Cyprus-Forum.com

[Alexandros Lordos]

TC state should not be forced to state its tax policy harmonized with GC state or vice versa. Tax competition between neighbouruing states is a very well reserached subject in economics. There are more benefits then costs of tax competition.

So this is a matter that we should leave to the experts (rather than leave it to the politicians trying to make a point either in favour of "strong federalism" or in favour of "bizonality"). Don't you agree?

I can see the point about there being more benefits than costs to tax competition, after all, this is the whole point of the free market philosophy: Competition is healthy. If states have to compete to attract business by setting their level of company tax accordingly, then so be it.

In the Annan Plan, ALL income tax was constituent state prerogative, while the Federal State would collect and then re-distribute VAT to the constituent states. I am not sure what the consequences of such a system would be, but to me it sounds like there is room for abuse here by the two constituent states (not to mention room for deadlocks in the allocation of the annual Federal budget). If constituent states set ALL income tax, but they still have an alternative source of income, then that leaves room for extreme and opportunistic taxation policy - totally slashing company tax, for instance, safe in the knowledge that the Federal budget will bail them out in the end. So there is room for revision here, perhaps the Federal State can collect part of the income tax, according to a country-wide rate, and use that for its running expenses and development policy (if it will have such a function), while the constituent states collect their own income tax as well, at whatever level they decide, plus whatever VAT proceeds occur within their Constituent state.

So I guess I agree with most of the comments made earlier.

(Note: I have just realised what a dangerous mess the Annan Plan taxation structure would have caused. Is there no end to the weaknesses of that plan?)

[turkcyp]

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[turkcyp]

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[MicAtCyp]

The link on page 1 works only for one day.
Please use the following standard link when referring to Politis articles and just change the article number
http://www.politis-news.com/cgibin/hweb ... Α@&-P

[MicAtCyp]

In no federal system there is a hierarchy between federal and state systems. There are always areas where federal government has the final authority and federal laws has to be accepted and all local and state laws should be in compliance with these federal laws. And there are areas where states has the ultimate authority and where such thing as federal law does not even exist. Once you have made this separation of authority between state and federal of course every state law will have to be in compliance between the related federal law, but on the contrary the federal government will not be able to make laws relating state areas.

I don't understand what you are talking about here. What you say is contradictory by itself. Anyway it is clear that Papadopoulos refers to the "hierachy" as described in the Anan Plan. Contrary to what you said there is no Federal system in which the laws of the Central state stand on top of the hierachy scale. What perhaps you are trying to say here is that the Central state has limited fields of juristiction and that only to those fields it's laws have any hierachy. This is true, on the other hand though the "stronger" the Federation the more are the fields the CS has juristiction. The Anan Plan striked all fields down by eliminating even the hierachy of the laws of the CS even in the fiels it was supposed to have juristiction! In other words it was turning the Federation into a confederation!

Anyway my prediction is those 25 points will just receive 25 Nos from the TC/Tr side if and when negotiations start. We got used to that. . .

PS. I am very disapointed from the fact that from the so many TCs in the forum only Turkcyp cared to participate in this discussion. Besides Turkcyps views seem to be away from the majority of TC views, so in the end we GCs are totally in the dark as to the thoughts we would like to know.

PPS. Katsourides of Akel said the 25 points are a myth. Initially we heard of 13 points made up at the National council plus 3 added by Papadopoulos, i. e total of 16. . . . .

[turkcyp]

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[MicAtCyp]

BINGO.

You explained better than I did.

Well, what can I say, the demon of my keyboard left 2 important words out distorting the whole meaning of what I wanted to say.

OK I rephrase:

Anyway it is clear that Papadopoulos refers to the "hierarchy" as described in the Anan Plan. Contrary to what you said there is no Federal system in which the laws of the Central state
DO NOT stand on top of the hierarchy scale. What perhaps you are trying to say here is that the Central state has limited fields of juristiction and that only to those fields its laws have any hierarchy.

