 |
|
|
|
|
|
|
|
||
 |
|||||||||
|
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, February 28, 2006 ~ 1:26 p.m., Yesim Yilmaz Wrote: We have two main findings. First, we determine that the offshoring of jobs has been a limited phenomenon: Our comprehensive estimate of the number of jobs embodied in U.S. net
imports is small relative to total employment in the United States1-2.4 percent of the total, at the most- both historically and in recent years. Moreover, this estimate is sometimes positive and sometimes
negative, suggesting that international trade does not necessarily mean a loss of jobs for the United States. Second, we find no evidence to support the claims that a surge in offshoring played a large role in
the jobless recovery. Jobs embodied in net imports did not grow at an accelerated pace after the 2001 recession. In fact, the increase in U.S. jobs sent abroad has averaged about 30,000 per month since 2001- a
deceleration from the monthly average increase of 45,000 jobs during the period from 1997 to 2001. ... More broadly, our results show no clear or necessary relationship between a pickup in jobs lost to
trade and weakness in the U.S. labor market. A case in point is the 1997-2001 acceleration in offshoring, which occurred when U.S. payrolls were expanding steadily. Link to this Blog Entry
Tuesday, February 28, 2006 ~ 12:47 p.m., Sven Larson Wrote: With at least three months before the issue of the European Commission Country Report, an occasion to learn whether Romania becomes an EU
member on January 1, 2007, Bucharest authorities received a yellow card from the EU in relation to the macro-economic chapter. The feedback of the authorities regarding tax policy may lead to a rise of the
flat tax quota as of January 2007. "The Romanian authorities need to adopt new measures of budgetary policy in order to adjust the macro-economic imbalances and to prevent the increase of the
budgetary deficit. We have conveyed our recommendations and our requirements to the Romanian authorities in relation to a more active that the budgetary policy should play in adjusting macro-economic
imbalances and in increasing the taxation base on medium term in order to cope with expenditures", according to those declared on Friday, in a press conference, by the European Commissioner for Economic and
Financial Affairs, Joaquin Almunia. Alumnia drew the attention to the adverse effects triggered by the decrease in taxation applied last year, considering the increasing budgetary needs so that expenditures
incurred by upgrading infrastructure, education and for co-funding the European projects could be covered. During the meeting with the European official, Minister of Public Finances, Sebastian Vladescu,
assured him that new modalities were sought for increasing the revenues to the state budget to over 30 per cent of GDP, the safest method being
to increase the flat tax as of 2007. Most likely, the raise percentage becomes public at the end of March when Minister Vladescu presents a tax strategy to cover the next 3 to 5 years.
Tuesday, February 28, 2006 ~ 11:42 a.m., Yesim Yilmaz Wrote: Hazlitt's principled defense of free markets and politically unpopular positions cost him editorial jobs. He refused to blame capitalism for the
Great Depression (The Nation), promote the New Deal or the Bretton Woods agreement (The New York Times), or endorse the Great Society and the ever-growing welfare state (Newsweek). In 1951, he wrote The
Great Idea (later reprinted as Time Will Run Back), a remarkable novel in which, under new ruler Peter Uldanov-a sort of futuristic Peter the Great-the Soviet Union rediscovers free markets. Although pessimistic
in its portrayal of Soviet domination of the United States, overall the book is optimistic. Peter ultimately triumphs against Bolshevik counterrevolutionaries, and the novel argues that great ideas can never
be permanently lost or repressed because the truth can always be rediscovered by the application of human reason. ...In 1959, Hazlitt published The Failure of the 'New Economics,' his chapter-by-chapter
critique of John Maynard Keynes' The General Theory of Employment, Interest, and Money. Many academic economists dismissed the work because Hazlitt was not one of them. But it remains a fascinating, clear
and hard hitting analysis of many of Keynes' contentions that have come to be seen as weaknesses in The General Theory. Hazlitt also edited a
1960 volume of essays by other economists critical of various aspects of Keynes' doctrines. Link to this Blog Entry
Tuesday, February 28, 2006 ~ 8:55 a.m., Dan Mitchell Wrote: Today [21st February 2006] the Isle of Man Treasury Minister, Hon. Allan Bell, announced a package of measures to further stimulate the
inflow of investment and business to the Isle as part of his 2006 Budget speech to Tynwald, the Isle of Man Parliament. A key component of these measures is the introduction of a 0% Corporate tax as standard,
which will take effect from 5 April 2006. ...This is intended to stimulate inward investment by businesses establishing on the Island, and will also
provide a consistent treatment across all sectors of the economy as part of the Isle of Man's commitment to a diversified economy. Presenting an
integrated strategy of business and individual tax incentives, the Budget also introduces a cap on personal income tax at a maximum level of
£100,000 per annum, irrespective of earnings. It is foreseen that this will attract high-net-worth individuals and active entrepreneurs to the Island
with the drive to further stimulate the Isle of Man's burgeoning economy. ...the Isle of Man represents one of the most successful economies in Europe, and is now in its 21st year of unbroken growth,
with unemployment below 1.5%. In the last ten years, its annual growth has averaged 7.4%, compared to an EU average of 2 ½ per cent. Link to this Blog Entry
Tuesday, February 28, 2006 ~ 8:50 a.m., Dan Mitchell Wrote: Ireland cut its corporation tax rate from 38% in 1996 to 12.5% in 2002. While the rates were cut, corporate tax receipts rose by 170% - from
IR£1.4 bn in 1996 to EUR4.8 bn (equivalent to IR£3.8 bn) in 2002. Corporate tax receipts are projected to increase to EUR5.3 bn in 2004. Annual growth of corporate tax revenue was 24.3% between 1996 and
2002. Australia reduced its corporation tax rate from 36% in 1998 to 30% in 2001. Corporate tax receipts have risen by 116% from A$18.8 bn in 1997/98 to A$40.6 bn in 2004/05. That is equivalent to an annual
growth of 16.6% in corporate tax revenue. South Africa reduced its corporation tax rate from 35% in 1998/99 to 29% in 2004/05. Corporate tax receipts have risen by 259% from R19.7 bn in 1999/00 to
R71 bn in 2004/05. That is equivalent to an annual growth of 43.2% in corporate tax revenue. The Czech Republic has cut its corporation tax rate from 31% in 2000 to 26% in 2005 (it will be cut further to 24% in
2006). Over that period, corporate tax receipts have increased by 54% from CZK76 bn in 2000 to CZK117 bn in 2004. That is equivalent to an annual growth of 10.8% in corporate tax revenue. ...In contrast,
countries which have not cut their corporate tax rates have tended to see corporate tax revenues stall. ...Countries that have been cutting
their rates of corporate tax have seen benefits from higher foreign direct investment (FDI). ...The FDI results are striking when one considers the countries whose business tax policies are considered above. The
countries which reduced corporate taxes between 1995-2004 saw the following increases in FDI: Ireland: net FDI inflow of US$92.7 bn. Australia: net FDI inflow of US$44.4 bn. Czech Republic: net FDI
inflow of US$39.4 bn. In contrast, those countries which did not reduce their corporate taxes saw the following reductions in FDI: UK: net FDI outflow of US$404.1 bn. Japan: net FDI outflow of US$223.5 bn. US:
net FDI outflow of USD $50.2 bn.
Tuesday, February 28, 2006 ~ 7:45 a.m., Dan Mitchell Wrote: After three previous vetoes, Wisconsin Governor Jim Doyle finally did right by inner-city school kids last week and signed on to a bipartisan
compromise that would expand Milwaukee's successful school voucher program. The 16-year-old Parental Choice Program, which provides vouchers for low-income children to attend private schools, is the
nation's largest. But under current law enrollment is capped at about 15,000 students, or 15% of Milwaukee's public school enrollment. The deal being hashed out by Governor Doyle, a Democrat, and State
Assembly Speaker John Gard, a Republican, would lift that cap by 50% to accommodate some 22,500 students. This fix may seem like a no-brainer. After all, the program's success is apparent not only by its
popularity but by study after study showing that vouchers have increased graduation rates and raised education standards. ...a sustained grass-roots campaign led by choice proponents -- along with
flagging poll numbers among Mr. Doyle's pro-voucher black base in an election year -- forced the Governor's hand. A particularly effective
television spot by the Alliance for Choices in Education featured a black father telling the camera, "If school choice is good enough for the
Governor's family, I ought to be able to have it, too." Governor Doyle's son attended a private school. Sometimes it helps to point out the
hypocrisy of public officials who exercise the very freedoms they deny others.
