit, and help furnish the charities and other institutions with the cash needed to organise the volunteers and create the work programmes.  Politicians need to be careful lest in their enthusiasm to lump tax avoidance in with tax evasion they do damage to that strong UK tradition of volunteer work and giving, and undermine some of the government’s own tax  saving schemes which have been designed to influence our conduct. They also need to be aware that tax savings drive much of the savings and pensions efforts of people, a bulwark of a free society. It is these savings which keep many people away from needing more benefits from the state in hard times and old age.

 

         My proposal for selected Euro exit recommended an overnight change to all bank accounts following hasty and secret week-end meetings to trigger the exit. It does not allow advance printing of new notes, as this would alert people to the coming changes and trigger a run on the banks in the affected country.

            I suggest that new drachmas or escudos be issued at the exchange rate of one drachma or escudo for one Euro. They would not, of course be worth one Euro, as the new currency would devalue as soon as it traded against the Euro. That would be one of the main purposes of issuing a new currency, to allow a devaluation to aid adjustment of their economies to the competitive realities. The one to one rate would be penal exchange rate for all those holders of Euros in the  exit country that you decided had to take some of the losses resulting  from the economic failure.

             Holders of Euro banknotes outside the EU would be unaffected by the exit of say Greece. They would still have Euros the day after the exit. Greek citizens would be expected to switch their Euros at the one to one rate into drachmas. If they turn up at the shops the day after the creation of the drachma, their Euro notes are accepted as drachma notes pending the issue of new drachma notes to them  at the one to one exchange rate. If a foreign non EU tourist turns up in Greece with Euros they would be able to go to a foreign exchange shop and get an enhanced number of drachmas at the market rate as a normal foreign exchange transaction.

             During the transitional period some Greeks would be tempted to take Euro notes out of the country and to switch them into other hard currencies. The scope for this would be limited, as from the moment of exit and the creation of the drachma any money they withdrew from their bank accounts would be drachmas. They would no longer be able to withdraw Euro notes. The notes they currently have would not be allowed out of the country legally, and would be subject to whatever policing arrangements the Greek state wanted to impose to try to prevent cheating.

              The issue to be resolved for the EU is the treatment of Euro notes held by non Greek EU nationals working or living in Greece. The simplest way forward would be to allow them to keep their Euros and to exchange them at market rates when needed into drachmas. The EU might, however wish and be able to assert its jurisdiction to make defined categories of people suffer the loss on their notes as Greek citizens would do.

 

              Last night on Any Questions when the audience was asked this question the large majority said “No”. Nigel Farage and I both argued against compulsory publication.

              I said that all candidiates for UK elected office should be prepared to assert or sign a declaration that they are paying all the usual range of UK taxes and are UK onshore taxpayers. MPs have to declare outside earnings. The same rule could usefully apply to elected Mayors and Police Chiefs once elected.

               There are three main arguments against requiring publication of tax returns.

               The first is it would reinforce the tendency of elections to be about individuals and their personal lives rather than about public policy and what they will do for the electors. The media fasciantion with the exchanges between Boris and Ken over personal tax and income is crowding out the more important matters of what Ken or Boris would do to the Council Tax, the policing, and the transport of London.

             The second is it could lead to very misleading jibes about tax avoidance. If Candidate A and Candidate B have the same income, but Candidate A is saving the maximum permitted for his pension and Candidate B is putting aside the minimum, Candidate A will be paying less tax. Does this make him a nasty tax avoider, or a prudent man who does not wish to be a burden on taxpayerrs in his old age? Is Candidate B the more worthy because he is paying more tax, or feckless because he is not using a legitimate tax saving device to provide for his own old age?  Will any of these nuances come across in the noise of the headlines about tax rates?

              The third is how far back will all this go? Will it put goood potential candidates off because they have been successful in the past and have no wish to share all the details of their business and personal finances with everyone else?

               We are told this all happens now in American Presidential elections so it should happen here. The US President is a far more powerful office than that of an MP so maybe different rules should apply. I am not sure, however, that  Mr Romney’s low tax charge on his successful career to date should be a major preoccupation when deciding who would be best to lead the world’s superpower. I would like to know more about what he might do in Afghanistan or how he might change tax rates for all were he President. It appears he paid all the tax he had to.  I have no problem with the fact that someone managed his tax affairs well, if he behaved lawfully.