 |
|
|
|
|
|
|
|
||
 |
|||||||||
|
www.freedomandprosperity.org |
|||||||||
|
|||||||||
 |
|||||||||
|
The views expressed by Andrew Quinlan and Dan Mitchell on this weblog are solely their own and are not necessarily those of their employers, The Center for Freedom and Prosperity Foundation and The Heritage Foundation, respectively. |
|||||||||
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The Market Center Blog |
||||||||||
|
Observations and insights on the global fight |
||||||||||
|
CF&P's Market Center Blog Archives |
||||||||||
|
Tuesday, August 31, 2004 ~ 11:07 a.m., Dan Mitchell Wrote: Republicans formally backed a platform Aug. 30 that makes the permanency of recent tax cuts the centerpiece of their economic policy in the next few years. The GOP, during the
Republican National Convention, also called for undertaking tax reform during President Bush's second term but provided few details about what such an effort would look like. The party's positions on these and
other tax and budget items were included in a broad platform document that was adopted during the first day of the convention. Bush is expected to highlight many of them during his speech to accept his party's
nomination for a second term late Sept. 2. The GOP credited the tax cuts undertaken by Bush in his first term with what it said is strong economic growth. "Now we must keep our economy on the right track by
preventing taxes on families from going up next year, making the tax relief of the last four years permanent, and reforming the tax code to make it simpler, fairer, and more growth-oriented," it said. Other
elements of the party platform call for undertaking a fix for the alternative minimum tax, fighting any attempt by the United Nations to impose a global tax, and requiring a supermajority vote in both houses of
Congress to raise taxes. ..."Instead of being simple, the current tax system is needlessly complex, making it susceptible to abusive tax avoidance schemes," the GOP said. "Instead of being
efficient, it punishes hard work, discourages savings and investment, and hinders the international competitiveness of U.S. firms. Instead of being fair, it is out of line with our basic values and undermines
our sense of fairness. Instead of being predictable, it is highly unpredictable and uncertain. Tax reform is necessary to achieve the simplicity, efficiency, fairness, and predictability that the American people
deserve, and to give all Americans the freedom of determining their own spending priorities." Making the tax cuts permanent would achieve many of these goals, the GOP said, particularly in the area of the
estate or death tax.
Tuesday, August 31, 2004 ~ 10:30 a.m., Dan Mitchell Wrote: Laying out a conservative economic agenda is the best way for the president to solidify and energize his conservative base of voters. Karl
Rove has spoken many times of the fact some 4 million to 6 million conservatives did not vote in 2000, which caused a perilously close election. Conservatives might wonder if a Bush victory is a conservative
victory at all if there is no mandate for an economic agenda that promotes freedom and prosperity and smaller government. Mr. Bush is seeking an electoral mandate to do ... what exactly? ...The left's
strategy to win the election of 2004 is to seduce voters with free government services and confiscatory taxes on the rich that will very soon reach deep down into the pockets of the middle class. They see
America as an extension of the socialist nations of Europe. As Democratic strategist Stan Greenberg has argued many times, Democrats can win by extending the ruinous welfare state programs of
the 1960s to the vast middle class.
Tuesday, August 31, 2004 ~ 8:19 a.m., Andrew Quinlan Wrote: French President Jacques Chirac on Friday (27 August) called on the European Union to support the creation of industrial
champions...."Let's strongly support the creation of European industrial champions. We have all the assets and all the talent that we need to succeed", he said according to AFP.
Tuesday, August 31, 2004 ~ 7:51 a.m., Dan Mitchell Wrote: ...there is also a sense that the GOP, especially its Congressional wing, has been drifting from the principles that brought it to power. In 2000,
Candidate Bush described the GOP as the party of reform--from Social Security to Medicare, greater accountability in education and the
"compassionate conservatism" of faith-based charity. Four years later, Americans are left wondering if Republicans still believe in that agenda,
or if they're slowly being captured by the inertia of Beltway incumbency. ...Perhaps the biggest question is whether the GOP can still rightly call
itself the party of smaller government. The GOP Congress--as well as some of its state parties (Ohio, New York)--has seemed only too comfortable acting as the party of the incumbent status quo, dolloping
out pork to any interest group that might help it remain in power. The result has been the largest farm bill in history, as well as the largest new
entitlement (for prescription drugs) since the 1960s. Huge energy and highway spending bills failed not from principled opposition but from internal squabbling. If Republicans want to see the perils of this
strategy, they might look at the blue (Democratic) patches of the electoral map that are Illinois, New Jersey and Long Island. Once GOP strongholds, those areas all turned left after Republican machines grew
corrupt and became little different from tax-and-spend Democrats. It's no accident that the dynamic and growing parts of the GOP are in the South and West, in places like Florida, where Governor Jeb Bush has
promoted school reform, or Colorado, where Governor Bill Owens has returned tax surpluses to voters instead of growing the government. ...Americans want a party that will give them more control over their
finances and pensions, their health care, and especially their time. We'll be looking for evidence this week that the Republicans want to be that party.
Monday, August 30, 2004 ~ 1:09 p.m., Dan Mitchell Wrote: After New York's Republican mayor, Michael Bloomberg, gives the opening speech at the upcoming GOP convention tonight, he should
stick around to hear President Bush talk tax policy Thursday. Bush gave Americans the largest tax cut in more than two decades - while Bloomberg imposed a series of large tax hikes, which largely offset the
benefits of the Bush cuts for New Yorkers. Bloomberg's tax increases tarnished the GOP's tax-cutting image, and he added insult to injury with a tax reversal like that of the first President Bush. In his 2002
inaugural address, Bloomberg declared: "We cannot repeat the mistakes of the past. We cannot drive people and business out of New York. We cannot raise taxes." But Bloomberg proceeded to hike the
city's cigarette tax rate from 8 cents to $1.50 per pack, increase property taxes 18 percent, and raise income and sales taxes. Bloomberg's high-tax policies are worse than a repeat of New York's
past mistakes. Today, skilled workers and investment capital are more mobile than ever, and are more likely to flee high-tax jurisdictions. The types of industries that New York depends on, such as media and
financial services, are particularly footloose. Despite the many advantages of New York, intense global competition is forcing businesses to minimize every cost, including tax costs.
Monday, August 30, 2004 ~ 10:23 a.m., Dan Mitchell Wrote: Plans to reform the Stability and Growth Pact - the set of rules underpinning the euro - are set to be unveiled by the European
Commission this Friday (3 September), according to French financial daily, Les Echos. ...First, the circumstances under which a so-called excessive deficit is permitted are expected to change. Presently, a
member state may run a budget deficit over three percent only in the event of a severe recession. But the reforms will propose that a longer period of soft growth will allow member states to break the three
percent ceiling. Second, Brussels is likely to soften the deadlines it imposes on EU countries to reduce their deficits. Currently, a country in
breach of the pact is given four months to publish a plan to get the deficit down and then has one year to implement it. ...The changes are
likely to be broadly welcomed in Paris and Berlin, the two countries that have caused most trouble by being repeatedly in breach of the Stability Pact.
Monday, August 30, 2004 ~ 8:54 a.m., Dan Mitchell Wrote: The Republican recipe is not to bother with outreach among liberals and liberal-leaning moderates, but to concentrate on turning out
conservatives and moderate conservatives, a center-right coalition. Whenever Republicans have won major nationwide landslides in recent years--1980, 1994 and, to a lesser extent, 2002--they've done so by
dramatically increasing turnout of their voters.
Monday, August 30, 2004 ~ 7:13 a.m., Dan Mitchell Wrote: Italy's newly appointed finance minister Aug. 26 spoke out in favor of Prime Minister Silvio Berlusconi's controversial 12.5 billion euro ($15.4
billion) tax cut package, the new minister's first official comments on the subject. ...In the finance minister's comments, carried by state
broadcaster RAI, Siniscalco said that the proposed cuts in marginal tax rates and more of what he called "capitalistic measures" would help
spark the Italian economy toward faster growth. He said that the cuts would be funded by reductions in other parts of the budget, from the privatization of state-owned companies, and by rising tax revenue
coming from improved economic growth. "The Italian government is determined to break out of what has become a low-growth equilibrium," Siniscalco said. "Italy has been implementing reforms
aimed at increasing growth and Italy is now ahead of France and Germany in this regard."
Sunday, August 29, 2004 ~ 3:45 p.m., Dan Mitchell Wrote: The United States needs to adopt a value-added tax. Passage of the prescription drug legislation last year demonstrated that there is no
longer any hope of holding the line on government growth - especially when Republicans voted for the multitrillion-dollar entitlement program. That being the case, the only relevant question is how to
finance the growth of government. ...federal spending would rise to about one-third of GDP over the next several decades, absent substantial and highly unlikely changes in major entitlement programs.
Given that Republicans just created one of the biggest such programs in history with the prescription drug legislation and that Democrats want to expand healthcare to the uninsured, we can assume this is a
bare-minimum estimate. In effect, the United States would slowly move toward European levels of spending as a share of GDP. And if we spend like Europeans, we will have to tax like them too, and embrace a
value-added tax. ...The lack of transparency and the low economic cost of a value-added tax make it possible for this tax to raise substantial revenues relatively easily, both politically and economically. The
average VAT in Europe is 20%, and European governments raise about one-third of their total revenue from consumption taxes, including excise taxes on gasoline, tobacco and other items. ...Conservatives
often complain the value-added tax is a money machine to finance government growth. There is truth in this. But government is growing rapidly. The only real alternative is to raise existing taxes significantly.
If we did that, it would mean higher tax rates and abolition of many pro-growth elements of the 2001-2003 tax cuts, such as bonus depreciation and lower rates on capital gains and dividends.
Sunday, August 29, 2004 ~ 12:15 p.m., Dan Mitchell Wrote: Observers dismayed by the bitter partisanship of this presidential campaign should be happy now that George W. Bush and John Kerry
finally agree on something: It turns out they both believe in using the government to silence their critics. Kerry has filed a complaint with the Federal Election Commission (FEC) demanding the removal of TV ads
that question his Vietnam record. ...the president has called for the elimination of all ads sponsored by independent political groups that, like SBVT, are tax-exempt under Section 527 of the Internal Revenue
Code. ...One suspects that Bush's problem with 527s is not that they're unaccountable to the public but that they do not answer to him. Although their preferences are obvious, they can still act independently,
an ability that is especially important now that McCain-Feingold has silenced traditional advocacy groups at election time. ...FEC Chairman Bradley Smith['s] ... response to Kerry's complaint about Swift Boat
Veterans for Truth revealed a clearer understanding of what's at stake than either Bush or Kerry has demonstrated. "I think it's great we live
in a country where 260 average guys can go out and put their point of view out there before the public and influence a major presidential
race," Smith told Bloomberg Television. "I am not one who agrees it is illegitimate for citizens to take a stand on these kind of issues and only
the politicians should be able to say what they want about the issues they want to talk about."
Saturday, August 28, 2004 ~ 11:05 a.m., Dan Mitchell Wrote: Census data tend to imply that people are stuck in the same income group year after year, when in reality there is substantial upward
mobility. Almost everyone spends some time in the bottom quintile when they are starting out in life or because they have suffered a temporary loss. But they move up the income ladder and rebound from setbacks.
...Earlier data have shown that a large fraction of those who were in poverty or a low income quintile one year were out of poverty or in a higher quintile within a year or two. Most people know this even if the
Census Bureau doesn't tell them. A 2003 Gallup poll found that 31 percent of the population believes it is very likely or somewhat likely that they will become rich. No doubt, an even higher fraction believes
that their children have a good shot at it. Indeed, almost every generation of families is better off than the earlier one. Not only have real incomes risen sharply over time, but most people are well aware
that they are better off than their parents. A 1996 Reader's Digest poll found that while 18 percent of people considered themselves to be in the
lower class as children, only 6 percent put themselves in that class as adults.
Saturday, August 28, 2004 ~ 8:26 a.m., Dan Mitchell Wrote: As recently as 1996, the Republican-party platform called for the abolition of the Department of Education as an unconstitutional,
heavy-handed, and ineffective entity. Eight years later, things have changed. Conservatives in New York this week knew there was trouble once they read the first sentence of the platform on "No Child Left
Behind." It read: "Public education is the foundation of civil society." ...The two days of platform debate confirmed the suspicion that the
GOP has become the party of Big Education. On Wednesday, conservative Texas delegate Kelly Shackelford moved to strike the "foundation" sentence, asking "were we not a civil society for the first
hundred years of our country?" English and most of the delegates resisted, insisting the GOP declare its undying support of government schools. So Shackelford offered a compromise: just remove the word
"public." Education as a foundation of civil society was an idea most people can accept. Invoking an idea of tolerance fit for George Orwell,
some delegate objected that without specifying public education over private and religious education, that sentence would be discriminatory. Shackelford lost again.
Friday, August 27, 2004 ~ 5:12 p.m., Dan Mitchell Wrote: Sweden's minority government is currently engaged in talks with parliamentary groups in an attempt to secure enough votes to pass
planned tax cuts. Prime Minister Goran Persson of the Social Democratic Party, has sketched out plans to cut income tax and wealth tax whilst abolishing the nation's gift tax and inheritance tax.
Friday, August 27, 2004 ~ 3:29 p.m., Dan Mitchell Wrote: ...a delayed flight in Chicago ripples through the air traffic system all the way to both coasts and Europe. To ease the bottleneck, the Federal
Aviation Administration recently summoned all the major airlines to Washington, and after a series of negotiations and FAA threats, United and American Airlines agreed to temporarily move 37 flights out of
peak afternoon and evening travel times. ...But the FAA shouldn't be strong-arming airlines into "voluntary" reductions. Travelers benefit
from amazingly low fares and frequent air service today thanks to airline deregulation, which got the government out of the business of deciding which airlines would fly where and when. ...There's an obvious
alternative to government's bullying: let the market decide. And the quickest way to do that is for the FAA to authorize O'Hare, or other busy airports, to put a surcharge on landing fees during congested
hours. The beauty of a pricing solution is that it would let airlines — and passengers — decide which flights to keep and which ones to delete
from peak periods. ...Airline competition is saving consumers about $20 billion a year on airfares, according to the Brookings Institution. But if
we let government back into the business of deciding which airlines can fly where, those gains are at risk. Far better that we deal with airport congestion as we deal with most other scarcities — by letting the
market decide.
