One more P2 presentation to go before year end. Plans for Christmas get-togethers in progress. Taking a moment to be reflective and if you are in the same head space, perhaps you would join me.
In the new world order, intangibles have become the black sheep of the family. In the name of certainty, we look for what is tangible, people and assets are real, the rest is just subject to manipulation and therefore potentially fictional.
But here is what I am comtemplating:
- Intangibles are real and have real substantive value. Countries clearly need the investment necessary to move up the chain and grow skills (ie intangibles).
A lot of focus on tax reform is on enabling allocation of resources to developing countries, but what if what if what countries need are not just a system that enables allocation of tax dollars, but more importantly the ability to develop intangibles through investments and knowledge transfer?
- By building a system that relegates intangibles to second place, in the name if addressing base erosion, are we not pretending that something that is so critical does not carry a premium?
- And if you pretend something doesn’t carry a premium, and you don’t measure and reward it properly, how do you grow it?
- Finally, we’ve moving through a major tax transformation with the goal of more equitable distribution of resources. But before covid, the intra-nation equity conditions was improving. Instead it was the domestic wealth distribution that was deteriorating and giving rise to political dissent (and polarisation). Should the laser focus be more on domestic wealth equity policies instead of wealth distribution between countries?
Love to hear your thoughts.