Monday, February 27, 2006 ~ 8:31 a.m., Dan Mitchell Wrote: While there's some truth to the old joke about economists never agreeing on anything, most of us actually agree on a lot, including the
fact that when the minimum wage law confronts the law of demand, the law of demand wins every time. And the losers will be the least-skilled
workers, who will be out of a job. The wage that exists in the absence of a legally mandated minimum reflects the willingness of workers to work
(supply) and the willingness of employers to hire them (demand); and the main determinant of what employers are willing to pay is the productivity of workers. That's why most working people are not
directly affected by the minimum wage: Their productivity and, hence, their pay, are already well above it. The law of demand says that at a
higher price, less is demanded, and it applies to grapefruit, cars, tickets to Terminator movies and, yes, labor. Since a legislated increase in the
price of labor does not magically increase workers' productivity, some workers -- the least-productive ones -- will lose their jobs. That's why economists looking for the effect of the minimum wage on employment
don't look at data on 45-year-old men but, instead, on teenagers and young adults, especially black teenagers and young adults. ...Many Democrats in California who support a higher minimum wage probably
don't understand its nasty effects on younger, less-productive workers. But there's a less benign reason: The Democratic Party and many of its members are closely affiliated with unions. Union members themselves
almost always make more than the minimum wage but support it anyway, because it hobbles competition from low-wage workers.
Monday, February 27, 2006 ~ 7:14 a.m., Dan Mitchell Wrote: If you think Republicans on Capitol Hill have troubles, take a look at Virginia, where GOP lawmakers are busy writing an instruction manual
on how to become a minority party. Republicans in that ostensibly "red" Southern state got their clocks cleaned in November's elections after
they refused to take a coherent stand on taxes, and Democrat Tim Kaine squeezed to their right on pocketbook issues. As GOP state senator Ken
Cuccinelli explained, "We ran on a message of almost being for tax cuts, almost for smaller government, almost for protecting Second Amendment rights, and almost being pro-life. As a result, the voters
almost came out and voted for us." And they apparently have learned nothing from that rout. When the legislature reconvened last month, the
first proposal from the majority Republicans in the state senate was to endorse a $1 billion tax hike for roads and transit projects -- the second
huge tax increase in two years. The GOP plan would increase auto fees, the gas and diesel tax, and even taxes on batteries and tires. This is the
same party that last won the governorship under Jim Gilmore in 1997 promising to abolish the very car taxes they now want to increase. Last week the senators floated another tax plan that is so bizarre and
complicated it has made them a laughing stock. This scheme would raise the gas tax by 5%, but the sponsors insist that "no one would have to
pay the tax if they didn't want to," because motorists could get a rebate at the end of the year if they keep shoeboxes full of tiny scraps of service
station receipts. This would add immeasurably to the joys of April 15. ...over the past decade, the state budget has swollen at twice the rate of
inflation plus population growth in the state. That's an $11 billion bonanza for state agencies, or about $500 more spending annually per Virginian.
Sunday, February 26, 2006 ~ 4:00 p.m., Sven Larson Wrote: Hong Kong Financial Secretary Henry Tang, going some way to meet public demands, has announced a modest tax concession coupled with
start of consultations on introducing a goods and sales tax (GST). In his annual budget speech, Tang said he will cut taxes by 1.5 billion Hong
Kong dollars (192 million US) this year through rejigging the tax bands as the territory had made a full recovery from the 1997-98 Asian financial crisis. The move was aimed to remove the burden on
taxpayers, particularly middle-class families, he said. He forecast the city's first budget surplus of 4.1 billion dollars (526 million US) in the
year to March 2006, the first in seven years, but he opposed major tax concessions considering future challenges and uncertainties. "As a government that manages public finances prudently and keeps
expenditure within the limits of revenues, we should not rush into deciding on substantial tax reductions," he said. Tang said he understood demands for restoring salaries tax to its 2002-03 levels but
feared a major tax reduction would shrink the city's already narrow tax base still further.
Saturday, February 25, 2006 ~ 1:30 p.m., Dan Mitchell Wrote: $1,401,104,263. That's how much of our hard-earned money has gone to subsidize the spring break-style trips and conferences of the federal
government over the last five years. Spending on bureaucracy boondoggles has increased some 70 percent in that time period. ...Why are we paying for HUD employees to attend the New York State
Governor's Dr. Martin Luther King Symposium? Or to a conference held by the radical, left-wing, open-borders advocacy group, the National Council of La Raza? Did the Department of Justice really need to
dispatch workers to the "Women Are Sacred" conference in sunny Phoenix? Was it necessary to send a whopping 200 HHS employees to a
Netherlands "International Symposium on Night and Shiftwork"? Wouldn't it have saved us all time and money if the HHS researchers traveled to a nearby 7-11 or nursing home instead? The spendthrift HHS
has been among the worst transgressors -- burning through more than $300 million on conferences between 2000-2005.
Friday, February 24, 2006 ~ 9:02 a.m., Dan Mitchell Wrote: ...the "lump of tax revenue fallacy", which is based on the notion that changes in tax rates have absolutely no impact on individual or business
behaviour and, hence, on the arithmetic link between tax rates and revenue. Given certain tax rates, there will be a "lump" of tax revenue.
In a crude example, cutting income tax rates by 10pc (say from 22pc to 20pc) will result in a 10pc reduction in revenue. But tax changes have
significant "dynamic" impacts on individual and business behaviour and, hence, on revenues. They can crucially influence investment decisions, how much people work and save, or whether businesses move
their operations overseas to avoid confiscatory tax rates. All these decisions will have major knock-on effects for the overall ability of the
economy to grow - and thus generate tax revenue. The static "lump of tax revenue" notion, which crucially ignores these dynamic effects of
tax changes, is, therefore, "fallacious". Significantly, it completely fails to allow for the proven fact that judicious tax cuts can stimulate growth and employment and, hence, revenues.
Friday, February 24, 2006 ~ 8:47 a.m., Yesim Yilmaz Wrote: We find that the [import price] index overstates import price inflation by 1.2 percentage points per year for the 1972-2001 period. The real
cost of imports was almost 30 percent lower at the end of this period than the conventional price index would suggest. This drop in import prices, we contend, has raised U.S. welfare by $260 billion, or about 3
percent of 2001 GDP. The magnitude of this gain from trade suggests that the effects of variety growth on prices and welfare merit further exploration. Link to this Blog Entry
Friday, February 24, 2006 ~ 8:03 a.m., Sven Larson Wrote: Brazil exempted foreign investors from a capital-gains tax on local government bonds in a bid to lure more capital to the country's $465
billion debt market. President Luiz Inacio Lula da Silva scrapped the 15 percent tax on foreigners' gains from federal government bond trading,
bringing Brazil's debt market tax regulations in line with other countries in the region including Mexico and Argentina. Chile also said today it
plans to eliminate a 35 percent capital gains tax that some foreign investors have to pay on domestic bonds. The move will help Brazil, the most indebted emerging-market country, sell bonds with longer
maturities and lower interest rates by drumming up more demand from foreigners, said Nuno Camara, an economist at Dresdner Kleinwort Wasserstein. Treasury Secretary Joaquim Levy said he expects
foreigners' holdings of local bonds to double to $10 billion within a year. Link to this Blog Entry
Friday, February 24, 2006 ~ 7:18 a.m., Dan Mitchell Wrote: Financial Secretary Henry Tang used Hong Kong's annual budget announcement yesterday to lecture the city's industrious inhabitants on
the need to fulfill "their civic responsibility by paying some tax." He refused to reverse the bulk of the previous tax increases, and -- for good
measure -- also proposed a sales tax. ...he missed the real lesson from resilience of the U.S. economy; that the Bush tax cuts have paid for themselves many times over by stimulating economic activity and
ultimately generating more tax revenue as a result. The same could be done in Hong Kong. Economist Tim Condon of ING has written on this page that a 25% cut in Hong Kong's tax rates would pay for itself within
5-10 years. ...That doesn't mean Hong Kong's low tax regime is under threat -- at least not just yet. The city abolished the estate duty in last
year's budget and its top income tax rate for individuals...still stands at an enviable 16%.