Friday, August 27, 2004 ~ 10:47 a.m., Dan Mitchell Wrote: Speaking to reporters on Wednesday, Estonian Finance Minister, Taavi Veskimagi revealed that the ten new EU member states support the
maintenance of differing corporate tax rates in order to boost competitiveness within the Union. Mr Veskimagi told a news conference that in response to calls from higher taxing member states such as
France and Germany to harmonise corporate taxes, Estonia had sent out a paper on the issue to its fellow new members in order to canvas opinion. "In talks with my colleagues from many new EU member
states, I've gathered a common understanding that competition between all member states has to be maintained," he announced.
Friday, August 27, 2004 ~ 10:00 a.m., Dan Mitchell Wrote: We don't point all this out by way of denying that there are some people with genuine difficulties obtaining health insurance. But there are a lot
fewer than 45 million of them. The Congressional Budget Office estimated earlier this year that the number of those actually uninsured for the entire year is between 21.1 and 31.1 million. Perhaps the best
proxy for who's really in need are the 14.8 million uninsured who the Census lists in households between $25,000 and $49,000 in annual income. States like New York could do a lot for this group merely by
getting rid of the state insurance regulations that make a basic policy roughly 10 times more expensive than it is in neighboring Connecticut.
Better still, Congress could save poor New Yorkers from the tyranny of Albany by putting an end to our Balkanized and anachronistic 50-state insurance market and simply decreeing that there shall be nationwide
commerce in health insurance. They could then buy policies issued in saner states or over the Internet. Equalizing the tax treatment for employer-purchased and individually purchased health care, as
President Bush proposes to do, is another good step.
Friday, August 27, 2004 ~ 8:55 a.m., Dan Mitchell Wrote: How many times have we heard from Al Gore and assorted European politicians that "the science is settled" on global warming? In other
words, it's "time for action." Climate change is, as recently stated by Hans Blix, former U.N. Chief for weapons detection in Iraq, the most
important issue of our time, far more dangerous than people flying fuel-laden aircraft into skyscrapers or threatening to detonate backpack nukes in Baltimore Harbor. Well, the science may now be settled, but
not in the way Gore and Blix would have us believe. Three bombshell papers have just hit the refereed literature that knock the stuffing out of
Blix's position and that of the United Nations... The surface temperature record shows a warming rate of about 0.17°C (0.31°F) per decade since
1979. However, there are two other records, one from satellites, and one from weather balloons that tell a different story. Neither annual
satellite nor balloon trends differ significantly from zero since the start of the satellite record in 1979. ...In two research papers in the July 9
issue of Geophysical Research Letters, two of us (Douglass and Singer) compared it for correspondence with the surface record and the lower atmosphere histories. The odd-record-out turns out to be the U.N.'s hot
surface history. This is a double kill, both on the U.N.'s temperature records and its vaunted climate models. That's because the models generally predict an increased warming rate with height (outside of
local polar regions). Neither the satellite nor the balloon records can find it. When this was noted in the first satellite paper published in 1990,
some scientists objected that the record, which began in 1979, was too short. Now we have a quarter-century of concurrent balloon and satellite data, both screaming that the UN's climate models have
failed... As bad as things have gone for the IPCC and its ideologues, it gets worse, much, much worse. After four years of one of the most rigorous peer reviews ever, Canadian Ross McKitrick and another of us
(Michaels) published a paper searching for "economic" signals in the temperature record. McKitrick, an economist, was initially piqued by
what several climatologists had noted as a curiosity in both the U.N. and satellite records: statistically speaking, the greater the GDP of a nation, the more it warms. The research showed that somewhere
around one-half of the warming in the U.N. surface record was explained by economic factors, which can be changes in land use, quality of instrumentation, or upkeep of records.
Friday, August 27, 2004 ~ 6:22 a.m., Dan Mitchell Wrote: ...local travelers ...signed up yesterday to become "registered travelers" at Reagan National Airport. The test project, which aims to give
frequent fliers a quicker pass through security checkpoints, is already underway at four other airports. It relies on the latest biometric technologies to verify a passenger's identity with increased precision.
Digital fingerprint scans and photographs are already used to identify foreigners traveling on a visa, and U.S. officials plan to encode a facial
recognition technology into passports. ...The form requested a place of birth, birth date, address, e-mail address, home phone number, cell phone number, eye color, U.S. citizenship status, height and residences
over the past five years. Eligible passengers will be able to use the new security checkpoint lane after Labor Day. ...But some security experts
worry that terrorists could apply to become a registered traveler and score an easier pass through security checkpoints. "Registered traveler
is simply putting hijackers on airplanes faster," said Billie Vincent, a former Federal Aviation Administration official. "If you look at 9/11
hijackers, some of them would have qualified as frequent fliers. All they had to do is run a few tests and find out what the parameters were and get people registered."
Thursday, August 26, 2004 ~ 4:00 p.m., Dan Mitchell Wrote: If the European Union is about anything, it is about creating a political and economic space in which every individual - or company - can be
treated equally. Whether French or Lithuanian, your right to buy, sell, invest and work throughout the EU should be guaranteed. José Manuel Barroso, the new Commission president, has shown by his choice of
liberal economic commissioners that he understands that this freedom is the key to renewed prosperity. Unfortunately, this liberal vision is still
contentious in some of the most curious places. Germany and France may have provided the impulse behind the Union - but their attitudes may now prove the greatest threat to the whole venture. ...According to
European Commission figures, the stock of equity capital owned by foreigners in Germany was worth just 12.1 per cent of gross domestic product in 2000. In France, foreign equity was even lower, at 11.9 per
cent of GDP. That compares with 21 per cent in Spain, 24 per cent in Britain, 33 per cent in the Netherlands and 104 per cent in Ireland. In
politically sensitive financial services, the figures are worse. The share of bank assets that were foreign controlled in Britain in 2001 was 51
per cent. In Belgium, it was 25 per cent but in Germany it was just 4.7 per cent. Looking at these numbers and at the reaction to recent takeover attempts, you have to conclude that the EU's biggest
champion of political integration - Germany - hates the idea of working for foreign bosses. By contrast, the most reluctant European when it comes to political integration - Britain - is relaxed about foreign
ownership. ...French attitudes are no less contradictory. According to Jacques Chirac, the French president, we need to abolish more vetoes in the new constitution to build Europe more quickly. But the
government that produces the most high-flown European rhetoric is the worst offender when it comes to applying European law. If Germany is none too keen on free capital flows, France has doubts even about
European free trade.
Thursday, August 26, 2004 ~ 2:33 p.m., Dan Mitchell Wrote: Germany has directly rejected calls by incoming president of the European Commission, José Manuel Durão Barroso, to raise the EU's
budget for the next financial period. ...The current commission, under Romano Prodi, suggested in February this year that the EU budget should be raised from 100 billion euro a year to around 143 billion euro
per year. "Europe cannot have ambitious policies with insufficient money", said the new commission president.
Thursday, August 26, 2004 ~ 11:03 a.m., Dan Mitchell Wrote: Those politicians who propose policies that would restrict trade, increase taxes on capital and/or labor; and increase costly regulations
on labor and business are in effect proposing policies to reduce economic and job growth. Unfortunately, Mr. Kerry proposes to do all of the above. He wants to put restrictions on both current and future
trade agreements — and each one of these would cause a one-time drop in baseline economic growth and a permanently reduced economic
level. His proposals to "tax the rich" would in fact increase taxes on capital — i.e., capital gains, dividends and savings, all of which will
reduce the capital stock. (He has argued that the negatives of his tax increase proposals will be offset by a drop in the deficit, but his new spending proposals exceed many times any possible revenue increase
from his tax package.) Also, his proposals to raise the minimum wage and impose other restrictions on worker employment will only reduce jobs and real wages. Such policies are not compassionate but in fact are
hurtful. Either Mr. Kerry does not or chooses not to understand economic reality.
Thursday, August 26, 2004 ~ 10:30 a.m., Dan Mitchell Wrote: As politicians throughout the European Union struggle with overhauling the continent's underperforming economy, they might find
one answer over a drink at a bar tended by 36-year-old Solange Gellai. For two decades, she worked as a waitress pouring beers, counting change and kicking out drunks. But before Ms. Gellai opened her own
caf last year, Belgian law required her to spend five months taking classes and eight months filling out paperwork to get the necessary permits to start a business. ...Millions of Europeans, from bartenders to
soccer stars, have to deal with what might be called the certification complex -- a requirement that they be certified to pursue their jobs in a
time-consuming process dating back to 19th-century apprenticeships. Economists say it is a key reason behind Europe's high unemployment and lagging productivity. Unemployment in the 12 countries that use
the euro is averaging about 9%, compared with about 5% in the U.S. And it is much harder in Europe to get a new job after a worker is laid off. In the EU, 43% of unemployed people have been out of work for
more than a year; in the U.S., the figure is 12%. And yet, unlike Europe's stiff taxes on labor and generous pensions, the drag from insisting workers be certified gets scant attention from politicians
seeking to overhaul the Continent's underperforming economy. ...Ms. Gellai, the Brussels caf operator, ...is still irked it took so long. "My
biggest surprise," she says, "was that it took a few days for the bank to approve a 40,000 ($49,048) loan and a year for the government to decide I was qualified."
Thursday, August 26, 2004 ~ 8:42 a.m., Dan Mitchell Wrote: The tax burden creates strong incentives to avoid legitimate business. Mandatory social security contributions make up 34 percent of the
wage bill. Employment earnings are taxed at 33 percent, while other types of income are subject to a 15-percent tax. Sole proprietors pay 15 percent on their profits and another 15 percent on that part of income
which they use for their own needs. A pollution tax on packages, enforced from the beginning of 2003, increased the tax burden. Excise taxes are growing rapidly due to Lithuania's obligations to achieve the
minimum EU level. The excise tax on tobacco is set to increase 156 percent by 2009. The excise tax on liquid gas has been raised by 20 percent in 2004. In 2003 the value added tax was levied on certain
goods that previously had been exempt from taxation. Frequent changes of tax laws, numerous tax exemptions and a complicated tax collection system increase the indirect tax burden and lead to the
expansion of the shadow economy. ...Harmonization of excise taxation was intended to protect the interests of member states with high excise taxes at the expense of the consumers in low-excise countries (who
receive lower income than the EU average as a rule). A practice like this is acceptable for the governments in small countries because it implies growing budget revenues. ...Reducing the minimum excise levels
would also be advisable in that increased smuggling injures the most new member states, which administer the majority of the EU external border with less economically advanced countries and suppliers of
smuggling.
Thursday, August 26, 2004 ~ 7:10 a.m., Andrew Quinlan Wrote: Greek Finance Minister George Alogoskoufis announced on Monday that the nation's corporate tax rate will be cut by almost one third to
25% over the next three years. "In the next three years we will...reduce the corporate income tax rate from 35% to 25% and we will simplify
tax procedures," Alogoskoufis told a meeting of the Athens Business Club 2004, a business forum launched ahead of the Olympic Games. Whilst the Greek economy has benefited from the massive sums of
public investment needed to stage the Games, foreign investment has not been so forthcoming, in large part due to the high level of taxation. At 35%, Greece's corporate tax rate is almost on a par with Germany
and France, where the EU's highest company taxes are to be found.
Wednesday, August 25, 2004 ~ 8:30 p.m., Dan Mitchell Wrote: Back in the early 1990s when entrepreneur Chris Whittle launched Edison Schools, his aim was simple: a new model of public education
that would be as superior to traditional public schools as the light bulb was to the candle. Yesterday's dramatic news out of Philadelphia --
where one of America's most troubled urban public school districts has just posted historic proficiency gains -- should bring us closer to that goal. ...The School District of Philadelphia announced the results
yesterday, in what is the first real report card on the state takeover of the city schools two years ago. The scores are remarkable: double-digit
gains in reading and math proficiency... Within these results, those posted by the newer models of schools -- for-profits, non-profits, university-run, and so on -- are particularly impressive. Though the
traditional public schools outperformed Edison in some specific areas, of those institutions running six or more schools, Edison boasted the biggest increase in the percentage of students scoring proficient or
above and the biggest decrease in the percentage scoring "below basic." As the district's reformist CEO, Paul Vallas, points out, these
gains come from students in 20 schools that were among the worst in Philadelphia when they were turned over to Edison. ...If we dwell on Edison here, it's only because when these reforms were launched,
Edison was the lightning rod for the opposition. Apparently many in the city's teachers unions and activist groups could live with a school system in which one in two Philadelphia schoolchildren would never see
a high school diploma. What they couldn't abide was someone offering to do a much better job for -- gasp! -- profit. Their displeasure was both vehement and public. Thugs from the district's unionized employees
broke up a city Christmas-tree lighting concert. Mayor John Street moved into the district's central office in a bizarre effort to derail the plan before it could get started. Advocacy groups sued. The teachers
union ran a primary opponent against Mr. Evans. "The profiteers want to make money off the backs of our children; we say no -- hell, no," the
head of the local NAACP told the Philadelphia Inquirer. In short, it helps to remember that the results we saw yesterday were earned in a bitter political battle fought like Guadalcanal, inch by bloody inch.
Wednesday, August 25, 2004 ~ 11:20 a.m., Dan Mitchell Wrote: One reason 527s are so prominent now is because Mr. Bush made the mistake of signing the McCain-Feingold campaign finance "reform"
that barred big donations to political parties. So 527s have become the new alternative vehicle that Americans passionate about politics are using to exercise their First Amendment rights to free speech. The
difference is that now the campaigns can't control how that money is spent. If Mr. Bush wanted the two major parties to better control their campaign messages, he could have vetoed McCain-Feingold. Some of
us urged him to do so, but his political advisers whispered not to worry, the Supreme Court will take care of it. Well, Sandra Day O'Connor failed too, but in any event since when are Presidents supposed to pass
the buck to judges? In our view, this was among the worst moments of Mr. Bush's term. Having helped to midwife the current campaign-finance system, it ill behooves him to blame others for the
way this world works. The presidential campaign has confirmed that, under the guise of "campaign finance reform," Congress and the Supreme Court have
repealed large parts of the First Amendment. They have simply discarded what were once considered constitutional rights of free speech and political association. It is not that these rights have
vanished. But they are no longer constitutional guarantees. They're governed by limits and qualifications imposed by Congress, the courts,
state legislatures, regulatory agencies -- and lawyers' interpretations of all of the above. We have entered an era of constitutional censorship.