There is no such thing as central state, or federal state as a separate entity next to constituent states. What you have is sovereign states deliberately and voluntarily restricting their sovereignties, and giving upon agreed portions of their sovereignties to federal government to be used by the federal government. In other words without the states there would not be a federal state, so you can not talk about federal state as a separate state like states. Federal government derives all of its powers because states choose to give those powers to federal government.

One way of forming a Federation is like you described i.e the component states assigning part of their powers to the Federal Government (since you prefer this term). I really wonder if such a Federation was ever formed through history without actually be a confederation. Can you give me an example? I don't think the case of Cyprus could be seen that way.Here we have the legal Government that changes itself to a Federal one assigning part of its powers to the Component States.

About the hierarchy issue and its application in Annan Plan, I do not think you are right. This is ultimately a matter of law and I am no lawyer but just done extensive research in these matters just because I am a Cypriot. And in no place in Annan Plan I remember seeing any wording that implicates that under the areas that fall under federal jurisdiction state laws can be not in compliance with federal law. If you can point those articles to me I will really appreciate it.

Here it is quoted from page 8 of the plan. In plain language each state can do whatever it likes.

The federal government and the constituent states shall fully respect and
not infringe upon the powers and functions of each other. There shall be
no hierarchy between federal and constituent state laws.

[cannedmoose]

PPS. Katsourides of Akel said the 25 points are a myth. Initially we heard of 13 points made up at the National council plus 3 added by Papadopoulos, i. e total of 16. . . . .

Better 16 points than 13... I'm sure the announcement of a '13-point plan' wouldn't go down well in historical terms.

[Kifeas]

PPS. Katsourides of Akel said the 25 points are a myth. Initially we heard of 13 points made up at the National council plus 3 added by Papadopoulos, i. e total of 16. . . . .

Better 16 points than 13... I'm sure the announcement of a '13-point plan' wouldn't go down well in historical terms.

“Politis” newspaper, being anti-Papadopoullos as usually, tried to discredit him and his willingness for a solution by expanding the number of areas (points) that he wishes changes to occur, in order to show to the public that he has too many demands that result to a hypothetically complete reshaping of the A-plan and therefore a non-starter, as Talat himself declared these changes. Of course Bananiot said that they were even more, some 40 areas in total number.

For example, items 15, 16, 17 and 19 can all go the same chapter, which is that of unified economy. Look at item 16 (Only one central bank) and item 17 (Single monetary policy.) Aren’t they almost the same thing? Yet, “Politis” had chosen to list them as 4 separate and different issues. (?)

Items 21, 22, 23 can also go under one chapter, which is that of the implementation of the agreement (solution.) The same goes for items 11 and 12, which can also go under one chapter, which is that of security.

[Kifeas]

There is no such thing as central state, or federal state as a separate entity next to constituent states. What you have is sovereign states deliberately and voluntarily restricting their sovereignties, and giving upon agreed portions of their sovereignties to federal government to be used by the federal government. In other words without the states there would not be a federal state, so you can not talk about federal state as a separate state like states. Federal government derives all of its powers because states choose to give those powers to federal government.

What differentiates federation from confederation is that, in federation once states decided to give those sovereign powers to federal government it is very hard (almost impossible) to take them back, but in confederation it is understood that the sovereign powers that is handed to federal government can be taken back by the states relatively easily.

There are two ways in which a political system evolves or develops into a federal one. The first is what you describe, i.e. two pre-existing sovereign states unite under one federal (or co-federal if they so wish) roof and grant to the central (federal) government parts (aspects) of their sovereignty. The other way is that of a pre-existing unified under one single government, country, which splits out into two federal zones and grants to them aspects (parts) of its sovereignty. The first is usually called a “roll–in” sovereignty and the second, a “roll-out.”

In the case of Cyprus, it is obvious that we have the second case, that of the "roll-out" federation. Unless you want to say that the “TRNC” or “north” Cyprus is a pre-existing sovereign state from a legal perspective or an autonomous separate region of Cyprus from a historical perspective, and not as a result of an invasion and illegal occupation by a third country and all the rest that go with it.