Thursday, February 23, 2006 ~ 12:17 p.m., Yesim Yilmaz Wrote: What is the difference between services of "general interest" (out) and services of "general economic interest" (in)? No one can honestly say:
it's a question of how you interpret a messy and contradictory text. Is consumer protection included as a reason to impose new rules affecting
foreign service providers? But those behind the compromise think they have achieved a quiet move in the right direction. "Constructive
ambiguity" is the polite way of putting it. ... Commission President Jose Manuel Barroso was fearful a defeat in the parliament would sent an
appalling signal across Europe that the protectionists had won, and that his agenda of liberalisation was dead. Some argue this demonstrated a lack of courage and he should have had a showdown. They say he
would have won a smaller majority for a much more radical plan. But that is not the way the EU tends to work. The Socialists and a majority of the Christian Democrats thought that something was better than
nothing. ... Some of a New-Labourish bent argue it is the best of both worlds: some liberalisation along with sensible protection. Others say
that it is a foot in the door, a message to the 25 nation states (or do I mean the French?) that they cannot stand in the way of opening up their
economy to competition. But the ball is now in the court of the countries to decide what they want to make of this measure. And I think it will be
in the law courts for many years after that. Whether this is a major defeat or a tactical withdrawal, it is going to be a long war.
Thursday, February 23, 2006 ~ 10:45 a.m., Sven Larson Wrote: Finance Minister Jim Flaherty is refusing to guarantee the Conservatives will move quickly to fulfill all the spending and tax-cut
promises his party laid out in the election campaign. Flaherty, who is to deliver his first federal budget this spring, said he is assessing the government's ability to implement its spending and tax-cut pledges
without running a deficit. "I have only been there less than two weeks. I can tell you I'm not in a position to say one way or the other where we're
moving with these," the former Ontario finance minister told CTV's Question Period. "But we will keep our commitments going forward."
On the way to winning a minority government, Prime Minister Stephen Harper showered voters with $75 billion in spending and tax-cut promises over a five-year period. He also committed to transferring
more federal resources to the provinces. With this in mind, analysts say Flaherty could end up with limited room to manoeuvre if he wants to ensure that the Tories do not allow the federal government to wind up
running a deficit for the first time since 1997.
Thursday, February 23, 2006 ~ 8:47 a.m., Dan Mitchell Wrote: One of the more amusing lines in President Bush's State of the Union Address last month was his call for yet another commission to study the
problem of entitlement spending. ...Bush's call for an entitlement commission is laughable is because he is largely responsible for the growing crisis of entitlement spending. That is because he rammed a
vast expansion of Medicare through a Republican Congress in 2003 that increased the unfunded liability of that program by almost 40 percent.
According to Medicare's trustees, the unfunded liability of Medicare is $68.1 trillion. Of that, $18.2 trillion is accounted for just by the new drug benefit.
Wednesday, February 22, 2006 ~ 12:50 p.m., Andrew Quinlan Wrote: Government bureaucracies are wasteful, sluggish and ineffective, and they impose burdens on the productive sector of the economy.
International bureaucracies, not surprisingly, are even worse. The Organization for Economic Cooperation and Development (OECD) is a good example. ...Because it is dominated by nations such as France and
Germany, it leans to the left, especially on fiscal policy issues. It often publishes reports calling for higher taxes, and the OECD has become
infamous for its antitax competition campaign that seeks to penalize low-tax jurisdictions that attract jobs and capital from Europe's high-tax welfare states. It's not exactly a big surprise to learn Europeans
support higher taxes and bigger government, and a bureaucracy filled with Europeans is almost sure to reflect this statist mindset -- especially
a Paris-based bureaucracy. But it is surprising that American taxpayers pay nearly one-fourth of the OECD's budget, to the tune of some $70
million per year. To put it mildly, we don't get much for our investment. ...The OECD wants higher taxes in America, including a European-style value-added tax (a form of national sales tax). Other tax increases
endorsed by the OECD include energy taxes, Social Security taxes, and even fertilizer and SUV taxes. ... Former Rep. Connie Morella, our ambassador to the OECD, did a briefing on Capitol Hill and
unambiguously said the OECD does not support a VAT for the United States. Indeed, she claimed the OECD doesn't support higher taxes of any kind in the U.S. Mrs. Morella doesn't seem to understand what the
group is doing. At least 16 documents on the OECD's Web site promote higher taxes. Ten specifically advocate a value-added tax. (All of them can be read also at www.freedomandprosperity.org.)
Wednesday, February 22, 2006 ~ 12:15 p.m., Yesim Yilmaz Wrote: Complaining about globalization is as pointless as trying to turn back the tide. There are, I notice, no such debates in China. They are not
worrying about potential threats but are busy seizing the opportunities in ways that are transforming their society and ours as well. So, too, are the other emerging economies in Asia and South America. …Each of
these fast-developing economic powerhouses has labor costs a fraction of those in Europe and North America. All can import technology and are working hard to develop their own. Foreign capital is flowing in to
help them. We have to understand that competition can't be shut out. In the end, it can only be beaten. Link to this Blog Entry
Wednesday, February 22, 2006 ~ 10:37 a.m., Sven Larson Wrote: Efforts to cut the UK's budget deficit below 3 per cent in 2006-07 are likely to fail, according to another embarrassing critique of the Government's handling of the public finances from the European Commission. An updated assessment by officials in Brussels says that the Chancellor Gordon Brown may be using over-optimistic growth assumptions when he says that the deficit will be brought quickly below the 3 per cent ceiling.The document, which will form the basis of an official analysis of UK financial plans, is the latest broadside to be delivered by the Commission against the Treasury. There is no prospect of Mr Brown changing course and ordering spending cuts or tax increases to satisfy the Commission. But the criticism from Brussels is damaging to the Chancellor at a time when his handling of the economy is coming under growing scrutiny. Last month, the European Commissioner for Economic and Monetary Affairs, Joaquin Almunia, delivered a formal reprimand to Mr Brown, designating the UK's deficit as "excessive" and ordering it to be "brought below 3 per cent by the forthcoming 2006-07 financial year". http://news.independent.co.uk/business/news/article346498.ece Link to this Blog Entry
Tuesday, February 21, 2006 ~ 7:35 a.m., Dan Mitchell Wrote: ...the first energy bill that Congress wants to enact this year would make America more dependent on foreign energy companies. ...For example,
the $4 billion to $5 billion windfall tax on inventories applies only to the reserves of U.S.-based oil producers (such as Exxon and Chevron),
while foreign producers pay nada. This is an energy policy only Arab oil sheiks could love, because it drives their production and profits up, at the expense of home-grown producers. When Congress last passed a
windfall tax on oil in 1980, America's domestic crude oil production plunged and demand for foreign oil increased by almost 15%. We imposed a tax on ourselves and OPEC nations got the windfall. Equally
wacky is New York Senator Chuck Schumer's idea to deny the same companies the U.S. foreign tax credit -- a fixture of the corporate income tax since 1917. If this took effect, American oil companies would
have to pay the U.S. corporate tax rate and the taxes in the country where it produces the oil. Almost no other nation in the world requires
companies to pay a double tax on foreign profits. So if Mr. Schumer has his way, U.S. oil companies would have to pay as much as a 25% higher
tax on foreign-produced oil than if it were drilled from the ground by a French, Chinese or Danish firm. Mind you, the U.S. would still import
the oil, but any profits from that oil would flow to foreign, rather than U.S., firms and investors. Link to this Blog Entry
Tuesday, February 21, 2006 ~ 6:49 a.m., Dan Mitchell Wrote: When people own property and are fully responsible for losses due to their poor land use or development decisions, they are less likely to build
or rebuild in areas regularly prone to flooding or erosion. This link -- between a person's property ownership and responsibility for their land use decisions -- disciplines people who use their property badly.