Hardly anyone wants to admit this -- the legalized demolition of the First Amendment would seem shocking -- and so hardly anyone does. ...The First Amendment says that Congress "shall make no law . . .
abridging the freedom of speech, or . . . the right of the people peaceably to assemble, and to petition the Government" (that's "political association''). The campaign finance laws, the latest being
McCain-Feingold, blatantly violate these prohibitions. The Supreme Court has tried to evade the contradiction. It has allowed limits on federal campaign contributions. It justifies the limits as preventing
"corruption" or "the appearance of corruption." But the court has rejected limits on overall campaign spending by candidates, parties or
groups. Limiting spending, the court says, would violate free speech. What is so thoroughly absurd and tragic is how we've come to accept as the "enlightened" position in America that political speech needs to be
regulated as much as the instructions on prescription drugs. These 527s are the inevitable consequence of the fact that Americans who don't have the opportunity to appear on television or write columns for
newspapers want to have a voice in politics. They're also the result of the fact that very rich people - like George Soros - can always find a way to be heard. Campaign finance "reform" holds that only
"legitimate" voices can be heard in a democracy, which should be repugnant to the crowd that usually waxes pious about First Amendment rights. Michael Moore's "Fahrenheit 9/11" is surely as
dishonest as anything the Swift vets can be alleged to have made up. Why not try to ban Moore from making movies? The notion that, politically or legally, only some people have the "right" to say
something during an election runs completely counter to the core intent of the First Amendment. But, hey, what right do I have to say that?
Wednesday, August 25, 2004 ~ 9:45 a.m., Dan Mitchell Wrote: Hungary's budget reflects mostly bad policy-making. The previous Fidesz government shares equally in the blame. His rightest party
moved to increase state wages and put off the needed cuts in the bloated public sector. The Socialists beat Fidesz, in a mild upset, making its own generous promises and largely keeping them. In 2002,
public sector wages went up 40%, mostly with borrowed money. With interest rates high, these costs are a big strain on the budget. On taking office, the Socialists also raised the minimum wage. Suddenly,
Hungarian workers became more expensive and less productive. ...Finance Minister Tibor Draskovics recently introduced belt-tightening measures that, at least, head in the right direction. He has the support
of the junior coalition partner, the Free Democrats, a party that supports tax-cuts and liberal reforms. Yet Hungary needs to stop merely dabbling with reform and get serious about reining in the state payroll
and social security costs, just for a start.
Wednesday, August 25, 2004 ~ 8:12 a.m., Dan Mitchell Wrote: Putting the case for reform of the Inheritance Tax system, the left-leaning Institute for Public Policy Research has proposed a
...system similar to income tax, with a base rate of 22% and higher bands of 40% and 50%. By doing this, the IPPR estimates that 87% of estates would pay less in tax, whilst the government
would receive an additional £147 million in revenues. The present system levies a flat rate of 40% on the value of estates worth more than £263,000. The ICCR's proposal would introduce a top
rate of 50% on estates worth more than £763,000. "A fairer inheritance tax would see the very wealthy, who are comfortably over the threshold, pay more, whilst the vast majority of families
that are currently taxed would pay less," noted IPPR researcher, Dominic Maxwell.
Wednesday, August 25, 2004 ~ 7:04 a.m., Dan Mitchell Wrote: Imagine a system that could instantly respond to a calamity like Hurricane Charley by mobilizing suppliers to speed urgently needed
resources to the victims. Imagine that such a system could quickly attract the out-of-town manpower needed for cleanup and repairs, while seeing to it that existing supplies were neither recklessly
squandered nor hoarded. Imagine that it could prompt thousands of men and women to act in the public interest, yet not force anyone to do
anything against his will. Actually, there's no need to imagine. The system already exists. Economists refer to it as the law of supply and
demand. Unfortunately, too many journalists and politicians call it by a more pejorative and destructive name: "price-gouging." Even before
Charley made landfall last weekend, Florida officials had launched a campaign against "those who would seek to profit from the misery of
others." Residents were urged to be on guard against any unscrupulous rise in prices, and to call a hotline with information about suspected
profiteers. ...It isn't gouging to charge what the market will bear. It isn't greedy or brazen. It's how goods and services get allocated in a
free society in response to actual conditions -- without the chronic shortages and corruption that are the usual result of price controls and rationing. And never is the flexibility of an unhampered market more
essential than in the aftermath of a catastrophe. ...When customers in Florida are willing to pay $10 for ice that usually goes for $2, or $400 to rent a generator that usually fetches $250, producers everywhere
have a powerful incentive to ship truckloads of ice and generators to Florida. The higher price is justified not only by the higher demand, but
by the higher costs associated with doing business in a disaster area.
Tuesday, August 24, 2004 ~ 3:25 p.m., Dan Mitchell Wrote: As the price of a barrel of oil approached $50 in New York last week, the European Commission warned member states against making
unilateral cuts in fuel taxes and duties to ease the impact of soaring energy costs on consumers and businesses. "Trying to offset these price
rises by excise reductions can cause problems as seen by Ecofin because it doesn't address the source of the problem," Commission spokesman
Gilles Gantelet told a daily briefing on Friday. There are also legal implications involved in cutting petrol taxes, Gantelet explained. As any
changes in tax that affect road haulage may affect competition within the EU, they must first be referred to the European Commission.
Tuesday, August 24, 2004 ~ 1:57 p.m., Andrew Quinlan Wrote: Contrary to the intention of Congress, Title IX is used to impose gender quotas on high schools and colleges. They must equate the ratio of
males and females in sports programs to their overall enrollment. ...This has forced, for example, Howard University to eliminate men's teams
such as baseball in order to reduce the overall total of male relative to female athletes. Meanwhile, women's sports that use large squad sizes, such as rowing and horseback riding, are sprouting up at many
colleges. ...Despite the claim that Title IX helps women athletes, it has actually caused the elimination of traditional girls' teams such as gymnastics in favor of easy-to-recruit sports such as water polo or
horseback riding. Title IX caused the reduction of women's gymnastics teams from 190 to only 90...
Tuesday, August 24, 2004 ~ 10:12 a.m., Dan Mitchell Wrote: A mere land owner does not present as attractive a cause for civil libertarians these days as some al Qaeda operative getting his three
squares a day down in Gitmo. But when an American citizen faces prison time for moving dirt on his own property, we say it's time to
break out the editorial torches and pitchforks... Mr. Rapanos's "crime" is to have moved sand on his own property without a federal permit.
...the reason Mr. Rapanos finds himself in this preposterous position is that our wetlands law is a hopeless swamp. The blame extends all around, from the politicians responsible for the Clean Water Act, and
the federal bureaucrats who have used it to define almost any puddle as a wetland, to a Supreme Court apparently happy to leave everyone in the murk. ...The words of the 1972 Clean Water Act give the federal
government authority over the "navigable waters of the United States." What's at issue, notes the Pacific Legal Foundation, which is defending
Mr. Rapanos, is whether this control extends to farmland more than 10 miles away from the nearest such body of water... Over the past 20 years or so, we've written about other American citizens who've gone to
jail for running afoul of wetland regulators. These include John Pozsgai of Pennsylvania, whose crime spree consisted of improving a lot he bought that was filled with 7,000 old tires. Bill Ellen was another
hardened wetlands criminal, a maritime engineer who actually ran afoul of the wetlands federalistas while trying to create a wildlife sanctuary in Maryland.
Tuesday, August 24, 2004 ~ 9:30 a.m., Dan Mitchell Wrote: ...it is difficult to ignore the role of EU accession in facilitating difficult structural changes in the new member states. Would the electorates
have accepted deregulation and privatization had the governments not been able to say that they are a requirement for EU membership? Would the Slovaks really have rejected Vladimir Meciar without the
realization that electing him would have had devastating consequences for Slovakia's international aspirations? But perhaps most importantly, could we have accomplished the level of free movement of goods,
services, capital and people, accompanied by internal market and competition policies to spur growth and job creation in Europe without the EU?
Tuesday, August 24, 2004 ~ 8:42 a.m., Dan Mitchell Wrote: The Dutch finance ministry on Thursday announced plans to cut the country's corporate tax rate to 30% over the next three years in an
attempt to remain competitive within the European Union. "This is a spectacular reduction, and if you look at our direct competitors - the
countries around us - then foreign investors should decide to come to the Netherlands, and Dutch businesses would also benefit from that," junior finance minister Joop Wijn told public broadcaster NOS.
Tuesday, August 24, 2004 ~ 8:00 a.m., Andrew Quinlan Wrote: In FY 2002-03 total taxes were 6.07 percent of income, up from 5.76 percent in 1990-01. Similarly, sales tax revenue as a percentage of
income rose from 3.09 percent to 3.24 percent over that same time period, and total sales tax revenues more than doubled, from slightly over $8 billion in 1990-91 to more than $16 billion in 2001-02. The
facts show that Florida's sales tax collections and total tax collections have grown faster than the state's income over the past decade. ...Although Florida's state government suffered through some tight
budgets during the last recession, Florida fared better than most states, for several reasons. One is that Florida exercised more fiscal restraint
than some other states. Another is that because Florida does not have a personal income tax, Florida's tax revenues are more stable than states
that rely on income taxation. ...States with high taxes tend to have more severe fiscal problems than states with low taxes. In 2002, the 10 states
with the highest taxes as a percentage of income had fiscal shortfalls that averaged $1.7 billion, whereas the ten states with the lowest taxes
had fiscal shortfalls averaging $455 million, less than a third of the high-tax states.
Tuesday, August 24, 2004 ~ 6:23 a.m., Dan Mitchell Wrote: The European Commission anticipates launching in 2007 its first substantive test of home state taxation (HST) ...The European
Commission paper also addresses an issue that has been debated since the pilot came under intense discussion in 2003--how to determine what is the "home state." The commission said the home state of a
participating SME group would be defined as the country of tax residence of the parent company or headquarters. The tax base would be established on the basis of the home state's rules and apportioned
among EU member states on the basis of a simple formula, such as payroll, the commission said. Third-country income of group members would fall outside the scope of the pilot and would be added to the
income of the group member after apportionment. ...In urging the ministers to support the pilot, the commission paper said, "The Commission considers that the Home State Taxation approach in all
likelihood provides a realistic and effective means to address the specific tax compliance problems of SMEs in the Internal Market." However, the commission cautioned that HST "does not provide a
systematic long term 'tax solution' for the Internal Market--like the common consolidated tax base does--but its potential benefits for SMEs and consequently the broader EU economy should not be left
unexploited." The commission reiterated the need for a consolidated tax base in Europe, saying "without such a tax base [European] rivals from the USA and also Japan will retain a distinct competitive
advantage." Despite strong support from the European business community, the commission said many EU member states remain cautious about the concept, while other are "hostile."
Monday, August 23, 2004 ~ 9:41 p.m., Dan Mitchell Wrote: The Japanese government's Tax Commission is planning to send a fact-finding delegation to Europe later this month to gather information
on the tax and social security systems of certain nations. According to reports in the national media, the Finance Ministry revealed last Thursday that panel members will be despatched to Sweden, Norway,
Denmark and France from August 29, and will report back to the Commission in September when discussions over Japan's 2005 fiscal reforms are due to commence. It is interesting to note that all of the
above countries feature VAT rates above 20% and are characterised as high-tax welfare states.
Monday, August 23, 2004 ~ 5:22 p.m., Dan Mitchell Wrote: Following the shelving of plans for a national tax amnesty, French Budget Minister Dominique Bussereau suggested in media reports on
Monday that France may instead push for an EU-wide tax amnesty. ...French business groups believe that capital flight from the country will not be reversed until the ISF (Impôt Sur la Fortune) wealth tax is
reformed or abolished. Introduced in the 1980s, the ISF is an annual levy on declared capital of more than €720,000, and is applied on a
progressive scale from 0.5% to 1.2%. The tax is thought responsible for the flight of around €11 billion from France in the last five years, according to a parliamentary report.
Monday, August 23, 2004 ~ 11:05 a.m., Dan Mitchell Wrote: Incoming European Commission President José Manuel Durão Barroso has set himself up for his first power struggle with net paying member
states by promising to stick with plans to substantially raise the EU budget for the next financial period. ...This large increase flew in the
face of protests by six net contributors to the EU's coffers - the UK, France, Germany, Austria, Sweden and the Netherlands. ..."Europe
cannot have ambitious policies with insufficient money", [Barroso] added.
Sunday, August 22, 2004 ~ 1:27 p.m., Dan Mitchell Wrote: Democratic activists say John Kerry is missing in action on an issue that could win him votes in November: voting rights for felons. ...leading
Democrats have approached the question of felons' voting rights gingerly. Their dilemma: While talking up the issue would reap votes and goodwill in some African-American communities, which are
disproportionately affected by voting restrictions, it also could prompt Republican attacks. ...Research by University of Minnesota sociologist
Christopher Uggen suggests that convicted felons could provide a boost to the Democratic ticket. While turnout among former prisoners tends to run at just 25% to 30%, more than 70% prefer Democrats.
Sunday, August 22, 2004 ~ 11:55 a.m., Dan Mitchell Wrote: Republicans who have tried to make inroads into the solidly Democratic black vote have too often tried to do it by offering what the Democrats
are offering. But those blacks who want what the Democrats are offering are going to vote for Democrats, not Republicans acting like make-believe Democrats. ...On today's issues -- especially education,
jobs, and crime -- the Republicans have more to offer blacks as well as whites. Democrats are too much in hock to the teachers' unions to allow the fundamental changes needed to give black children a decent
education, which is increasingly the ticket to a decent life. Democrats are too much in hock to other special interests like the environmental
extremists and trial lawyers, whose activities have the net effect of destroying jobs for everyone. On crime -- a major concern in black communities -- Democrats appoint the kinds of liberal judges who are
quick to turn criminals loose and slow to impose the kind of serious punishment needed to take them off the streets and deter others. Democrats have inertia and racial demagoguery on their side.
Republicans need someone like Alan Keyes who can talk sense.
Saturday, August 21, 2004 ~ 3:45 p.m., Dan Mitchell Wrote: The AFT's conclusion: "Charter schools are underperforming." Data from the National Assessment of Educational Progress (NAEP), often
called the nation's report card, show students in charter schools doing less well than the nationwide public-school average, which includes middle class students from well-heeled suburbs. Similar results are
obtained within selected states. Big deal. These results could easily indicate nothing other than the simple fact that charter schools are
typically asked to serve problematic students in low-performing districts with many poor, minority children. ...The AFT study only looks at student performance at a single moment in time. One needs to track
student progress within a school over multiple years in order to ascertain how much the child is learning. Moreover, nothing in these data accounts for the length of time that a charter school has been in
place--a factor known to have an impact on a school's performance. First-year schools usually have difficulties. Having just hired new staff and teachers, implemented new curricula, and acquired a building
facility to use, new schools often face considerable start-up problems. Almost one-third of the charter schools nationwide were less than two years old when the NAEP was administered, raising doubts about
whether even a sophisticated analysis of NAEP data would be relevant once charter schools have had time to become well established.
