Update No. 91 – 21/12/12

A positive week led to a 1.33% rise in the EGP price to $1.20462, less than 0.5% behind the all-time high.  This came against an also impressive 1.05% rise for the ASX200 (it sits the highest ever since EGP’s inception).  It will be interesting to see if the strong performance over the last few months can be continued into the New Year.

I have mentioned the ‘Law of Unintended Consequences’ before, in Update 71, when referring to the US being the largest emissions reducer in the world despite having resisted all global pressures to comply – due simply to the ‘shale gas revolution’.

Another brilliant example of the law I observed a few weeks ago here.  Basically in order to avoid complying with a 21% tax on movie tickets applicable as part of Spain’s austerity measure, the proprietors instead sell an expensive carrot, which draws a 4% tax and give away a ‘free’ movie ticket.

This could be viewed one of two ways.  It is either representative of everything that is wrong with Spanish taxpayer culture and representative in large part of why they face the issues they do. 

Alternatively, it is simply a poorly designed attempt to raise revenue.  Taxes hastily created often look this way and prove hard to enforce and frequently don’t achieve their revenue goals as a consequence of this.  The ‘Super-Profits Tax’ enacted as the ‘MRRT’ recently in Australia is similarly unlikely to raise anywhere near the revenue that was hoped.

Taxes are a fact of life in modern society, but we should hope our Governments have properly considered all the likely consequences a tax might have and not just what they can do with all that lovely revenue – Tony Hansen 21/12/12.

EGP Fund No. 1 Pty Ltd. Up by 16.96%, leading the benchmark by 1.2% since July 1^st. Since inception, EGP Fund No. 1 Pty Ltd is Up by 20.46%, leading the benchmark by 16.81% all-time (April 1^st 2011).