Unfortunately, a host of government programs break this link by subsidizing unwise development. All too often the result is lost lives, destroyed property and diminished livelihoods. The U.S. Army Corps of
Engineers (Corps) flood control program and federal flood insurance subsidize construction in flood-prone areas and encourage high-risk development by shifting the cost of insurance and physical protection
against floods from property owners to taxpayers. Link to this Blog Entry
Monday, February 20, 2006 ~ 8:56 a.m., Dan Mitchell Wrote: One is immediately stricken...when having a glance at the website detailing a new Bush administration initiative called "expectmore.gov."
A particularly cringe-worthy aspect of the program comes in the website's choice of a domain name, which ironically reads as, "expect more government." ...Yes, government corruption, redundancy,
power-hoarding, and plain bureaucratic idiocy are all grave problems. But think of the proposed solution...another government program.
...Perhaps the most egregiously telling line on the page is, "If we believe a program is ineffective and can't be fixed, or has outlived its usefulness,
the Administration may recommend Congress spend the money on higher priority programs" Link to this Blog Entry
Monday, February 20, 2006 ~ 8:41 a.m., Dan Mitchell Wrote: ...firing Mr. Chertoff would do nothing to solve the real problem -- which is that vast bureaucratic landmass known as Homeland Security.
If any heads deserve to roll over Katrina, we have a different suggestion. How about the resignations of all the Congressional chairmen who voted three years ago to integrate 22 semi-autonomous
agencies into a single Homeland Security Department and then expected it all to run like General Electric? ...Congress created DHS in a fit of
political self-preservation and then hoped for miracles, which are rare enough in religion but impossible in government. Even an executive of
the caliber of Mr. Welch, the former GE boss, would be hard-pressed to run the 184,000-man, $40 billion Department of Homeland Security with any efficiency. Mr. Welch's famous Six Sigma principles of management
couldn't possibly work when the board of directors is made up of 535 Members of Congress, each out to get as big a share of the pie as possible for his home district. Take emergency-preparedness grants.
DHS has no choice but to allocate its spending according to a formula set by Congress that provides every state with a guaranteed minimum. These pork-barrel allocations eat up 40% of the
emergency-preparedness budget, with the result that Wyoming and Alaska rank Numbers 1 and 2 in per-capita allocations while California and New York finish last.
Monday, February 20, 2006 ~ 8:17 a.m., Dan Mitchell Wrote: Gov. Arnold Schwarzenegger's administration is expected this month to release a plan to combat global warming that recommends raising
petroleum prices and requiring industries to report, for the first time, their greenhouse gas emissions. The increase in gas prices would fund
research into alternative fuels. ...Conservative activists have begun to complain about the idea, branding it a gas tax. The proposal could be
released just before the state Republican Convention, which begins Feb. 24, where GOP activists already are preparing to debate resolutions condemning other Schwarzenegger proposals.
Sunday, February 19, 2006 ~ 3:40 p.m., Sven Larson Wrote: The IRS said that unpaid taxes amounted to $345 billion in 2001, due mostly to underreporting of taxes owed. The statistic refines an estimate
released last year that found taxpayers failed to pay between $312 billion and $353 billion in 2001. Late payments and IRS collections will recover about $55 billion in unpaid taxes, leaving a net gap of about
$290 billion. The IRS estimated the tax gap, the difference between taxes owed and taxes paid, after auditing 46,000 people and combining those findings with previous estimates of unpaid corporate, payroll and
unemployment taxes. IRS Commissioner Mark Everson said complex tax laws played a significant role.
Sunday, February 19, 2006 ~ 2:30 p.m., Dan Mitchell Wrote: The nuns of the Holy Name Monastery say they have been swept into the net cast by the nation's antiterrorism laws. The sisters say the
monastery's main bank account was frozen without explanation in November, creating financial headaches and making the Benedictine nuns hopping mad. ...The nuns didn't know anything was amiss until
Nov. 10, when their checks started bouncing without warning and the account wouldn't accept deposits, including paychecks from state agencies where some of the sisters hold jobs. ...the troubles started
because one 80-year-old nun who is a signatory to the account didn't have her Social Security number and photo ID on file. "Clearly an
international spy," Abbott said wryly. None of the nuns has given the bank that information, Abbott said. "We've been in business 116 years.
No one's ever asked." ...Louis Harvey, president of Dalbar Inc., a securities research firm in Boston, said banks are required by law to
make sure their records are in order. He said there are good reasons the bank didn't notify the monastery its account was under scrutiny. "Let's
assume that it was not nuns and it was some money-laundering scheme run by terrorists," Harvey said. "The last thing in the world you'd expect
the bank to do is notify the terrorists." He said banks look for patterns of activity, such as large transactions that could raise red flags. But
exactly what constitutes a pattern of activity is unclear, Harvey said. The rules are vague by design.
Saturday, February 18, 2006 ~ 1:09 p.m., Dan Mitchell Wrote: The government squandered millions of dollars in Katrina disaster aid, including handing $2,000 debit cards to people who gave phony Social
Security numbers and used the money for such items as a $450 tattoo, auditors said Monday. Federal money also paid for $375-a-day beachfront condos and 10,777 trailers that were stuck in mud and
unusable. ...The GAO report found that up to 900,000 of the 2.5 million applicants who received aid under the emergency cash assistance program - which included the debit cards given to evacuees - based their
requests on duplicate or invalid Social Security numbers, or false addresses and names. In other instances, recipients improperly used their debit cards intended for food and shelter for $400 massages, a
$450 tattoo, a $1,100 diamond engagement ring and $150 worth of products at "Condoms to Go." ...Homeland Security Secretary Michael Chertoff rebuffed the idea that his department was preoccupied with
terror threats at the expense of natural disasters. Chertoff announced the creation of a full-time FEMA response force of 1,500 new employees
and the establishment of a more reliable system to report on disasters as they unfold. The audits released Monday do not try to estimate a total
dollar figure on waste and abuse, but GAO auditor Gregory Kutz told senators during a hearing that it was "certainly millions of dollars; it
could be tens or hundreds of millions of dollars." That includes money for hotel rooms for evacuees that were paid at retail cost. Among the
charges: $438 rooms in New York City and beachfront condominiums in Panama City, Fla., at $375 a night. FEMA also may have bought too many temporary homes, including 10,777 units that currently sit empty
in sinking mud in Hope, Ark. ...Of more than 700 FEMA contracts valued at $500,000 or greater, more than half were awarded without competition, often to politically connected companies such as Bechtel
Corp. and AshBritt Inc.
Friday, February 17, 2006 ~ 2:19 p.m., Yesim Yilmaz Wrote: For most of its modern history, Japan resisted creative destruction by trying to tamp down capitalism's creation and carnage. .. For example,
the country's business closure and start-up rates are a third to a half the United States', with the least change coming in Japan's showcase sector—manufacturing. ... Many of the explanations for Japan's malaise
focus on structural issues, recognizing Schumpeter in spirit, if not by name. There is, for example, the "zombie hypothesis" that Japanese
banks concealed bad credit issued to large money-losing firms, keeping them alive by discounting interest rates and constantly renewing loans.
Throwing good money after bad led to a scarcity of investment funds for more productive enterprises, and the overall economy's productivity and growth rates sagged. ... These views are on the right track. They
recognize structural reform in the financial, industrial and government sectors as necessary for recovery. Their fault lies in being incomplete. A
Schumpeterian approach offers the necessary breadth and depth for a proper diagnosis of Japan's ills.
Friday, February 17, 2006 ~ 11:20 a.m., Sven Larson Wrote: Eurozone recovery hopes were jolted on Tuesday by data showing that German economic growth ground to a halt in the final three months of
last year. The unexpected slowdown revealed underlying weaknesses in Europe's largest economy, especially in consumer spending. The figures took the gloss off recent data showing economic optimism soaring
among German industrialists. French economic growth also slowed significantly at the end of last year. The 12-nation eurozone saw gross domestic product rise by 0.3 per cent in the final quarter of 2005, down
from 0.6 per cent growth in the previous three months, according to figures from Eurostat, the European Union's statistical unit. For the whole of 2005, eurozone GDP grew by 1.3 per cent, compared with 3.5
per cent in the US. Many economists, however, believe eurozone prospects are the brightest they have been since early this decade and expect a clear rebound in the first quarter of 2006. The European
Central Bank is expected to raise its main interest rate by another quarter percentage point, to 2.5 per cent, next month.