Saturday, August 21, 2004 ~ 2:15 p.m., Dan Mitchell Wrote: When Northern Europeans cross borders the reason is often to buy alcohol. A whole industry of cross-border shopping has developed in
these northern countries because the price of alcohol differs widely from country to country. ...with the European Union's internal market,
Nordic alcohol lovers have found a way to avoid heavy taxes. Happy to cross borders in pursuit of a tipple, alcohol consumption generally is on
the rise. The Finns rush to Estonia; Swedes and Norwegians cross the border to Denmark, Germany or Poland while the Danes travel to Germany - all in pursuit of cheap alcohol. ...The European Commission
presented a report in May on the operation of the EU-wide system of minimum rates of excise duty on alcohol and alcoholic beverages ...But common taxes can only be decided by unanimity among the 25 EU
member states - something very unlikely to happen. ...The Swedish government is also on alert over the growing number of citizens shopping for alcohol outside the state controlled liquor stores. A special
committee of in Swedish Parliament on Monday (16 August) published a report suggesting that alcohol taxes should be reduced by 40 per cent in
Sweden by 1 January 2005. "The lowering of the taxes has in practice already taken place for the large part of the Swedish people shopping abroad. The problem is known and we need to act. If we don't move –
this will run out of our hands," Swedish Prime Minister Goeran Persson was quoted saying by Dagens Nyheter.
Friday, August 20, 2004 ~ 12:20 p.m., Dan Mitchell Wrote: Between 1998 and 2001, Germany had a great run for the Nobel Prizes, producing four laureates in physics and medicine. But far from
recognizing Germany's excellence in advanced research, the awards more properly documented how unattractive their home country had become for Germany's brightest: All four scientists lived and worked in
the U.S. This brain drain to opportunities across the Atlantic is not only a German phenomenon. America is also destination number one for many of the best scientists from the rest of the European Union.
According to a European Commission survey, more than 70% of the EU-born recipients of U.S. doctorates between 1991 and 2000 planned to stay in America. Altogether some 100,000 European-born
researchers currently work in the U.S. ...Government funding in much of Europe keeps most universities at the same mediocre level while creating stifling bureaucracies and burdensome restrictions. In contrast
to that, American universities have more freedom and, thanks to their close cooperation with industry, are also more successful in turning scientific discoveries into economically viable projects. Cultural
differences also matter. Americans are generally quicker in embracing new technologies whereas in Europe scientific advancement is often greeted with skepticism -- witness the controversy surrounding
genetically modified organisms in Europe which has put the continent years behind in this field of agricultural research. Add the lower European salaries and higher taxes and you have some strong
incentives for researchers to leave Europe.
Thursday, August 19, 2004 ~ 10:52 a.m., Dan Mitchell Wrote: Congress needs to ask itself, if a start-up business venture can easily incorporate abroad (e.g., in Australia, Bermuda, or the Netherlands)
and avoid the onerous U.S. tax rules for income earned outside the United States (while still being listed on a U.S. stock exchange), why impose these onerous rules on U.S. corporations? What's the point? You
only end up hitting U.S. corporations that are trapped as U.S. corporations, and you only extract more revenue from them until you have killed the proverbial goose, i.e., until they go out of business or are
acquired by foreign corporations. Why does Congress have no compunction about imposing onerous tax rules on U.S. corporations? Why discriminate against U.S. corporations? Why not treat U.S. and
foreign corporations the same?
Thursday, August 19, 2004 ~ 8:14 a.m., Dan Mitchell Wrote: Money laundering through foreign shell banks and shell companies, automated teller machines, and fraudulent consumer loans are key
areas of concern in the Financial Crimes Enforcement Network's latest review of trends in suspicious activity reports, released Aug. 16 (SAR Activity Review). FinCEN, the Treasury Department's anti-money
laundering unit, said information filed along with suspicious activity reports identified specific Eastern European countries as homes for shell firms, including Armenia, Belarus, Bulgaria, Croatia, Cyprus,
Czech Republic, Estonia, Georgia, Greece, Kazakhstan, Latvia, Lithuania, Moldova, Poland, Romania, Russia, Slovenia, Turkey, Turkmenistan, Ukraine, Uzbekistan, and Yugoslavia. ...Money
launderers--who nowadays are also seen as potential terror financiers--use a wide variety of ways to move money outside the law, the FinCEN review found. One method is food stamp fraud using
electronic benefit transfer cards. Some food stamp recipients sell their cards for cash, which makes its way to the retailers' bank accounts via an automated clearing house transaction. The Department of
Agriculture's Food and Nutrition Service estimates that some $395 million of food benefits are diverted each year from their intended purpose through food stamp "trafficking and associated money
laundering activities."
Wednesday, August 18, 2004 ~ 5:33 p.m., Dan Mitchell Wrote: Nowhere in our Constitution is there even a hint of authority for most of what Congress taxes and spends for today. Don't be tricked by those
who'd argue that Congress has such authority under the Constitution's "general welfare" clause. James Madison explained, "With respect to
the two words 'general welfare', I have always regarded them as qualified by the detail of powers connected with them …" Thomas Jefferson said, "Congress has not unlimited powers to provide for the
general welfare, but only those specifically enumerated." The "detail of powers" or those "specifically enumerated" refer to what's actually laid
out in the Constitution. The Framers had the foresight to see that these powers might need modification. That's why they gave us Article V as a
means to amend the Constitution. One reader criticized, "The essence of democracy is that the will of the majority conveys legitimacy to actions
of the state." That's a sad commentary on both understanding and education. The Founders didn't intend for us to be a democracy but instead a republic. But more importantly, majority rule often confers an
aura of legitimacy to acts that would otherwise be deemed tyranny. ...there's nothing sacrosanct about majority rule; it can be just another form of tyranny. ... When the democratic process reigns in matters of
constitutionally enumerated federal government matters, we have the liberty that the Framers envisioned -- anywhere else it most likely means tyranny.
Wednesday, August 18, 2004 ~ 12:37 a.m., Dan Mitchell Wrote: August 20th marks the 40th anniversary of one of the major turning points in American social history. That was the date on which President
Lyndon Johnson signed legislation creating his "War on Poverty" program in 1964. ...The War on Poverty represented the crowning triumph of the liberal vision of society -- and of government programs
as the solution to social problems. The disastrous consequences that followed have made the word "liberal" so much of a political liability
that today even candidates with long left-wing track records have evaded or denied that designation. ...The black family, which had survived centuries of slavery and discrimination, began rapidly
disintegrating in the liberal welfare state that subsidized unwed pregnancy and changed welfare from an emergency rescue to a way of life. Government social programs such as the War on Poverty were
considered a way to reduce urban riots. Such programs increased sharply during the 1960s. So did urban riots. Later, during the Reagan administration, which was denounced for not promoting social
programs, there were far fewer urban riots.
Wednesday, August 18, 2004 ~ 11:16 a.m., Dan Mitchell Wrote: Reforming Social Security finances is the major domestic challenge that the president will face in the next four years. Without reform, the aging
of the population will eventually mean a major cut in benefits or a large tax increase. When today's 40-year-olds are retired, benefits would have
to be cut by one third or the payroll tax rate increased from today's 12.4% to more than 18%. And that wouldn't begin to deal with the rising cost of Medicare. ...Although John Kerry has not laid out a plan
to reform Social Security or to solve its fiscal problems, he has given some indication of how he might cut Social Security benefits. In a speech in Ohio and on the Kerry-Edwards Web site, Mr. Kerry has said
that he would consider "making sure that high-income beneficiaries don't get more out than they pay in" as taxes during their working
years. In practice, the Kerry plan would mean cutting Social Security benefits by about 80% for those whose benefits are reduced.
Wednesday, August 18, 2004 ~ 9:45 a.m., Dan Mitchell Wrote: Republicans enacted a program covering even those who already had drug coverage from insurance or employers. This was done, as Peterson puts it,
"for the express political purpose of maximizing the number of seniors who take advantage of it." Republicans thought they had outfoxed the Democrats
for once, but instead they outfoxed themselves. According to new poll from the Kaiser Family Foundation, 47 percent of the elderly have an unfavorable
impression of the new drug benefit, with only 26 percent having a positive one. Of those who say that the legislation will affect their votes in November,
John Kerry is supported by better than a 2 to 1 margin. In terms of votes for Congress, Democrats are supported over Republicans by almost a 3 to 1
margin. So in return for selling their souls, Republicans have gotten less than nothing in return. If every Republican who voted for this monstrosity is
defeated for reelection, they will only be getting what they deserve.
Tuesday, August 17, 2004 ~ 8:45 p.m., Dan Mitchell Wrote: A leading member of Germany's ruling Social Democrats has urged the government to cancel next year's planned reduction in the top rate of
income tax and instead invest in education and social welfare. "I demand we do without the planned reduction in the top tax rate," Siegmar Gabriel, a member of the SPD's national leadership committee
and former prime minister of Lower Saxony, told the Bild am Sonntag newspaper. In a later interview with a German broadcaster, Gabriel remarked that cutting the top rate was "frankly obscene," ...Under the
final stage of the income tax cuts designed to kickstart the economy, the top rate of income tax will in January be reduced to 42% from 45% whilst the lower rate will also fall, to 15% from 16%.
Tuesday, August 17, 2004 ~ 5:32 p.m., Andrew Quinlan Wrote: Falls Church Police Chief Robert T. Murray imposes a quota on his officers: They must write an average of three tickets or make three
arrests per 12-hour shift. The most obvious way to fulfill the requirement is to focus on trivial infractions. ...Why, with vicious thugs on the loose, do police waste time on trivial pursuits and ineffective
tactics? ...citizens who dislike seeing their taxes wasted have no one but themselves to blame. We have created a climate that hinders -- even hamstrings -- effective policing. ...The average cop on the beat in
Virginia almost certainly is aware of these patterns [of minorities committing serious crimes], but an officer who targets the likely
suspects risks being excoriated for "profiling." Is it any wonder cops turn to menial matters when they are criticized for intelligent policing?
Citizens also bear the blame for tolerating tactics that use law enforcement to produce revenue. For example, sobriety checkpoints not only yield negligible results, they may even be counterproductive. How
many more tragedies could be prevented by patrolling for impaired drivers? Nonetheless, Virginia police set up roadblocks weekly because that allows them to collect millions of dollars in grant money from the
federal government -- and profits from a windfall of tickets. ...surely, most Virginians would prefer being protected to being harassed. But effective law enforcement needs a political climate in which facts can
prevail over political correctness -- and where local officials are willing to eschew the revenue produced by predatory policing.
Tuesday, August 17, 2004 ~ 12:12 p.m., Dan Mitchell Wrote: The key "breakthrough" is a pledge by the United States and other nations to reduce trade-distorting farm subsidies by roughly 20 percent.
Admittedly, this is better than a 20 percent increase in farm subsidies. However, given the wiles of ag policy, it is unlikely the cuts will ever
materialize in the bottom line of the federal budget. And even if there is a 20 percent subsidy cut, it will be from the sky high current levels. In
the 2002 farm bill, President Bush and Congress boosted farm subsidies as much as 70 percent above the previous law. ...Since 1990, the cotton program has cost taxpayers more than $20 billion — the equivalent of
$6 million for each full-time cotton farmer. The 2002 farm bill authorized jacking up cotton subsidies by roughly 16 percent. U.S. cotton dumping helped drive world cotton prices down 50 percent
between 1996 and 2002. Amadou Toumani Toure and Blaise Compaore, the presidents of Mali and Burkina Faso, respectively, complained in July 2003 that "the payments to about 2,500 relatively well-off
[American cotton] farmers has the unintended but nevertheless real effect of impoverishing some 10 million rural poor people in West and Central Africa." The only sure way to reduce farm subsidies is to
abolish farm programs. Anything else is merely a ticking time bomb under American taxpayers. Until farm subsidies are abolished, farm-state congressmen will be lurking, waiting to add a legislative
rider (such as the $10 billion handout for tobacco farmers in the current tax bill) or seize upon the next drought (always a novel occurrence) to rain billions of dollars upon farmers.
Monday, August 16, 2004 ~ 11:18 a.m., Andrew Quinlan Wrote: To the defenders of the old order - Third World despots, legal monopolies, land trusts, gold funds, oil cartels, bureaucracies and
tyrannies of all kinds - the Promethean roar was an insufferable racket. They mustered all their powers to prevent the transformation from occuring. The facts reveal their failure - and Reagan's success: Since
1980, U.S. marginal tax rates fell some 40 percent on income and 75 percent on capital gains and dividends, and the American economy added close to 36 million jobs. During the same time period, Europe
and Japan created scarcely any net new employment outside of government. American companies now constitute 57 percent of global market capitalization, and the U.S. commands close to one half of the
world's economic assets. America, responsible for one fifth of global GDP in 1980, produced one third of global GDP in 2003. That is Ronald Reagan's legacy. ...The reason for tax cuts is not to allow the
rich to keep their money. It is to enable entrepreneurs to invest money by making their investments profitable. Through the investment process, entrepreneurs give money to others, in their own or other
businesses. By earning the money, they learned how to identify the people best able to increase its worth. They learned how to use the money in ways that respond to the needs of their customers. They
mastered the magic of lowering prices in order to increase revenues. And they reached out to the largest untapped markets of the world economy, which are always the domains of billions of currently poor
people struggling to gain wealth.
Sunday, August 15, 2004 ~ 1:05 p.m., Dan Mitchell Wrote: Using data from the Bureau of Economic Analysis and the National Conference of State Legislatures, the Tax Foundation measures as a
percentage of per capita income residents' income, property, sales and other personal taxes levied at the state and local levels. It also factors
in the portion of business taxes passed along to state residents through higher prices, lower wages or lower profits. ...The willingness to tap
several tax revenue sources is a distinguishing factor of those places that might be dubbed the least-tax-friendly of 2004 – namely, New York, the District of Columbia, Maine, Ohio, Hawaii, Rhode Island.
...On the flipside, the states that might be dubbed most tax friendly in 2004 – Alaska, New Hampshire, Delaware, Tennessee and Texas, all of whom have been in the top 5 for five years – are notable because they
generally only use one or two major tax tools to raise revenue, rather than all three. Alaska, New Hampshire, Tennessee and Texas, for instance, do not impose a personal income tax. Alaska and New
Hampshire also forgo a state sales tax, as does Delaware.
