Economist 7/15/16

  1. Germany exempts most heirs of businesses from inheritance tax, provided they do not lay people off for seven years. That, however, can lead to rather perverse outcomes. Heirs of non-business wealth face a steep tax schedule that rises to 50% at the top. Inheritors of businesses often get away with paying nothing.This means that even though Germans pass on more than €200 billion ($221 billion) of wealth each year, their government collects very little inheritance tax: €5 billion to €6 billion a year, less than 1% of overall tax revenues. A glance across Europe reveals many options. Countries such as Austria, Portugal or Cyprus no longer have any inheritance tax at all. Others, such as France, Spain and Belgium, tax inheritances at relatively high rates (though with complex loopholes). A third group, including Greece and Germany, is in the middle, combining low tax rates with small exemptions (Greece) or high rates with big and complicated exemptions (Germany).The proposed new system tightens some loopholes. Heirs of businesses worth more than €26m will have to show that they cannot pay the tax out of their private wealth to get off free, while those inheriting more than €90m will get no exemptions at all. But there are so many other tweaks that the new system will raise only an additional €235m, a pittance.
  2. LOOKING to the natural world for engineering inspiration is an idea at least as old as Leonardo da Vinci.Copying nature directly, though, has often proved hard.Many creatures flap wings, or wing-like structures, to “fly” through water. That is something human engineers can aspire to imitate because the buoyancy of water provides free lift and its density makes propulsion easier. And, as they write in this week’sScience, a group led by Kit Parker of Harvard University have done just that. They have built a robotic stingray that imitates the motion of its biological counterpart.The ray itself is a so-called soft robot, a type of ’bot that has gained prominence of late. Soft robots, which are made of materials such as latex and silicone, are able to squeeze through tight openings, handle fragile objects.Yet most soft robots are propelled by pneumatic pressure or cables that are, in turn, driven by bulky, rigid motors.Dr Parker and his team chose rat muscles for their rays. They grew rat-muscle cells in culture and then “printed” them onto sheets of elastomer that were to act as the surfaces of a robo-ray’s wings.
  3. Kurdish flags now fly over the remains of deserted and destroyed Sunni Arab villages and towns. Time and again, the peshmerga have chased the jihadists out. In Syria, too, Kurdish forces boast similar gains. Thanks to the war on IS, they control some 600km of Syria’s 800km northern border with Turkey. In March they declared their own autonomous region there, Rojava.In Iraq the area ruled by the Kurdistan Regional Government (KRG) has been beyond the effective control of Baghdad since 1991; only Kurds over 40 now speak Arabic there.Having struck oil, the KRG’s leaders sell it independently of Baghdad, exporting it through their own pipeline to Turkey.In a referendum in 2005, 99% of KRG voters chose Kexit. A decade on, Kurdish officials say they need a second vote, but will not name a date.Infighting is the main reason for delay. Having taken back control of their territory in Iraq and Syria, the Kurds have proved incapable of sharing it.A Syrian analyst counts 45 in Rojava alone. In Iraq there are almost as many.
  4. In Iraqi Kurdistan, the core of their putative state-in-waiting, the two dynasties,Mr Barzani and Jalal Talabani that fought a nasty civil war back in the 1990s are also at loggerheads again.Such rivalries make it all the easier for regional powers to turn the Kurds into their pawns. In 1996 Mr Barzani’s men rode the tanks of their former murderer, Saddam Hussein, into Sulaymaniyah. Mr Talabani needed Iran’s forces to win it back. Today Iraq is preoccupied with its own fighting, and the chief puppeteers are again Turkey and Iran.Mr Barzani control of KRG oil revenues, but also makes him dependent on the Turks. Loth to lose influence, Iran is helping Mr Talabani’s men finance a second pipeline from its refineries in Kermanshah to the oilfields of Kirkuk, which Mr Talabani’s forces control.Iran and Turkey are training, arming and directing rival Kurdish militias, say Kurdish intelligence chiefs from both sides. Mr Barzani echoes Turkey in describing the YPG as the Syrian arm of the PKK, the Kurdish armed group waging a bombing campaign against the Turkish state.Mr Talabani (with a nod from Iran) helps build them up. Both armed groups operate from his territory, and the PKK is said to have helped him bolster his hold on Kirkuk.
  5. In the meantime, the rivalry between Turkey and Iran is prising Kurdistan apart. Neither country wants to allow the birth of a Kurdish state that could inspire and lend material assistance to their own Kurdish separatists.Kurdish nervousness is entirely understandable. Twice over the past century, in 1922 and 1946, Kurds have declared their own state only to see stronger powers crush it within months. Even so, they might have done more to prepare their institutions for government. Too often, the leaders of the KRG have replicated the bad practices of their neighbours. Having taken control of the production and sale of oil, the Barzanis seem bent on concentrating power in their own hands.La Familia” is the nickname Kurds have given to the president, his son and intelligence chief, Masrour, and his nephew and prime minister, Nechirvan.As long the revenues kept rolling in, no one quibbled much.Oil prices have also plummeted. As the coffers emptied, the critics brayed.. The tiny KRG (population around 5m) has an astonishing $20 billion of debt, and its banks have exhausted their liquidity.Yet the KRG is worth saving. It retains a surprisingly tolerant multi-faith air, where ministers sip vodka and orange on a Ramadan afternoon in restaurants playing Lebanese love songs.
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