Friday, February 17, 2006 ~ 8:41 a.m., Dan Mitchell Wrote: ...columnists and editorial writers...bemoan the "savings crisis." ...Since the purpose of saving is to add to wealth, the best measure of saving is
the addition to wealth. In the third quarter of last year, the Fed's measure of household net worth amounted to $51.1 trillion -- up by more than $5 trillion from a year earlier. Net worth measures assets
minus debts, so that 10.9 percent wealth gain also debunks any "debt crisis." Homeowners' equity accounted for only 21 percent of total
wealth, so it was not just a housing boom. ...First of all, savings is defined as income less consumption. Because such investments as home remodeling and college tuition are miscounted as consumption, they
reduce the savings rate. Making a big down payment on an existing house lowers the savings rate, as does paying cash for a new car. Yet homes and cars are assets. Second, corporate saving is also personal
savings because stockholders own the corporations. When corporate profits are retained and reinvested, that increases assets per share and
results in greater capital gains for 401(k) plans. Undistributed corporate profits accounted for more than 72 percent of total net private savings
in 2004, when total private savings hit a record high despite a drop in so-called "personal saving." Third, an increase in the value of old
savings accomplishes the same thing as new savings -- it increases net worth. Yet capital gains are not counted as income or savings, so they are excluded from both the numerator and denominator of the savings
rate. ...Last year's below-zero savings rate was: 1) partly a statistical illusion due to counting investments as consumption and ignoring corporate savings; 2) partly a sensible way to spread out the financial
pain of surging energy prices; and 3) partly a rational response to the $5 trillion gain in household wealth. I am not opposed to more saving, or to
virtue in general. But last year's low personal savings rate was no "crisis."
Friday, February 17, 2006 ~ 8:04 a.m., Dan Mitchell Wrote: Growing and harvesting the corn, and heating and reheating the fermented corn to produce ethanol of a high enough quality to replace
some of the gasoline in your car requires an enormous amount of energy. How much? A recent careful study by Cornell University's David Pimentel and the University of California at Berkeley's Tad Patzek
added up all the energy consumption that goes into ethanol production. ...Putting it all together, they found that it takes 29 percent more energy
to make ethanol from corn than is contained in the ethanol itself. It's not that corn is a bad source for ethanol. The other sources mentioned by the president look even worse. Wood biomass takes 57 percent more
energy to produce than it contains. Switch grass takes about 50 percent more. Ethanol is just a highly uneconomical product. ...no matter how
expensive fossil fuels become, ethanol will never be economical because it takes so much fossil fuel to produce. It might be possible that someday
technological processes will emerge that make production of ethanol less reliant on fossil fuels, but the billions in subsidies to this point have
left us with a process that is still a disgrace and an absurd waste of energy and taxpayers' money. ...The arguments against ethanol are so persuasive you have to ask yourself: Why does Congress keep throwing
money at it? The answer appears to be that elected officials from corn- growing states such as Iowa and Illinois see it as a cash cow for their
constituents. The ethanol business is a pretty good source of cash for the lawmakers too. The political action committee of Archer Daniels Midland Co., the world's largest producer of corn-based ethanol fuel,
gave $69,000 to federal candidates for the 2004 elections, according to the Center for Responsive Politics. In 2002, before such unlimited "soft
money" donations were outlawed, ADM gave $1.8 million to political parties. Its political action committee gave close to $200,000 to individual campaigns and committees.
Thursday, February 16, 2006 ~ 2:17 p.m., Sven Larson Wrote: China needs to boost spending on health and education and to allocate public funds more effectively, according to a new OECD report aimed
at helping the Chinese government in its drive to modernise the economy while meeting its social objectives. At the heart of the new study is a call for a reform of relations between central and regional
government over taxation and expenditure. "Challenges for China's Public Spending: Towards Greater Effectiveness and Equity" finds that
public spending on health and education may be too low and inefficient to meet China's development needs. Official spending in these areas, along with culture and science, amounted to the equivalent of 5.5% of
GDP in 2002 compared with an average of 28.2% for OECD countries. Local authorities, responsible for funding health, education and social programmes in China, are often insufficiently resourced and hampered
by limited autonomy. The way funds are transferred from the central government is inefficient, the report says. To make up for funding gaps, local governments have resorted to a range of unofficial levies and
charges. The recourse to debt by local government is also widespread despite the fact that under Chinese law it is illegal for these authorities
to borrow or issue bonds. Although official government spending overall has grown rapidly in China - from 17.7% of GDP in 1995 to 27.4% of
GDP in 2003 - it is still well below the OECD average of 44.5%.
Thursday, February 16, 2006 ~ 2:03 p.m., Yesim Yilmaz Wrote: The competition among cantons to entice rich people and international companies with the lure of low taxes has heated up. On January 1 this
year Obwalden introduced the lowest corporate rates in the country. A recent survey showed that 18 of the 26 cantons intend to lower their taxes this year. However, canton Zurich has accused others of
freeloading on their amenities and officials have agreed to set up a working group to review taxation guidelines. Part of the debate centres around Obwalden's decision to also introduce a degressive (or
regressive) income tax system that reduces rates as income rises. Obwalden reduced taxes for all residents, but especially for those earning over SFr300,000 ($233,000) a year. The centre-left Social
Democrat Party initially raised an objection, but the baton has been taken up by communist parliamentarian Josef Zisyadis, who moved from Lausanne to Obwalden to oppose the tax changes. Zisyadis, along with
three other Obwalden residents, has lodged an appeal with the Swiss Federal Court on the matter. If the Federal Court decides there is a case to answer, it will set a legal precedent, according to tax experts.
Thursday, February 16, 2006 ~ 8:41 a.m., Dan Mitchell Wrote: ...wage growth rates in countries with more flexible and less corporatist models of the labor markets were consistently higher than in the
"partnership"-styled Eurozone countries. In fact the US - the economy that is commonly cited throughout the old Europe as an example of
"race-to-the-bottom" capitalism - saw higher wage growth in business sector than both the Euro zone and the average flexible-wage economy.
This month a study by US and European researchers showed that since 1976, the wage and benefits returns to long-term employees in France
were consistently lower than in the US. The authors conclude that "in a low-mobility country such as France, there is little gain in compensating
workers for long tenures because they tend to stay in the firm for most... of their career. In contrast, [in] a high-mobility country such as the
United States... firms are induced to pay the premium... to avoid losing their most productive workers." In fact, the long-term workers in
France tend to earn 3.05 times less per each extra year they stay with the firm than their American counterparts. IZA-Berlin and Stockholm Institute reported similar trends for Sweden and Germany. ...This stated
objective of the European corporatist model is not supported by the hard evidence. In fact, the cumulative wage growth in the US since 1996 was 55.7 percent - a full 24.6 percent higher than labor productivity
gains alone, making US workers the greatest beneficiaries of total productivity growth. For the Eurozone, the cumulative wage growth was just 24.2 percent as opposed to 44.6 percent in the group of flexible
labor market economies.
Thursday, February 16, 2006 ~ 7:49 a.m., Dan Mitchell Wrote: Europe's population will be slightly smaller, and significantly older, in 2050. ...the workingage population (15 to 64) is projected to fall by 48
million (or 16%) by 2050. In contrast, the elderly population aged 65+ will rise sharply, by 58 million (or 77%) by 2050. The old-age dependency ratio, that is the number of people aged 65 years and above
relative to those between 15 and 64, is projected to double, reaching 51% in 2050. Europe will go from having four people of working age for every elderly citizen currently to a ratio of two to one by 2050.