Sunday, August 15, 2004 ~ 11:52 a.m., Dan Mitchell Wrote: The statistics released this week show that highway fatalities were down in 2003 -- to 42,643 from 43,005 in 2002. But that doesn't tell you much
about safety until these numbers are placed alongside the amount of driving people are doing. The key statistic is fatalities per 100 million vehicle miles traveled. That number hasn't changed much in recent
years -- 1.48 in 2003, 1.51 in 2002 and 1.51 again in 2001. ...Sport utility vehicles have been NHTSA's favorite whipping boy in the past and it's hard to shake the habit. The agency comes down hard on SUVs
for their high "rollover" rate. But like last year, it fails to point out that while SUVs are more likely than regular cars to roll over during a fatal
wreck, they aren't likelier to be involved in a fatal wreck in the first place. For light trucks (the category that includes SUVs) the fatality
rate per 100 million vehicle miles traveled has been slightly lower than the rate for passenger cars in each of the past five years.
Saturday, August 14, 2004 ~ 2:00 p.m., Dan Mitchell Wrote: White House officials attempted to backtrack from comments made by President George W. Bush on the campaign trail this week relating to a
national sales tax. "The president has always believed in lower taxes and a simpler, fairer tax code. There's nothing more to announce at this
time," stated White House spokesman Scott McClellan. Administration officials have since confirmed that the President is not considering a
national sales tax as a policy initiative for a second term, according to reports.
Saturday, August 14, 2004 ~ 6:28 a.m., Dan Mitchell Wrote: Some countries bury their entrepreneurs in red tape. Others welcome job creators and foment economic growth. You can find out which is
which--which countries, that is, are best for business--by looking up data from the International Finance Corp., the World Bank's private-sector development arm. Last October the IFC published
"Doing Business in 2004: Understanding Regulation." The survey sized up 130 countries on how hospitable they are to business in five respects:
getting credit, starting a business, enforcing contracts, hiring and firing workers, and closing down a business. Key finding: "Heavier regulation
brings bad outcomes." ...One winner: Denmark. It takes just 14 steps to have a contract enforced in Denmark, versus 26 in Germany. And, somewhat surprisingly, it turns out the Danes have some of the most
flexible labor laws in the world.
Friday, August 13, 2004 ~ 12:10 p.m., Andrew Quinlan Wrote: Even people who disagree about tax cuts usually agree that our tax system is a mess. It should be repealed and replaced with a system that
treats all taxpayers fairly and equally. ...Two great ideas for achieving this goal are on the table - the flat tax and the national sales tax. They
may seem different, but the flat tax and the sales tax are different sides of the same coin: The flat tax takes a small slice of your income as it's
earned; the sales tax takes a small slice of your income as it's spent. ...this debate should include potential pitfalls. For instance, if we adopt a flat tax, how can we ensure that politicians don't create new
loopholes? And if we adopt a sales tax, how do we make sure the politicians don't pull a bait-and-switch, implementing a sales tax but then conveniently "forgetting" to repeal the income tax? Many
European nations have adopted a form of national sales tax, but none have eliminated their income-tax systems. As a result, national sales taxes have been used to finance a big expansion in the size of
government - which helps to explain why so many European nations are economically stagnant. ...Special-interest groups will fight to protect the
loopholes and shelters they have placed in the current system. But this doesn't mean the battle can't be won. Nobody thought President Reagan would be able to cut America's top tax rate from 70 percent to 28
percent. Nobody predicted 15 years ago that the Soviet Union would disappear and be replaced by a more democratic Russia with a 13 percent flat tax.
Friday, August 13, 2004 ~ 11:29 a.m., Dan Mitchell Wrote: You wanted campaign finance reform. You got campaign finance reform. McCain-Feingold promised to take the money out of politics. If
you believed that, you deserve what you got. And what you got is an avalanche of money into politics this... All that McCain-Feingold did was make it impossible to give huge personal contributions to political
parties. But if you have far more money than you can ever hope to spend, ... [p]lay an even more important role in politics by bankrolling your very own ``527,'' a tax-code loophole that enables the fat cats to
fund their own political advertising so long as they do not ``coordinate'' with the candidate. The ads have another restriction. They cannot
advocate voting for anyone. I love that part, for two reasons. First, it produces comical scripts that say ``President Bush, friend of Halliburton, likes taking food from the mouths of orphans. If you think
that this is not nice, write President Bush and tell him so.'' Of course, the ad buyers mean: ``Vote Kerry.'' But they cannot say so. Second, I
like the poetic justice. The goo-goo do-gooders who endorsed campaign finance reform have another great cause: the awfulness of negative campaigning. Well, they have produced a system now that is practically
designed to produce negative ads.
Friday, August 13, 2004 ~ 10:48 a.m., Dan Mitchell Wrote: The new European Commission is set to have a distinctly liberal [in the pro-market European sense of the word] angle as the three of the top
economic posts have gone to people who favour market liberalisation. Competition, which is arguably the biggest portfolio in the European Commission, will be handled by the Dutch Neelie Kroes who comes
from the free market liberal party, VVD, in the Netherlands. Meanwhile, the Briton Peter Mandelson will take on the trade portfolio. A close ally of UK prime minister Tony Blair, Mr Mandelson is also a strong
proponent of free trade and is a former trade minister. Responsible for the internal market and financial services is the Irishman Charlie McCreevy. He has been finance minister in Ireland for seven years and
is known as a free marketer. Another interesting appointment is of Ingrida Udre to look after taxation - she comes from Latvia, a country with very low corporate tax rates. These appointments are likely to
make it harder for France and Germany to push their traditionally more protectionist agenda. ...as Mr. Barroso read the names of the Commissioners he had chosen for the key portfolios, it became clear that the center of gravity has
shifted: the Franco-German axis might still exist but it is no longer calling the shots. Almost none of the duo's central demands had been met while all important economic positions went to avowed
free-marketers. ...Trade went to Britain's Peter Mandelson and the important internal market position went to Ireland's former Finance Minister Charlie McCreevy. What better man to tear down the last
obstacles to free trade and the free movement of capital and people in Europe than the man whose supply-side policies helped steer Ireland toward 8% growth rates? Taxation was split off from internal markets
portfolio and given to Latvia's Ingrida Udre. Mr. Barroso could have hardly sent a clearer message to France and Berlin that they are wasting everybody's time with their calls for a European minimum tax
to stop tax competition from the East. Latvia adopted a 25% flat tax almost ten years ago and experienced economic growth rates averaging over 6% during the last five years.
Friday, August 13, 2004 ~ 10:28 a.m., Dan Mitchell Wrote: Later this month, throngs of Republicans will descend upon New York City to celebrate .... well, Republicans. The scene will be similar to last
month, when thousands of Democrats came to Boston to celebrate Democrats. After four years of spending taxpayer dollars at rates unseen in U.S. history, after failing to carry out the single most
important responsibility of government - to protect American citizens from those who want to harm us - America's two major political organizations now get to throw themselves grand galas, where party
leaders bloviate on national television about the earnest, hard-working taxpayer, then party in corporate suites where they nosh on the likes of
"maple bourbon glazed turkey and roasted duck, and Forest Glen chardonnay." And you and I pay for it. U.S. taxpayers give the Democrats and Republicans $15 million each to host their respective
conventions. Taxpayers in host cities and host states pay even more.
Friday, August 13, 2004 ~ 8:09 a.m., Dan Mitchell Wrote: John Walters, the head of the Office of National Drug Control Policy, recently startled the media by admitting that the $3.3 billion Plan
Colombia, now in its fourth year, has failed to make a significant dent in the amount of cocaine flowing out of that country. Walters added hastily, however, that he expected to see substantial progress in the
next year or so. His comments are the latest in a familiar and dreary pattern. Each new initiative in Washington's international campaign to
stem the supply of illegal drugs is launched with great fanfare. During the early phases, isolated examples of success are touted as evidence
that the overall strategy is working. Ultimately, though, reality intrudes, and it becomes clear that the drug supply is as plentiful as ever. Thrown
on the defensive, drug warriors admit that the task has proven more difficult than anticipated, but argue that, if we stay the course, success is just around the corner. When such predictions prove faulty often
enough, the existing initiative is quietly buried and a new one is launched with the appropriate fanfare. ...Plan Colombia has not succeeded any better than earlier anti-drug initiatives. And contrary to
the drug czar's tenacious optimism, that pattern is not likely to improve in the next year - or the next ten years. One wonders how many times U.S. officials have to travel down the road of failed prohibitionism
before they realize that it always leads to a dead end. Given the huge profit margin that exists because drugs are illegal, supply-side campaigns are doomed to fail. It is time that Walters and other
policymakers recognize that reality.
Friday, August 13, 2004 ~ 7:05 a.m., Dan Mitchell Wrote: Alaska is much larger than France and Germany -- combined. Yet its population is less than one-tenth that of New York City. Keep that in
mind the next time you hear some environmentalist hysteria about the danger of "spoiling" Alaska by drilling for oil in an area smaller than Dulles Airport.
Friday, August 13, 2004 ~ 6:30 a.m., Dan Mitchell Wrote: European Union finance ministers will consider in September a plan to establish a group of like-minded countries willing to agree on an
optional consolidated tax base for EU-based companies with business activities in more than one member state. The European Commission said it is urgent to adopt such an approach if the EU is to meet its goal
of overcoming the United States when it comes to economic competitiveness by 2010. ...Considering the significant conflicts that would have to be overcome in order to draw up a mandatory
consolidated tax base accounting system, the commission said that an optional approach was preferable. "An optional system leaving companies the choice between the existing national base and the
common EU tax base presents a number of practical advantages," the commission said. Such a voluntary approach "would avoid a potentially
risky 'big bang' changeover leaving more control with member states and it matches the rationale of the common tax base concept that is only a concern for companies active cross- border." ...Despite
continued pressure from France and Germany for a common corporate tax rate in the EU as way to stop companies moving to new EU member states where rates are significantly lower, the commission
insisted that a consolidated tax base scheme would not require uniform rates. "Tax competition may strengthen fiscal discipline to the extent
that it encourages member states to streamline their public expenditure, thus allowing a durable reduction in the overall tax burden," the commission said.
Thursday, August 12, 2004 ~ 10:40 a.m., Dan Mitchell Wrote: China's financial and securities watchdogs have launched a crackdown on the illegal flight of capital via Caribbean financial centers such as
the British Virgin Islands and the Cayman Islands, state press reported Monday. ...Investment flowing from the Virgin Islands totaled 9.4 billion
dollars in 1999, and during the first quarter of this year has hit 1.75 billion dollars, one of China's biggest overseas investors. Although offshore financing centers have helped bring massive funds into China,
they also have a significantly negative impact on the economy by allowing corrupt businesses and government officials to channel out illegal money, the ministry report said. ...China's dual tax system to
encourage foreign firms to set up operations on the mainland is partly to blame. Foreign-funded companies enjoy a range of preferential tax policies including an average 17 percent corporate tax rate compared
with around 33 percent for domestic companies. Seeking the same tax advantages or to more easily win an overseas listing many Chinese companies try to register their companies in offshore financing centers,
the ministry added.
Thursday, August 12, 2004 ~ 9:19 a.m., Dan Mitchell Wrote: Americans are compelled to work as long as they do in part because of the pervasive insecurity of American life. In the absence of the generous
pensions, government-subsidized college education, universal health care and other benefits that Europeans take for granted, Americans see long hours of work as the only way to obtain needed benefits and
generate savings for college and retirement. The real threat of job loss, even for professional employees, forces workers to maximize their earnings in the present. In the absence of strong labor organizations
and laws that protect workers, employees are in no position to protest long hours. ...The lesson to be learned from comparing work cultures is not that Europeans should become more like Americans, nor that
Americans inhabit a different, more materialistic culture. It is that Europeans have gained politically and socially what many Americans say they want individually but have been unable to achieve politically.
Americans, too, would like to have employment security, more flexibility, more leisure, fewer worries about health care and pensions, but the United States still has a long way to go.
Wednesday, August 11, 2004 ~ 7:48 p.m., Dan Mitchell Wrote: [The Conservative Party official's] chief fear would be a switch to the American style tax system for non-resident nationals whereby expats
will effectively pay the same amount of tax as if they were living in the United Kingdom. Under current rules, Britons are taxed on income earned wholly abroad according to the tax rules of the jurisdiction in
which they reside. The US government however, compels its citizens working abroad make up the difference between local tax and US tax if
the former taxes are lower. "It is clear from the Treasury's lack of a denial that it is looking at new ways to milk British taxpayers whether
they live in the United Kingdom or not," Dr Fox accused the government.
Wednesday, August 11, 2004 ~ 6:14 p.m., Andrew Quinlan Wrote: Senator Kerry himself has said that he was for spending more money on education with "no questions asked." The teachers' unions no doubt
loved hearing that, but blank checks are precisely how our schools have produced the most expensive incompetence in the world. Then there was another glimmer of reality breaking through recently, courtesy of
wife Teresa Heinz Kerry. While her husband was addressing some midwestern farmers, Teresa passed a note to him, which led him to ask her to address the group. Her message? Organic hog farming is
"economical" and there is "a huge market" for it. A hog farmer in the audience was immediately on his feet, objecting. That this sheltered rich
woman from Boston would have the nerve to try to tell hog farmers how to raise hogs is a classic example of the liberal vision.
Wednesday, August 11, 2004 ~ 3:07 p.m., Dan Mitchell Wrote: United Airlines's recent announcement that it will skip payments to its four pension funds while it is in Chapter 11 has some observers
murmuring about a government bailout. And not just any old bailout, but something akin to the hundreds of billions spent on the savings-and-loan debacle in the late 1980s. ...Just as the thrifts were
insured by a government agency, so are pension plans. When a company terminates its plan, it gives the plan's assets and liabilities to the Pension Benefit Guaranty Corporation. The PBGC assumes
responsibility for pension payments, making up the difference (within certain limits) of any underfunding in the plan. In 2002, Bethlehem Steel
off-loaded $3.6 billion in unfunded pensions on the PBGC in the biggest hit to the agency so far. A United Airlines dump would be almost double
that. If that's not bad enough, the PBGC itself had a deficit of more than $11 billion last year. Since the government stands behind the PBGC to make up the difference, if United caused a domino effect in
the rest of the industry, the result could be tens of billions of dollars in a bailout underwritten by taxpayers. None of this should be unexpected.
Government insurance creates an unintended moral hazard. That is, companies can promise retirement benefits knowing that the federal government will bail them out if necessary. Companies can also use the
insurance to help them restructure bad business practices; dumping pension plans on the government becomes a type of strategy to refinance. Trouble in the PBGC is no surprise either. Last spring, the
PBGC's growing deficit prompted the White House to offer a wide-ranging piece of reform legislation to tighten up funding requirements for company pensions. What emerged from Congress
however was a big, fat bailout for underfunded plans, especially in the airline and steel industries. Instead of putting pensions on a sounder
basis, the final bill liberalized funding accounting and relieved the airlines and steel from making accelerated contributions to reduce their funding gaps for two years. Mr. Bush signed the Pension Funding
Equity Act on April 10, which not only postponed the day of reckoning but allowed the shortfalls to grow even larger in the interim.
Wednesday, August 11, 2004 ~ 11:00 a.m., Dan Mitchell Wrote: How many times have we heard "free tuition," "free health care," and free you-name-it? If a particular good or service is truly free, we can
have as much of it as we want without the sacrifice of other goods or services. Take a "free" library; is it really free? The answer is no. Had
the library not been built, that $50 million could have purchased something else. That something else sacrificed is the cost of the library.
While users of the library might pay a zero price, zero price and free are not one and the same. So when politicians talk about providing something free, ask them to identify the beneficent Santa Claus or tooth
fairy. It's popular to condemn greed, but it's greed that gets wonderful things done. When I say greed, I don't mean stealing, fraud, misrepresentation or other forms of dishonesty. I mean people trying to
get as much as they can for themselves. We don't give second thought to the many wonderful things others do for us. Detroit assembly-line workers get up at the crack of dawn to produce the car that you enjoy.
Farm workers toil in the blazing sun gathering grapes for our wine. Snowplow drivers brave blizzards just so we can have access to our roads. Do you think these people make these personal sacrifices because
they care about us? My bet is that they don't give a hoot. Instead, they along with their bosses do these wonderful things for us because they want more for themselves.
Wednesday, August 11, 2004 ~ 10:24 p.m., Dan Mitchell Wrote: ...a clear majority of Norwegians have declared their opposition towards membership of the European Union. A poll conducted by
Sentio-Norstat on behalf of three Norwegian newspapers (Dagen, Nationen and Klassekampen), showed that 45 percent of people in Norway are opposed to EU membership, while only 42.2 percent are in
favour. 12.7 percent did not take a stand. Commenting on the result, leader of the Norwegian No-movement, Sigbjrn Gjelsvik, said the EU question should now be shelved. ...The swing towards the no has been
attributed to the new EU Constitution. ...Norway voted No to joining the EU in referendums in 1972 and 1994.
Wednesday, August 11, 2004 ~ 9:31 a.m., Dan Mitchell Wrote: Politicians like Estonia's Prime Minister Juhan Parts, Slovakia's Prime Minister Mikulas Dzurinda, Hungary's once and future Prime Minister
Victor Orban and Poland's next Prime Minister Jan Rokita are at the forefront of a group of young politicians that will try to bring Eastern Europe's revolutionary free-market conservative beliefs to Brussels.
Together, they will be in prime position to push Europe's agenda in a different direction - less Sweden, more Texas. In the field of economic policy-making, Eastern Europe's accession to the EU's internal market
is already leading to previously unthinkable results. The threat of further outsourcing of manufacturing jobs to Eastern Europe has put the return to a 40-hour working week (or 36 hours in France) firmly on
the agenda in Western Europe. Equally firmly off the agenda are subjects like tax harmonization and further labor market regulation.
Wednesday, August 11, 2004 ~ 8:17 a.m., Dan Mitchell Wrote: When it comes to Social Security reform, John Kerry is clear about what he is against. "I will not privatize Social Security," he declared in his
acceptance speech at the Democratic National Convention. "I will not cut benefits." ...It is a clear, resounding message, one that says
absolutely nothing about what Sen. Kerry or the Democrats would do to solve Social Security's looming financial crisis. ...Overall, Social Security now faces unfounded liabilities in excess of $26 trillion. One
has to wonder where Kerry plans to get the money. Actually, it is all too clear where the money will come from. As former President Bill Clinton
pointed out, there are really only three options for Social Security reform: raise taxes, cut benefits, or invest privately. Since Sen. Kerry
rules out private investment or benefit cuts, he could legitimately be accused of implicitly endorsing tax increases. And mighty big tax increases they would be: a 50 percent increase in the payroll tax or the
equivalent. This would be a tax hike far higher than what Kerry would "save" by rolling back parts of President Bush's tax cuts - even if he
hadn't already promised to use those savings to fund other government spending. Not that financing is the only problem with Social Security. The program already provides today's workers with a low,
below-market return on their tax "contributions" to the program. The program unfairly penalizes African-Americans, working women, and others. Workers don't own their money. Nor do they have any
guaranteed right to their benefits. In short, it is a program crying out for reform. ...Sen. Kerry says that he has "reported for duty." But on
one of the most important domestic issues facing this country, he has been AWOL.
Tuesday, August 10, 2004 ~ 7:45 p.m., Dan Mitchell Wrote: Europeans produce no more per year than Americans did 20 years ago. And they are not catching up. According to the Bank for International
Settlements in Switzerland, the productivity gap between the United States and Europe is actually widening. In the Euro area as a whole, workers were 86 percent as productive as American workers in 1995. In
2003, this fell to 84 percent. As a consequence, living standards are much lower in Europe than most Americans imagine. This fact is highlighted in a new study by the Swedish think tank Timbro. For
example, it notes that the average poor family here has 25 percent more living space than the average European. Looking at all American households, we have about twice as much space: 1,875 square feet here
versus 976.5 square feet in Europe. On average, Europeans only live about as well as those in the poorest American state, Mississippi. ...Europeans seem to get sick a lot more than Americans. According to
a July 25 report in The New York Times, on an average day 25 percent of Norway's workers call in sick. A 2002 study in Sweden found that the average worker there took more than 30 sick days per year. Makes you
wonder just how good their health care systems really are. As a consequence, aggregate hours worked are much lower in Europe than in the United States. According to a new report from the Organization
for Economic Cooperation and Development in Paris, last year the average American worked 1,792 hours. By contrast, the average Frenchman worked just 1,453 hours and the average German worked
only 1,446 hours. Twenty-five years ago, annual hours worked in Europe were much closer to those here. ...neither the OECD nor the IMF has any real explanation for why Europeans take so much leisure
time. However, a new study by economist Edward Prescott of the Federal Reserve Bank of Minneapolis provides the answer. He says that Europe's higher taxes explain almost all the difference in labor force
participation rates between Europe and here. He notes that when European tax levels were comparable to those here, work hours were similar. But as Europe's taxes have risen, workers responded by
working less. Consequently, tax cuts in Europe would raise labor supplies, increase output and raise the standard of living. For example, if France reduced its tax burden from 60 percent of GDP to 40 percent,
the average Frenchman would be able to consume 19 percent more over his lifetime than he does now. This is a very large impact. In short, Europeans don't work because it just doesn't pay to work after the
government takes its cut. And because welfare benefits are so high, the cost of not working is low.
Tuesday, August 10, 2004 ~3:39 p.m., Andrew Quinlan Wrote: ...we still have a tax code that begins with an overly broad definition of taxable income. As a result, we have been forced to create a number of
deductions, credits, exemptions - what John Kerry would deride as loopholes - to try to ameliorate some of the perverse disincentives from such an ill-conceived cradle-to-grave, redistributionist,
social-engineering-focused tax system. The system is still impossibly complex, outrageously expensive, overly intrusive, economically destructive and manifestly unfair, and we should still scrap the code. On
the corporate tax front, America is falling farther and farther behind. In 1986, the United States cut the federal corporate tax rate from 46
percent to 34 percent. Since then, the rest of the world has caught up and surpassed the United States in corporate tax competitiveness. Today, the United States has the fourth highest corporate tax rate
among Organization of Economic Cooperation Development countries, roughly 10 percent more than the average OECD top corporate rate - further proof that the real problem facing American job creation is not
"Benedict Arnold CEOs," as John Kerry maintains, but a confiscatory, confusing and overly complex tax system.
Tuesday, August 10, 2004 ~ 2:16 p.m., Dan Mitchell Wrote: ...the unemployed in Germany receive up to 67% of their last salary for one year and after that almost indefinitely up to 57%. This open-ended
support has discouraged many from taking up jobs that often would have paid less than the jobless benefits. No wonder that of the 4.3 million unemployed, more than 1.7 million have been jobless for a year
or more. With a jobless rate of 10%, this kind of generosity is simply no longer affordable. As of January 2005, the jobless will still receive the
salary-linked payments during the first year but after that they will be practically on welfare: EUR345 a month for a single household. That's
indeed a severe cut even though this figure doesn't tell the whole story. Families receive of course more and in addition, the state will pay for
rent, health care and pension contributions. A couple with two children would, including housing allowance, get EUR1,559. Another novelty the
reform introduced is that the unemployed can now beef up their welfare checks by taking up low-paid jobs. As a matter of fact, the unemployed will now have to accept almost any job or risk losing their benefits
altogether. This is a radical break from the past. According to the traditional logic of the German social market economy, it is considered less dignified to work in a job below one's qualifications than not to
work at all.
Tuesday, August 10, 2004 ~ 12:10 p.m., Dan Mitchell Wrote: The liberal case for an extension of the assault weapons ban is undermined by one small but significant detail... The ban would
therefore affect nearly 50 percent of all gun owners since many of the guns in question are "mechanically indistinguishable" from traditional
hunting rifles... Tragically, the past decade is rife with instances when citizens needed more than just a simple handgun to defend themselves
because the government had failed in its fundamental mission to uphold law and order. The Los Angeles riots were just such a case. On April 29, 1992, the streets of downtown Los Angeles erupted in a riot as
African-Americans enraged by the verdict in the Rodney King case went on a rampage in Korea Town. The carnage left 55 people dead, 2300 injured, and one billion dollars in property damage. As one can imagine,
in such a situation "assault" weapons would come in handy. As Senator Orrin Hatch observed in a recent Senate speech, the "Korean-American merchants would agree that when one is facing mob violence and the
police are unable to respond, one may need a gun that shoots more than just six bullets or has a menacing appearance."
Tuesday, August 10, 2004 ~ 7:12 a.m., Dan Mitchell Wrote: ...if the Bush team loses this election because of economic concerns, they'll have few to blame besides themselves. ...In the ten quarters since
Bush's first budget took effect, the percent change from the preceding quarter of the federal-government portion of gross domestic product is an average of 7.6 percent. In the ten quarters preceding Bush, it
averaged 3.1 percent. ...much of it comes from the domestic side. Given that the private sector uses resources more efficiently than the public
sector, the increased spending has likely slowed the recovery. And Bush has gained little from these programs. He has not neutralized the Democrats on the education issue, and seniors are, so far, not too happy
with the prescription-drug program. Future Republican administrations should realize that they aren't going to "out-Democrat" the Democrats
with new government spending. All that spending will do is jeopardize economic growth. ...this administration has played politics with [free
trade]. While it has fought for and won the reauthorization of fast-track authority and passed new agreements with Chile and Singapore, it has
instituted steel tariffs and textile quotas to win races in Pennsylvania and the Carolinas. The steel tariffs in particular were both economically
and politically dumb. A Consuming Industries Trade Action Coalition Steel Task Force study from last year showed that the tariffs had resulted in over 200,000 lost jobs in the steel-using industry during
2002. Those 200,000 fewer jobs are undoubtedly helping keep Bush's numbers on the economy down at present.
Monday, August 9, 2004 ~ 3:19 p.m., Dan Mitchell Wrote: Before Congress passed the present [McCain-Feingold campaign finance] monstrosity, there was much discussion that an amendment to
the Constitution would be required to allow Congress such sweeping regulatory powers over political activity, given the First Amendment's express prohibition of the same. Rep. Dick Gephardt of Missouri
argued: "What we have is two important values in conflict: freedom of speech and our desire for healthy campaigns in a healthy democracy. You can't have both." Unable to muster the support to amend the
Constitution, Gephardt simply voted to ignore the First Amendment. So did a Republican-controlled Congress. All the major media outlets — The New York Times, The Washington Post, the television networks —
lobbied for and cheered the extra-constitutional move, relatively unaffected by the new law. ...It is apparent that some of those calling
for "fair elections" really seek government-controlled elections — which ultimately means incumbent-controlled elections. ...a desire for
"fairness" and "equality of speech" is impossible . . . unless we repeal not only freedom of speech but also freedom of the press and freedom
of association, and enforce economic equality down to the penny. (Perhaps, some of Pol Pot's former economic advisors would be available to assist in the restructuring.)
Monday, August 9, 2004 ~ 2:36 p.m., Dan Mitchell Wrote: Russia has it, as do Estonia and Slovakia and now even Iraq. We are talking about the flat tax, which has become increasingly popular over
the past decade, particularly in former Communist countries. Now the idea has reached Europe's largest economy. The influential advisory panel to Germany's Finance Ministry last week proposed a flat tax of
30% on both personal and company income. That's still a high rate by international comparisons (Russia's individual rate is 13%), but in Germany company profits are now taxed at around 37% and personal
rates range from 16% to 45%.The reaction of the Social Democratic-led government was predictably cool. Barbara Hendricks, junior finance minister, said a flat tax would compromise the principle of social justice
and might lead to a decline in tax revenues. "A sustainable fiscal policy isn't compatible with further net (tax) cuts," she said. This response
betrays the government's static view of the economy. Germany's high tax rates reduce the economic incentive for individuals and companies to produce wealth. Tax reform would both boost the economy and stem
the tide of capital flight to lower-tax Eastern Europe. A flat rate lower than the present maximum would also make tax evasion less attractive.
Monday, August 9, 2004 ~ 12:03 p.m., Dan Mitchell Wrote: Retailers in Missouri are gearing up for the state's first-ever sales tax holiday Aug. 13-15, but the temporary tax exemption on back-to-school
purchases of clothing, school supplies, and computers will not extend to all sales taxes in every case. Nearly 180 cities and 66 counties are
choosing not to participate in the tax holiday and thus retailers will continue to charge local-option sales taxes on purchases made in those communities. In Missouri, a state with some 850 municipalities, about
700 cities levy local option sales taxes, according to the Missouri Municipal League. ...Since a sales tax holiday was first offered in New York in 1997, the number of states offering temporary exemptions has
grown substantially, and so has the scope of the exemptions. This year, Missouri is one of 12 states and the District of Columbia offering the
temporary tax break on purchases of clothing, school supplies, and in many cases computers. And while the concept has its skeptics in Missouri, in many other states tax holidays "are considered very
attractive, politically," said Harley Duncan, executive director of the Federation of Tax Administrators.