...potential GDP growth is projected to decline in the decades to come. For the EU15, the annual average potential GDP growth rate will fall from 2.2% in the period 2004-2010 to 1.8 % in the period 2011-2030
and to 1.3% between 2031 and 2050. ...Overall, ageing populations is projected to lead to increases in public spending in most Member States by 2050 on the basis of current policies...for the EU15 and the Euro
area as a whole, public spending is projected to increase by about 4 percentage points between 2004 and 2050.
Wednesday, February 15, 2006 ~ 8:58 a.m., Dan Mitchell Wrote: Mr. Baker is normally a free-market advocate who has been brave enough to challenge the bad practices of such politically powerful
institutions as Fannie Mae and the New York Stock Exchange. So it's surprising that he is now proposing a new Fannie Mae-type entity called the Louisiana Recovery Corporation (LRC). Under the Baker plan, as
many as 200,000 properties would be purchased by the LRC. Current homeowners in these areas would receive 60% of the "pre-Katrina value" of the house, and banks would receive 60% of the unpaid
mortgage. Uncle Sam would clean up debris, rebuild homes and whole neighborhoods, then put the refurbished properties up for sale. Mr. Baker tells us he expects revenues from these sales would recoup some
of the costs. ...In a single stroke, the Baker plan would make the U.S. government the largest property owner/real estate agent in New Orleans. And property development is not the federal government's
strong suit, to say the least (think HUD and Cabrini-Green in Chicago). By paying out at pre-Katrina values, the feds would also deter private investors from going in and buying up properties and thus creating a
new market floor. Who knows what prices should be if Uncle Sam is setting them at what might be inflated pre-Katrina values?
Wednesday, February 15, 2006 ~ 8:28 a.m., Dan Mitchell Wrote: Indianapolis Mayor Bart Peterson wants to dispel "inaccuracies and stereotypes" about the use of eminent domain for economic
development, a practice the U.S. Supreme Court upheld in last year's notorious Kelo v. New London decision. Last fall Peterson told a Senate subcommittee that when the government threatens to condemn people's
property because it thinks someone else can make better use of it, "a majority of the time, most people agree to sell." Interesting. Given the
choice between selling and fighting an expensive legal battle they will almost certainly lose, after which they will have to give up their land
anyway, probably on less advantageous terms, most people "agree" to sell. "Cities use eminent domain most often as a negotiating tool with
property owners," explained Peterson, who was speaking for the National League of Cities. "Just having the tool available makes it
possible to negotiate with landowners." Sure it does -- in the same way just having a gun available makes it possible for a bank robber to negotiate with a teller.
Wednesday, February 15, 2006 ~ 8:14 a.m., Sven Larson Wrote: The paper shows that spending on health and long-term care is a first-order policy issue. Between now and 2050, public spending on
health and long-term care could almost double as a share of GDP in the average OECD country in the absence of policy action to break with past trends in this area. And that estimate takes into account that as
people live longer, they also remain in good health for longer. Even with containment measures, public spending on health and long-term care could rise from the current average level of 6-7 % of GDP to around
10% by 2050. In some countries, the increase could be dramatic.
Tuesday, February 14, 2006 ~ 10:48 a.m., Sven Larson Wrote: From the analysis of composite public sector performance (PSP) and efficiency (PSE) scores we find that countries with lean public sectors
and public expenditure ratios not far from 30% of GDP tend to be most efficient. PSE scores of the most efficient countries are more than twice
as high as those of the poorest performers. From the DEA results we see that a small set of countries define, or are very close to, the theoretical
production possibility frontier: Singapore, Thailand, Cyprus, Korea, and Ireland. From an input perspective the highest ranking country uses 1/3
of the inputs as the bottom ranking one to attain a certain public sector performance score. The average input scores suggest that countries
could use around 45 per cent less resources to attain the same outcomes if they were fully efficient. Average output scores suggest that countries
are only delivering around 2/3 of the output they could deliver if they were on the efficiency frontier.
Tuesday, February 14, 2006 ~ 8:54 a.m., Dan Mitchell Wrote: The case of the state monopoly, EDF (Electricité de France) is instructive, and explains why any reform is so politically difficult.
Employees of this vast organization work 32 hours per week; their meals are subsidized to the tune of 50%, their electricity and gas bills by
90%; they can retire at 55; they have the right to holidays at a fifth of their market value, and on average work the equivalent of eight months
per year; and when their mother-in-law dies, they can take three days' paid leave to celebrate. These are not all their privileges, only some; so it is hardly surprising that when the government proposed the
privatization of EDF, they went on strike. (The government caved in.) They did so in the name of "the defense of public service" -- and the
French call the Anglo-Saxons hypocrites! When a certain critical mass of such subsidy and special privilege for important sectors of the economy is reached, reform becomes impossible without explosion. The
government has created an economic monster that it cannot tame, and that is now its master. ...there is an underlying anxiety (the French take more tranquillizers than any other nation).
Tuesday, February 14, 2006 ~ 8:34 a.m., Yesim Yilmaz Wrote: Fears over a massive influx of workers from countries, such as Poland or the Czech Republic, when the EU expanded in May 2004 saw 12 of
15 member states impose restrictions. But, as Spidla points out, migration from new to old Europe has not proved a zero-sum game of more workers chasing the same amount of jobs. "We can not consider
labour markets as a static concept - a fixed number of jobs," Spidla argued. "If new workers are employed productively, migration leads to
the creation of new jobs. This has manifested itself in the UK and Ireland." In relative terms, the UK with 292,000 new workers, Ireland with 160,000 and Sweden with 80000, did not see unmanageable
numbers. "Those countries that did not impose quotas did not see large numbers and migration was generally positive," the commissioner said.
"We have not seen a catastrophe in member states... The fears are very often disproportionate and do not reflect reality."
Tuesday, February 14, 2006 ~ 7:11 a.m., Sven Larson Wrote: Productivity growth in Canada is falling behind that of other industrialized nations and our relative standard of living is also falling
as a result. Worse still, the policies enacted to increase productivity over the last number of years have been misguided or have simply not gone
far enough. The purpose of this study is to highlight the impending productivity crisis in Canada and to offer recommendations that will place Canada on the path to greater productivity.
Monday, February 13, 2006 ~ 10:53 a.m., Yesim Yilmaz Wrote: "For Switzerland, tax competition is not only a theoretical concept. It represents one of the constitutive elements of our system of state and self-understanding," Merz said on Friday. "Competition ensures diversity and quality of supply, innovative entrepreneurship, and low prices for consumers. This forces the policies and administration of competing locations to offer an attractive combination of public services and a tax burden that is as low as possible." Merz said he recognized criticisms of Swiss business tax havens, but dismissed the concept of harmonizing Switzerland's tax system with other countries. "Tax competition is sometimes claimed to trigger a cut-throat tax cutting spiral, which may lead to a creeping deterioration of services in the public sector," he said. "Efforts therefore exist to harmonize taxes internationally and to limit tax competition. Such a conclusion defies logic - it has not been proven. "The realpolitik alternative to tax competition is a tax cartel. Cartels, however, are seldom advantageous for the citizen." Merz added that the ability to attract business by setting low tax rates is essential if Switzerland is to compete with the larger economies of neighboring countries. "It is therefore not surprising that small countries distinguish themselves through aggressive strategies in tax competition," he said. "Where their systems are fair, efficient and democratic, there can be no talk of harmful competition." http://www.swissinfo.org/sen/swissinfo.html?siteSect=107&sid=6181516:
Monday, February 13, 2006 ~ 10:11 a.m., Sven Larson Wrote: In 2004, tax revenue (i.e. the total amount of taxes and social contributions) in the EU25 stood at 40.7% of GDP, compared with
40.9% in 2003. After increasing from 41.2% in 1995 to 42.4% in 1999, the tax-to-GDP ratio then declined steadily to 40.8% in 2002. The trend in the euro-zone was similar: tax revenue rose from 41.6% of GDP in
1995 to 43.0% in 1999, then fell to 41.1% in 2004. These figures come from a publication issued by Eurostat, the Statistical Office of the European Communities. This report gives additional information on the
evolution of tax revenue in the EU and the Member States between 1995 and 2004, and on the breakdown of tax revenue across Member States by main tax category. Tax revenue ranged from 29% of GDP in
Lithuania and Latvia to 51% in Sweden. Among the Member States there were substantial differences in the tax-to-GDP ratio. In 2004 Sweden (51.2%) recorded the highest ratio, followed by Denmark
(49.9%), Belgium (47.4%), France (45.3%), Finland (44.5%) and Austria (44.3%). The lowest ratios were observed in Lithuania (28.7%), Latvia (29.1%), Slovakia (30.6%),Ireland (31.7%), Estonia (32.7%) and
Cyprus (33.7%). In 2004, as compared with 2003, tax revenue as a proportion of GDP rose in fourteen Member States, fell in ten and remained stable in Sweden. The highest increases in the tax-to-GDP
ratio were recorded in Malta (from 34.5% in 2003 to 36.7% in 2004), Ireland (from 30.4% to 31.7%) and Denmark (from 48.7% to 49.9%). The largest reductions were observed in Greece (from 39.0% to 37.7%),
Germany (from 41.0% to 40.0%) and Italy (from 43.0% to 42.1%).