Monday, August 9, 2004 ~ 10:45 a.m., Dan Mitchell Wrote: If, however, the many bad things [in the U.S. health care system] trouble you, read on. I mean troublesome things like relentlessly rising
costs and bureaucracy, falling patient happiness and the profligate use of resources. Anybody who gives a few hours of thought to the current health-care system can identify the mother of these problems -- the
widespread existence of a third-party payer system. Third party-payers come in the form of government, employers (who self-insure) or insurance companies. This arrangement insulates consumers of health
care from its true cost and encourages overconsumption. Give it another hour of thought and the mother of the third-party payer system itself becomes apparent -- the benighted tax system that favors it.
Employers, for example, generally pay most of the insurance premium for employees. These employer-sponsored plans generally have low deductibles, low coinsurance, and cover lots of services. This kind of
employer-sponsored plan actually makes sense since employer payments are excluded from taxes while direct, or out-of-pocket, payments by employees are made with after-tax dollars. In fact, the tax exclusion is
the chief reason that employers pay $5 out of every $6 spent in the private market.
Monday, August 9, 2004 ~ 9:18 a.m., Dan Mitchell Wrote: ...let's deal with the harsh and uncomfortable reality that these marvelous public schools to which you have entrusted your children
serve more as indoctrination centers as they do places of learning. You shouldn't be surprised. It makes sense to believe that If your child is
attending a Catholic school your child would be taught that the Catholics pretty well have this religion thing down cold. Jewish school?
Same thing. Ditto for a school operated by a Christian fundamentalist church. Why, then, would you expect a school owned, operated and
staffed by the government to be any different? Doesn't it make perfect sense that a government employee working in a government institution would instill in your children the understanding that government is
inherently good? Should you be surprised when you child learns a blind obedience to the dictates of government, and that government is the true solution to all problems great and small?
Monday, August 9, 2004 ~ 7:57 a.m., Dan Mitchell Wrote: [President Bush's] decision to acquiesce to Congress's worst spending impulses, from farm subsidies to Medicare, has given the Democratic
challenger a chance to score political points simply by announcing his good intentions. It's true Mr. Bush never campaigned for a smaller government, but after 9/11 he certainly could have argued that the
government had to choose between guns and butter. Until this year, he's gone along with both. But none of this means the Kerry campaign deserves a free pass. According to last month's estimate from the
National Taxpayers Union, Senator Kerry is promising to increase net spending by $226 billion in the first year, or $6,066 per taxpayer over
four years. And that's a lowball figure. ...While we agree that Mr. Bush has a lousy first-term spending record, he is now saying that in a second
term he'd restrain non-defense increases. Mr. Kerry's stated agenda is increased spending nearly across the board and tax hikes. The voters
can decide which of these better constitutes "fiscal discipline."
Sunday, August 8, 2004 ~ 4:59 p.m., Dan Mitchell Wrote: You can see the consequences of this idiocy at any airport, any day. The last time I flew, I had to show my driver's license, and my boarding
pass, three times. This tactic handily eliminates all those hijackers who have ever tried to board a plane without ID or without bothering to buy
a ticket. (At my hometown airport of Washington Dulles, as a recent video has shown, three hijackers who boarded on Sept. 11 had taken the usual precaution of having tickets and ID but had not bothered to
change their names from the ones on the FBI "terrorism watch-list.") The whole thing is done largely in order to create an impression of
security, and the worst of it is watching your fellow passengers thanking those who pointlessly pat them down and who incidentally make sure that if there is a hijacker aboard, you have been as far as possible
robbed of anything with which to defend yourself. However, it's not very probable that the jihadists will use that precise tactic again, so an immense amount of expensive effort is now being deployed in
deliberately looking the wrong way. Whereas, to search every train and ship passenger and every bridge-and-tunnel user would be, as we know, to bring our commerce and society to a halt and save the murderers the
trouble of doing so.
Sunday, August 8, 2004 ~ 1:19 p.m., Dan Mitchell Wrote: Who caused the loss of French and German economic vigor since the mid-1970s and its concomitant unemployment? Who dreamed up the
"European social model," who built it up by relentless tinkering, who is "struggling" for job creation and who is resisting any timid attempt to
let loose the normal forces of normal job creation? Government apologists who boast of a relatively high level of inward foreign investment as proof that their economies are not as unhealthy and
unattractive as all that, should look instead at the dismal trends in business investment from domestic sources. Across all industries, returns on capital in the Franco-German "core" of Europe are
mediocre. Where the average is mediocre, too many individual branches and firms have sunk or fear soon to sink below the breakeven point. The threat to relocate unless more work comes forth for no greater pay
is an obvious enough escape route. ...The French... government spokesman promised measures in 2005 to "control the relocation of
enterprise," with a preliminary "social dialogue" to start next September. If this is what a government that calls itself center-right
proposes to do, how would a government that called itself Socialist go about it? Some would answer that in France you could not tell the difference.
Saturday, August 7, 2004 ~ 12:16 p.m., Dan Mitchell Wrote: The Belgian government's ambitious revenue target for the repatriation of offshore investment funds under a current amnesty is unlikely to be
achieved, according to the findings of a recent poll. Under the amnesty scheme, which has been operating since January, individuals are permitted to bring home undeclared assets held overseas so long as they
pay a penalty of between 6% and 9% of the assets' value to reflect unpaid back taxes. However, a survey conducted by Belgian weekly financial publication, Trends, has revealed that almost 60% of the 402
members of the Belgian Institute of Accounts and Tax Consultants polled would advise their clients against repatriating assets under the scheme... The authorities were hoping to collect €850 million in
revenues from the amnesty which runs until the end of the year, but as of the end of June, a relatively paltry €17.5 million had found its way into the government's coffers.
Saturday, August 7, 2004 ~ 7:15 a.m., Dan Mitchell Wrote: House Speaker Denny Hastert...told us he'd like to replace the income tax with a national sales tax or some kind of European-style
value-added tax (VAT). As a tax on consumption, his thinking goes, these would be less destructive of economic incentives than the current income tax. If we were designing a tax code from scratch, we'd agree
that a consumption tax is preferable. But until someone abolishes the 16th Amendment to the Constitution, we're not likely to end up with a
sales tax replacing the income tax. Instead we'll get both, if not at first then eventually. We also dislike the VAT, because it is applied at every
stage of business production and is thus a stealth tax that raises huge amounts of revenue but shows up only in higher prices for consumers. The VAT is one reason the government swallows such a large chunk of
GDP in Europe. ...we've long thought that the most useful reform Republicans could promote would be to abolish income tax withholding. Make taxpayers write one big check to Uncle Sam every year, and the
IRS will matter much less because voters will insist that taxes be lower.
Friday, August 6, 2004 ~ 4:51 p.m., Dan Mitchell Wrote: Verbal coups have long been a specialty of the left. Totalitarian countries on the left have called themselves "people's democracies" and
used the egalitarian greeting "comrade" ...In democratic countries, where public opinion matters, the left has used its verbal talents to
change the whole meaning of words and to substitute new words...The word "swamp," for example, has been all but erased from the language.
Swamps were messy, sometimes smelly, places where mosquitoes bred and sometimes snakes lurked. The left has replaced the word "swamp"
with "wetlands," a word spoken in pious tones usually reserved for sacred things. ...Restrictive laws about "wetlands" have imposed huge
costs on farmers and other owners of land that happened to have a certain amount of water on it. Another word that the left has virtually
banished from the language is "bum." Centuries of experience with idlers who refused to work and who hung around on the streets making a nuisance -- and sometimes a menace -- of themselves were erased
from our memories as the left verbally transformed those same people into a sacred icon, "the homeless." As with swamps, what was once messy and smelly was now turned into something we had a duty to
protect.
Friday, August 6, 2004 ~ 10:58 a.m., Dan Mitchell Wrote: As a result of the growing importance of international capital flows, U.S. tax policy is no longer insulated from global market forces.
Increasingly, one of the considerations in the design of a country's tax system must be how it compares with that of its major trading partners.
...The United States is a relatively low tax country. According to OECD statistics, as of 2001, the total tax burden in the United States-federal, state, and local combined-was 28.9 percent of GDP, fourth lowest
among the 30 OECD countries... According to 2001 OECD statistics, outstanding marketable debt of the United State government was less than the average OECD country by 12.7 percent of GDP. ...While the
United States is a relatively low tax country, it relies more heavily on taxes on income and profits-both as a share of total taxation and as a share of GDP-than the average OECD country. ...Income and profits
taxes collected at all levels of government amounted to 14.1 percent of GDP in the United States in 2001 as compared to 13.4 percent for the average OECD country... Unless the sunset in the 2001 Act is removed,
the top federal individual income tax rate will increase to 39.6 percent in 2011. This would put the United States 2 percentage points above the current average for OECD countries. High marginal income tax rates
discourage savings and work effort - particularly of secondary workers-and encourage tax avoidance and evasion. Moreover, countries with high personal income taxes are unattractive places to
locate facilities with high-paying jobs such as corporate headquarters and research facilities. ...The average corporate rate for the 25 members of the newly expanded European Union is just 26.3, 8.4
percentage points less than the U.S. rate. ...Unlike most OECD countries, the United States imposes corporate income taxes at the state and, in some cases, local levels of government. Taking into account
multi- level corporate income taxes, the disparity between the U.S. rate and the OECD average is likely greater. ...Despite relatively high rates,
the U.S. corporate income tax raises relatively little revenue. In 2001, U.S. corporate income tax receipts amounted to just 1.9 percent of GDP compared to the OECD average of 3.5 percent of GDP). ...High
corporate income tax rates are economically unattractive for a number of reasons. First, high corporate income tax rates make the United States a relatively unattractive location for corporate investment. In a
global economy, countries with high corporate income tax rates may suffer a declining share of worldwide investment and reduced employment opportunities for local workers. Moreover, Merrill's testimony also explains why the tax system creates a disadvantage for multinational companies chartered in the U.S. Countering some of the silly analysis from the left, he specifically notes that this undermines job creation in America: A decline in the market share of U.S. multinationals would adversely affect domestic workers. U.S. multinationals play an important role in
promoting U.S. exports and creating high-wage jobs. According to the U.S. Commerce Department, in 2001, U.S. multinationals were directly responsible, through their domestic and foreign affiliates, for $425
billion of U.S. merchandise exports-almost 60 percent of all merchandise exports. The role of multinationals in promoting exports is corroborated by an OECD study which found that each dollar of
outward foreign direct investment is associated with $2.00 of additional exports. Dartmouth professor Mathew Slaughter has found that over the 10-year period 1991-2001, jobs added by U.S. multinationals
abroad were matched almost two for one by U.S. jobs added in their parent operations. Moreover, Slaughter finds that U.S. multinationals increased their domestic employment at a faster pace than U.S.
companies without foreign affiliates-evidence that the foreign operations of U.S. multinationals increase domestic job growth. ...Compared to major competitor countries, the United States is a
relatively unattractive jurisdiction in which to locate the headquarters of a multinational company. Quantitative evidence of this comes from a
study published by the European Commission in 2001 which found that, on average, U.S. multinationals bear a higher effective tax rate-ranging
from three to five percentage points--when investing into the European Union than do multinationals headquartered in the EU.
Friday, August 6, 2004 ~ 10:30 a.m., Dan Mitchell Wrote: ...tax and exchange control evasion, and other irregular capital flows are buoying the US dollar... A study by Brendan Brown, London-based
head of research at Mitsubishi Securities International, estimates that these 'grey capital inflows' could be accounting for 30-40 per cent of the
capital flows that offset the US trade and services deficit. ...'In 2003, there was a net flow of funds from the rest of the world to the US of US$550 billion and an estimated US$580 billion this year.' Around
30-40 per cent or up to US$240 billion of these flows are classified as 'errors and omissions' since they cannot be traced from official sources.
'These huge amounts are 'grey money' from continents such as South and Central America, Africa, parts of Asia and offshore tax havens,' says Mr Brown, who regularly estimates global capital flows.
Friday, August 6, 2004 ~ 8:36 a.m., Andrew Quinlan Wrote: ...former Navy Secretary John Lehman, a member of the September 11 commission, objected to a federal policy subjecting airlines to fines if
they subjected more than a fixed number of Arab males to added questioning during security checks. Secretary of Transportation Norman Mineta's office complains that his department is getting a bum
rap, and that no such policy exists. ...But a considerable body of evidence suggests that, beginning in the Clinton years and continuing after September 11, something no less troubling has taken hold: a
mindset and series of practices that discourage the use of common sense in deciding who should be permitted to board a plane. ...Herb Kelleher, founder and chairman of Southwest Airlines... said that random
screening (the silliness which often subjects small children and elderly passengers to added security scrutiny, known as secondary screening) was instituted by the Clinton Justice Department, which was concerned
about equality of treatment. DOT stated earlier this year that "secondary screening of passengers is random or behavior based. It is not now, nor has it ever been based on ethnicity, religion or
appearance." This raises an interesting question for Mr. Mineta: Given the reality that the September 11 hijackers had ethnicity, religion and
appearance in common, does it make sense to ban any consideration of these factors in deciding who may board a plane? ...Edmond Soliday, United Airlines' former vice president for security, told the September
11 commission that one Justice Department official informed him that "if I had more than three people of the same ethnic origin in line for additional screening, our system would be shut down as
discriminatory."
Friday, August 6, 2004 ~ 7:15 a.m., Dan Mitchell Wrote: German Chancellor Gerhard Schröder faces a political storm after unveiling plans to cut benefits for children of unemployed parents if the
children have more than 750 euro in piggybank savings. ...Bild-Zeitung - a mass circulation daily in Germany - quoted children as young as four
saying, "Please, government, leave my pig alone". ...The reform of unemployment benefits will have a widespread impact on German society as the EU's largest economy struggles with unemployment levels
above four million.
Friday, August 6, 2004 ~ 1:45 a.m., Dan Mitchell Wrote: The order to close a portion of First Street NE and to set up more than a dozen security checkpoints around the Capitol was announced by U.S.
Capitol Police on Monday over the loud objections of Williams and other city officials, who were not consulted. Since then, the federal government has erected more checkpoints -- first near the World Bank
and the International Monetary Fund and yesterday around the Federal Reserve Building. They also announced that they would block off the sidewalk on 15th Street NW alongside the Treasury building but stopped
short of restricting truck traffic on parts of the street.
Thursday, August 5, 2004 ~ 1:05 p.m., Dan Mitchell Wrote: Kerry asserts that "health care ... is a right for all Americans." One person's right to receive a valuable service for less than it costs is some
other person's obligation to pay for it. Besides, Kerry was not talking about health care, but about health insurance -- a plan to "save families
up to $1,000 a year on their premiums." If voters don't notice the old retailers' trick -- as in "save up to 50 percent," they might imagine
they've been promised a thousand dollars for their vote. But there are 110 million U.S. households, so a giveaway of "up to" a thousand
dollars each could add "up to" $110 billion a year. How would Kerry pay for it? The website says by "cracking down" on "waste, greed and abuse."
Thursday, August 5, 2004 ~ 11:57 a.m., Dan Mitchell Wrote: Santa Monica, California, has decreed a fine of $2,500 a day for not cutting your hedges! Has someone discovered some terrible health
hazard or other danger from hedges that are too high? Not at all. The politicians who run Santa Monica have simply decided that people should not be able to build a high wall of hedges around themselves.
...Santa Monica is not unique. Wherever you get enough far left people in power, you can find a similar willingness to force everyone into collectivist conformity at all costs. ...None of this is peculiar to the
United States. ...In Britain, for example, the right to defend yourself is being taken away in many ways. ...Britons who have held burglars in
their homes until the police arrived, by using toy pistols, have been arrested along with the burglars. To the collectivist mindset, independent self-help of any sort is a threat to their vision of the
government as the sole source of protection and direction. ...Making other people's decisions for them without being held accountable for the
consequences is the left's vision in many different contexts -- including outsourcing our foreign policy to the United Nations or to the International Court of Justice, whom nobody elected and whom nobody
can hold accountable. Hedges in Santa Monica are just one of the signs of our times. They want to cut our freedom down, not just hedges.
Thursday, August 5, 2004 ~ 10:22 a.m., Dan Mitchell Wrote: One of the secrets of conservative America is how often it has welcomed Republican defeats. In 1976, many conservatives saw the
trouncing of the moderate Gerald Ford as a way of clearing the path for the ideologically pure Ronald Reagan in 1980. In November 1992, George H.W. Bush's defeat provoked celebrations not just in Little
Rock, where the Clintonites danced around to Fleetwood Mac, but also in some corners of conservative America. "Oh yeah, man, it was fabulous," recalled Tom DeLay, the hard-line congressman from Sugar
Land, Texas, who had feared another "four years of misery" fighting the urge to cross his party's too-liberal leader. ...there are five good
reasons why, in a few years, some on the right might look on a John Kerry victory as a blessing in disguise. First, President Bush hasn't been as conservative as some would like. Small-government types fume that
he has increased discretionary government spending faster than Bill Clinton. ...The third reason for the right to celebrate a Bush loss comes in one simple word: gridlock. Gridlock is a godsend to some
conservatives -- it's a proven way to stop government spending. A Kerry administration is much more likely to be gridlocked than a second Bush administration because the Republicans look sure to hang on to the
House and have a better-than-even chance of keeping control of the Senate. ...the fifth reason why a few conservatives might welcome a November Bush-bashing: the certain belief that they will be back, better
than ever, in 2008. The conservative movement has an impressive record of snatching victory from the jaws of defeat. Ford's demise indeed helped to power the Reagan landslide; "Poppy" Bush's defeat set
up the Gingrich revolution. In four years, many conservatives believe, President Kerry could limp to destruction.
Thursday, August 5, 2004 ~ 7:00 a.m., Dan Mitchell Wrote: The International Monetary Fund has advised the government of the United States to increase revenues from taxes in order to bring about a
reduction in the budget deficit and make provision for extra spending ... the report claimed there is ample room for a broadening of the corporate tax base, especially by addressing the widening gap between
corporate book and taxable profits which could have brought an extra $130 billion in corporate income into the tax net.
Wednesday, August 4, 2004 ~ 10:19 a.m., Andrew Quinlan Wrote: If there is one general characteristic of white liberals, it's their condescending and demeaning attitude toward blacks. ...[Kerry's]
vision differs little from one that holds that blacks are a rudderless, victimized people who cannot control their destiny and whose best hope depends upon the benevolence of white people. Have you watched
some white politicians talking to black audiences? It's bad enough to watch the Revs. Al Sharpton and Jesse Jackson do an imitation of Flip Wilson's Rev. Leroy. But to watch Al Gore and Bill Clinton do it is
insulting at the least. ...Unlike so many other white politicians speaking before predominantly black audiences, Bush didn't bother to pander and
supplicate. He spoke of educational accountability and school choice and condemned high taxes, increased regulation and predatory lawsuits. He defended the institution of marriage. He didn't see blacks
as victims in need of a paternalistic government to come to our rescue. He saw blacks needing what every American needs -- an environment where there's rule of law, limited government and equality before the
law.
Wednesday, August 4, 2004 ~ 9:48 a.m., Dan Mitchell Wrote: Score two for taxpayers. Last weekend in California, Republican Arnold Schwarzenegger signed a budget that avoids new taxes and brings
spending in line with revenues, just like he promised during the recall campaign. And in Colorado, backers of an initiative to relax the state's tax-and-spend limits thought better of putting their plan on the
November ballot after polls revealed that voters want the strictures to stay in place. ...Governor [Schwarzenegger] didn't buckle to the Democratic Legislature's demand for higher taxes that could hinder the
state's economic recovery. In addition, cities and counties won assurances that state lawmakers will keep their hands out of local coffers, which should help check Sacramento's tendency to overspend.
And in keeping his promise to make California more business-friendly, Arnold even managed to push through a tort reform measure that weakens the "sue your boss" law signed by predecessor Gray Davis at
the behest of the trial lawyers. ...If California is looking for a model, it won't do better than Colorado, where a taxpayer bill of rights (or
Tabor) limits state expenditures to population growth and the inflation rate. Colorado's constitution also requires that surplus revenues be returned to taxpayers.
Wednesday, August 4, 2004 ~ 8:00 a.m., Dan Mitchell Wrote: ...the Michigan Supreme Court has finally stated the obvious: What's good for General Motors wasn't so good for the people -- and it sure
didn't justify violating their "sacrosanct" Constitutional property rights. Though Friday's decision comes nearly a quarter-century after an
earlier Michigan Supreme Court cleared the way for Detroit to condemn the homes, churches, schools and hospitals of Poletown on behalf of a Cadillac plant, it's hard to overstate the significance of this
reversal. By expanding the justifications for eminent domain seizures to include "economic development," the earlier decision not only ushered
in the destruction of a neighborhood. It set a woeful precedent that continues to embolden unseemly coalitions of private developers and tax-hungry municipalities using government powers to take other
people's land. ...the "economic development" argument has essentially vitiated what the Founders intended by putting property rights in the
Constitution in the first place: to prevent the rich and powerful from manipulating the law to take property from those less well connected. The good news is that this latest Michigan ruling should force a major
rethink.
Tuesday, August 3, 2004 ~ 10:30 a.m., Dan Mitchell Wrote: I was glad to hear Sen. John Kerry quote Abraham Lincoln as he accepted the Democratic nomination, but he did not read Lincoln far
enough. Lincoln famously said, "I don't believe in a law to prevent a man from getting rich; it would do more harm than good." ...The Kerry-Edwards economic agenda is now clear: They see the American
system as a zero-sum game. ...Not only left-leaning Democrats, but too many Republicans don't understand the difference between tax rates and tax revenue. As John F. Kennedy reminded us in 1962, "It is a
paradoxical truth that tax rates are too high and tax revenues too low, and the soundest way to raise revenues in the long run is to cut rates
now." ...As secretary of Housing and Urban Development, I spent a lot of time talking to people who lived in public housing. I never heard one person say they want to make the rich poor; they only want the
opportunity to get ahead and get out of poverty. High tax rates don't hurt the rich, who can shelter their income; high tax rates just keep the
poor in poverty. ...Kerry makes an age-old mistake of treating workers' station in life as static. That is exactly wrong. A worker earning
"middle-class" income today may be in the top 1 percent tomorrow. Researchers at the Urban Institute found that anywhere from 25 percent to 40 percent of Americans move from one income quintile to
another in a single year. Over longer periods the shifts are even larger: about 45 percent over five years and 60 percent over average 15-year
periods. Today's laborer is tomorrow's investor, owner and job creator.
Tuesday, August 3, 2004 ~ 9:17 a.m., Dan Mitchell Wrote: Mr Bendukidze made his name and fortune as an industrialist in neighbouring Russia... Next year—if not sooner—he will cut the rate of
income tax from 20% to 12%, payroll taxes from 33% to 20%, value-added tax from 20% to 18%, and abolish 12 kinds of tax altogether. He wants to let leading foreign banks and insurers open
branches freely. He wants to abolish laws on legal tender, so that investors can use whatever currency they want. He hates foreign aid—it "destroys your ability to do things for yourself," he says... As to where
investors should put their money, "I don't know and I don't care," he says, and continues: "I have shut down the department of industrial policy. I am shutting down the national investment agency. I don't want
the national innovation agency." Oh yes, and he plans to shut down the country's anti-monopoly agency too. "If somebody thinks his rights are
being infringed he can go to the courts, not to the ministry." He plans, as his crowning achievement, to abolish his own ministry in 2007. "In a normal country, you don't need a ministry of the economy," he says.
Tuesday, August 3, 2004 ~ 8:46 a.m., Dan Mitchell Wrote: This image of a casual Western European work ethic tends to be viewed with just short of scorn by the world's other wealthy economies.
...Europe, the standard criticism goes, has not matched the American expansion for most of the last decade and has even fallen behind Japan
in recent quarters. Its citizens are on average almost 30 percent poorer than their counterparts on the other side of the Atlantic...Potential growth in the next decade risks being stuck at 2 percent - one
percentage point below that of the United States. ...Over the last half century, Western Europeans have gradually opted to work less and take longer vacations. They have put in place varying national versions of
public universal health care, education and retirement benefits. They have set up a complex web of minimum income legislation, including unemployment subsidies and disability benefits, and basic social welfare
...With a growing number of retirees, joblessness is increasingly straining the continent's state-financed pension and health systems: the combined burden is forecast to rise to as much as 8 percent of gross
domestic product in most European Union member nations, the European Commission estimates.
Tuesday, August 3, 2004 ~ 6:25 a.m., Dan Mitchell Wrote: While the U.S. and U.K. emphasized low taxes, deregulation and hard work, union leaders in Germany were realizing their vision of a "leisure
economy." The mandatory reduction in working hours was supposed to miraculously combine the "humanization of the working environment"
with a giant job-sharing program. As people worked shorter hours, the theory went, employers would just have to hire more people to pick up the slack. But guess what? If you pay people the same money for doing
less work, employers have less money, not more, for hiring. Unemployment rose instead of falling, taxes went up to pay for the additional jobless benefits and the economy stagnated, forcing
consecutive governments to pile on more and more debt to finance the welfare state. Until now. This summer, the German unions' springtime -- along with the 35-hour workweek -- has come to an abrupt end. But
instead of calling for a general strike, the unions gave the expanded working hours their blessing -- and then denied that anything had really
changed. ...What's changed? With a jobless rate twice as high as in the U.S. and a "recovery" (1.7% economic growth projected for this year)
that would be considered stagnation in America, Germans are no longer so sure about their economic model. ...The prophecies of doom seem to be having some effect. After years of wavering, Chancellor Gerhard
Schröder finally embarked on a cautious reform project to curtail the spiraling costs of the welfare state. As timid as it might be, last year's reform package is nevertheless unprecedented in its scope. Germans
who have watched their welfare state expanding for more than five decades suddenly have to come to terms with real cuts to the country's health-care, pension and unemployment systems.
Monday, August 2, 2004 ~ 12:26 p.m., Dan Mitchell Wrote: Last May, Vermont Democratic Senator Patrick Leahy ...touted a bill ...that would put public school vending machines under the purview of
the U.S. Department of Agriculture. Any school not abiding by USDA recommendations would lose funding from the federal school lunch program. ...Leahy called attention to the alarming childhood obesity
problem, which he blamed in part on "children filling up on soda before lunch," and schools that "sell our children's health to the highest bidder
on a sodas contract." The Vermont senator has an easy solution to the problem: He wants kids drinking more milk. ...Last June, Leahy and
Sen. Jim Jeffords introduced the "National Dairy Equity Act," which would "establish regional boards with the authority to require
processors to pay a higher price for Class I milk," -- that's industry jargon for the kind of milk you, I, and all of those thousands of obese
and/or hungry and /or malnourished children get at the grocery store. These boards would be authorized to establish minimum (but not maximum) regional prices for milk, effectively severing the dairy
industry from what Jeffords and Leahy call "the volatility in the marketplace," but what most of the rest of us might call, "the free
market," or, alternately, "lower prices for milk consumers." It's a typical federal government boondoggle, in which consumers are forced
to pay higher prices so that laggards in a protected industry can stay in business. Except in this case, it's particularly egregious, because it
comes from a politician who introduced bills both one month earlier and nine days later in which he lamented the health crisis afflicting America's children, and proscribed milk and dairy as part of the solution.
Monday, August 2, 2004 ~ 10:43 a.m., Dan Mitchell Wrote: President Vladimir Putin July 26 approved Russian lawmakers' plans to reduce the rate of Unified Social Tax (UST), a payroll tax, as part of
the country's efforts to reduce the tax burden on business. The government also hopes the reduction in the top rate of UST from 35.6 percent to 26 percent will encourage more employers, who pay the tax
on behalf of employees, to declare their staff's real wages. Currently, many Russian companies try to avoid paying UST by declaring a fraction of their staff's payroll.
Sunday, August 1, 2004 ~ 3:40 p.m., Dan Mitchell Wrote: The International Monetary Fund's handling of the crisis in Argentina three years ago almost certainly deepened a recession that threw
millions of Argentines into poverty and sparked political chaos throughout the country, according to a report released yesterday by the IMF's internal audit unit. ...By overlooking Argentina's growing
indebtedness in the 1990s and continuing to lend the country money when its debt burden had become unsustainable, the fund significantly contributed to one of the most devastating financial crises in history,
the report concluded.
Sunday, August 1, 2004 ~ 12:45 p.m., Andrew Quinlan Wrote: Hiromitsu Ishi, the head of Prime Minister Junichiro Koizumi's advisory panel on taxation, has suggested that the timing could be right next
year for an increase in the nation's tax burden. Presenting a tax commission report on social and economic trends, Mr Ishi suggested that income, consumption and inheritance taxes should be raised as
part of the government's wider reforms, which are aimed at boosting tax revenues and averting a future fiscal crisis brought about by the county's ageing population. ...Ishi also stuck to his controversial
recommendation that the 5% consumption tax be raised to a double digit figure, a move he described will be an "inevitable requirement".
|
||||||||||
 |
||||||||||