Monday, February 13, 2006 ~ 8:35 a.m., Dan Mitchell Wrote: America's trade deficit -- in December reaching a near-record $64.7 billion -- is unfortunate, right? Wrong. Contrary to popular opinion, this
so-called "deficit" is a blessing. ...When foreigners sell things to Americans they earn dollars. If foreigners then spend all of those dollars
on American exports, trade is "balanced." There's no trade deficit or surplus. But if foreigners instead invest some of those dollars in
dollar-denominated assets -- say, by purchasing that factory in Utah, houses in Hawaii, or shares of Google -- they obviously must buy fewer American exports. So the trade deficit grows as investment in the U.S.
rises. Although dollars spent by foreigners on investments are not spent on items classified as U.S. exports, these dollars nevertheless are spent in the U.S. They raise the value of American corporations and
real-estate, and improve American workers' productivity. In turn, those increases in asset values and productivity enhance Americans' current
ability to buy goods and services -- perhaps the same goods and services that foreigners would have bought had they not invested their dollars here. ...Because savings and investment are indeed so beneficial, we
should welcome rather than regret foreign savings invested in our country. If we applaud the guy across the street who forgoes that vacation in Las Vegas in order to save and invest more in the U.S.
economy, we should applaud also the guy across the ocean who does the same.
Sunday, February 12, 2006 ~ 10:39 a.m., Dan Mitchell Wrote: The way our Constitution's framers used the term, a right is something that exists simultaneously among people and imposes no obligation on
another. For example, the right to free speech, or freedom to travel, is something we all simultaneously possess. My right to free speech or freedom to travel imposes no obligation upon another except that of
non-interference. In other words, my exercising my right to speech or travel requires absolutely nothing from you and in no way diminishes
any of your rights. Contrast that vision of a right to so-called rights to medical care, food or decent housing, independent of whether a person
can pay. Those are not rights in the sense that free speech and freedom of travel are rights. If it is said that a person has rights to medical care,
food and housing, and has no means of paying, how does he enjoy them? There's no Santa Claus or Tooth Fairy who provides them. ...The only way Congress can give one American something is to first, through
the use of intimidation, threats and coercion, take it from another American. So-called rights to medical care, food and decent housing impose an obligation on some other American who, through the tax
code, must be denied his right to his earnings. ...Three-fifths to two-thirds of the federal budget consists of taking property from one American and giving it to another. Were a private person to do the same
thing, we'd call it theft. When government does it, we euphemistically call it income redistribution, but that's exactly what thieves do --
redistribute income. Income redistribution not only betrays the founders' vision, it's a sin in the eyes of God. I'm guessing that when God gave
Moses the Eighth Commandment, "Thou shalt not steal," I'm sure he didn't mean "thou shalt not steal unless there was a majority vote in Congress."
Sunday, February 12, 2006 ~ 9:23 a.m., Sven Larson Wrote: Aaland, a small semi-autonomous Finnish island, has threatened to leave the EU unless Brussels allows its case on the tax-free sale of snuff
to be heard at the European Court of Justice. The commission has asked that the European Court of Justice (ECJ) declares Finland in breach of EU regulations for letting Aaland uphold sales of a kind of tobacco -
forbidden in the EU - on ferries to and from the island. Meeting with communication commissioner Margot Wallstrom on Monday (6 February), Britt Lundberg of Aaland's government argued that if the
island is not allowed to plead its own case before the ECJ, public opinion in Aaland about the EU will turn negative. In the long run, Aalanders, who this year have seen a number of bans from Brussels,
such as a recent hunting ban, may consider leaving the EU.
Saturday, February 11, 2006 ~ 11:19 a.m., Dan Mitchell Wrote: Montana Senator Max Baucus -- the ranking Democrat on the Finance Committee -- invoked an obscure budget rule this week in hopes of
tripping up the proposed two-year extension of the 2003 investment tax cuts. ...Mr. Baucus's ploy is based on estimates by the Joint Tax Committee that the lower rates will "cost" the Treasury some $30
billion in revenue after 2009. In the real world, as opposed to Congress, we already know those lower rates have more or less paid for themselves thanks to a rising stock market and stock turnover. The
latest Congressional Budget Office report says that the revenues from capital gains and dividends are up by more than 30% over the past 30 months. Total tax receipts also increased by $124 billion more than the
Joint Tax whiz kids predicted. But now the same estimators who guessed wrong about 2003, 2004 and 2005 are being cited by Mr. Baucus as the reason that the feds will lose revenue after 2009. Congress would be
better off relying on forecasts from Larry, Curly and Moe.
Friday, February 10, 2006 ~ 4:09 p.m., Andrew Quinlan Wrote: The OECD used to focus on gathering statistics and publishing innocuous studies. Although it is doubtful that these activities were ever
a particularly good use of American tax dollars, the OECD's more recent pursuit of policies that undermine America's competitiveness is deeply troubling. ...The Paris-based bureaucracy has also pursued an
anti-tax competition agenda that would hinder the flow of jobs and capital to the U.S. economy. ...American taxpayers should not be subsidizing a bureaucracy that is actively pushing anti-market and
anti-American policies.
Friday, February 10, 2006 ~ 7:57 a.m., Dan Mitchell Wrote: Thousands of union workers and politicians marched in France and Germany yesterday against any and all attempts to tweak their rigid
labor rules. What a perfect demonstration that eurosclerosis, that ugly word from three decades ago, is back. The growth trends in the Europe's
three largest economies should put all doubt to rest. GDP per capita in Germany, France and Italy is falling, relative to the U.S., to levels below
those recorded in the 1970s. ..."At current trends, with demographics the way they are, the average U.S. citizen will be twice as rich as a
Frenchman or a German in 20 years," Jean-Philippe Cotis, chief economist at the OECD, told us.
Friday, February 10, 2006 ~ 7:36 a.m., Dan Mitchell Wrote: The Rhode Island legislature is considering a flat tax, and the proposal comes from its majority Democrats. That's right, last week Ocean State
Democratic leaders proposed an optional flat rate income tax of 5.5% as an alternative to the current "progressive" tax schedule, which imposes rates ranging from 3.75% to 9.9% for the highest earners.
...listen to how House Speaker William Murphy pitched the idea at a news conference: "The ultimate goal is...making Rhode Island a more
attractive place for business that will provide high-paying jobs for more Rhode Islanders." What's going on here? ...The answer is tax competition, and the discovery that Rhode Island's high tax burden is
damaging its economy. Just as the countries of the former Soviet bloc have passed flat taxes to make themselves more competitive, Rhode Island politicians are hoping the idea can help them stop their most
talented workers and growth industries from going elsewhere. ...The Democrats noted in their press release that Rhode Island's current top marginal income tax rate of 9.9% is among the highest of the 41 states
with broad-based income taxes. They also cited a study that showed this high marginal rate "might be having an effect on the retention of wealth
in Rhode Island by causing retirees and companies to move to states with lower taxes, and causing large companies with multiple locations to
put their highest earners somewhere other than Rhode Island." That "somewhere" else is often just up the road in Massachusetts, which has
a 5.3% flat tax. One reason the Bay State, once known as Taxachusetts, cut its tax rate was to be able to compete with nearby New Hampshire, which still has no income tax at all. Bay Staters were moving to
southern New Hampshire in droves, taking their tax dollars and high-tech know-how with them.
Thursday, February 9, 2006 ~ 4:43 p.m., Sven Larson Wrote: The Austrian presidency of the European Union and Poland have resolved the dispute over the bloc's sales tax deal, with stakeholders
relieved the reduced VAT rates on construction works and some local services are safe until 2010. "It's a victory for Europe," commented
Austrian finance minister Karl-Heinz Grasser, after the talks with his Polish counterpart Zyta Gilowska and EU tax commissioner Laszlo Kovacs in Vienna on Wednesday (1 February).
Thursday, February 9, 2006 ~ 3:53 p.m., Andrew Quinlan Wrote: The preliminary judgment by a World Trade Organization panel concluded that the European Union had an effective ban on biotech
foods in place for six years from 1998, said the officials, who spoke on condition of anonymity because it was a confidential report. ...The report sided with a legal complaint brought by the United States,
Canada and Argentina over an EU moratorium on approval of new biotech foods, the officials said. The panel ruled that individual bans in six EU member states -- Austria, France, Germany, Greece, Italy and
Luxembourg -- were against international trade rules.
Thursday, February 9, 2006 ~ 8:45 a.m., Dan Mitchell Wrote: Science and math advocates have been harrumphing about national competitiveness for at least a quarter-century. In the early 1980s the
National Science Foundation predicted "looming shortfalls" of scientists and engineers, and the National Commission on Excellence in Education
declared, "If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we
might well have viewed it as an act of war." But the American economy went from strength to strength over the next decades, while supposedly
more technical countries such as Japan and Germany foundered. ...The science lobby should also stop pretending that countries compete the same way companies do. Firms such as Toyota and Ford really do go
head-to-head against each other; if Toyota has superior technology, it will steal Ford's customers -- and Ford may even disappear. But if China
produces Nobel-quality science, it won't put the United States out of business; rather, Chinese discoveries will help American scientists
discover more, too. ...In short, the "China threat" argument ignores the ways that competition between countries, unlike companies, is a
positive-sum game. ...In the race to turn scientific ideas into businesses, the United States is hard to beat.
Wednesday, February 8, 2006 ~ 8:41 a.m., Dan Mitchell Wrote: ...when Swiss authorities acceded to pressure from the European Union to discourage tax evasion, the door opened for a new challenger to woo
the world's wealthy: Singapore. The tiny Asian nation has beefed up account secrecy protections, has changed trust laws and has begun allowing foreigners who meet minimum wealth requirements to
purchase land and become residents. Now private-banking money is flooding in from...Europeans moving money from Switzerland for tax purposes. ...The money flow demonstrates how one nation, in the
borderless world of international banking, can use banking regulation as an economic development tool -- and how complicated it is for tax authorities around the world to plug revenue leaks. ...Under pressure
from the EU to crack down on tax evasion, Switzerland imposed a withholding tax last July on some accounts held by EU citizens. "Singapore is one way of getting around the withholding tax," said
Raymond J. Baer, chairman of Zurich private bank Julius Baer Holding Ltd... Singapore's private-banking expansion is part of a broad effort to
diversify its economy... Switzerland's private-banking industry, currently home to about 30% of offshore assets globally, was a model. Banking
confidentiality has been a feature of Swiss law since 1934. ...In 2001, Singapore stiffened laws against breaching the confidentiality of bank customers, making penalties for violators even tougher than in
Switzerland. It imposed fines of $78,000, imprisonment for as long as three years, or both. In Switzerland, a similar breach could result in a
prison term of six months or a fine of about $38,600. ...Swiss bankers say the withholding tax and the continuing push to further restrict client
confidentiality are discouraging wealthy Europeans from keeping money in Switzerland. Singapore isn't a member of either the EU or the OECD, so it hasn't faced the same pressure. By keeping money in Singapore,
Europeans can avoid the new tax, some bankers say.
Wednesday, February 8, 2006 ~ 8:23 a.m., Yesim Yilmaz Wrote: Seven of the top 10 award winners at the 2004 Intel Science Talent Search were immigrants or their children. (In 2003, three of the top four
awardees were foreign born. In fact, in the 2004 Intel Science Talent Search, more children (18) have parents who entered the country on
H-1B (professional) visas than parents born in the United States (16). To place this finding in perspective, note that new H-1B visa holders each
year represent less than 0.04 percent of the U.S. population illustrating the substantial gain in human capital that the United States receives
from the entry of these individuals and their offspring. At a time when U.S. leadership in science and technology is threatened, these findings provide evidence that maintaining an open policy toward skilled
professionals, international students, and legal immigration is vital to U.S. technological and scientific standing in the world. … Today, more than 50 percent of the engineers with Ph.D.s working in the United
States are foreign-born, according to the National Science Foundation. In addition, 45 percent of math and computer scientists with Ph.D.s, as
well as life scientists and physicists, are foreign-born. Among master's degree recipients working today, 29.4 percent of engineers, 37 percent of math and computer scientists, and 25 percent of physicists are
foreign-born. These data help illuminate the significant role immigrant scientists and engineers play in the United States.
Tuesday, February 7, 2006 ~ 11:23 a.m., Sven Larson Wrote: German unemployment has again passed the 5 million mark. New figures released from the Federal Labour Office showed 5,012 million
were without a job in January (12.1%), compared to 4,605 million in December (11,1%)… "The shock is deep – because nobody had expected to see more than five million out of work again," reported Spiegel
Online… The new hike in employment rates was mainly explained by the cold weather in January slowing seasonal work such as construction… Some 30,000 of the recent people out of work were older people
registering as unemployed before a change in rules is to reduce the period over which full benefits can be gained from 32 to 18 weeks… The January figures came close to the previous unemployment record in
Germany from last February, when 5,217 million people were jobless (12.6%).
Tuesday, February 7, 2006 ~ 8:37 a.m., Dan Mitchell Wrote: ...the U.S. is approaching a tipping point where the reforms needed to preserve an innovative, market-based health system may become
politically impossible. That's because almost half of our health-care dollars are already spent by government. Do nothing and the inevitable growth of Medicare alone will lead us far down the path toward
government-rationed health care a la Europe or Canada. Even the half of our national health-care spending that remains a "private" responsibility bears little resemblance to an efficient market. That's
because the vast majority of Americans with private insurance get it from their employers, a relic of World War II when companies adapted to wage and price controls by offering insurance as a benefit to attract
the best employees. ...Right now employers large enough to "self insure" can do so mostly as they see fit. But individuals and small businesses
who want to buy insurance are at the mercy of state regulators where they live or operate. In overregulated states like New York and New Jersey, residents can pay 10 times as much for insurance as they would
in neighboring states... Individually purchased insurance also isn't portable across state lines, contributing needless anxiety to normal life decisions like moving or switching jobs. The Founders put the
Commerce Clause in the Constitution precisely so Congress could act against internal restraints on trade such as today's 50-state insurance market. We hope Mr. Bush endorses and fights for the bill from
Representative John Shadegg of Arizona that would let individuals buy insurance from vendors in any state, no matter where they live.
Monday, February 6, 2006 ~ 2:19 p.m., Yesim Yilmaz Wrote: Both the British and French governments have been angered by Procter & Gamble, and its rival Colgate, relocating their European
headquarters to Geneva, and Biogen Idec, the US biotech group, moving from Paris to Zug. Experts estimate that foreign companies establishing holding company structures can lower their tax rates in
Switzerland to as low as 7 per cent, compared with 12.5 per cent in Ireland and an EU average of about 20 per cent.
Monday, February 6, 2006 ~ 8:43 a.m., Dan Mitchell Wrote: Since 1992 the European Union has set a minimum VAT rate of 15% for goods and services -- ostensibly to promote the smooth functioning of
the single market. Brussels says it's a "competitive distortion" if countries apply VAT rates that are much lower than in the rest of the
EU. Otherwise, shoppers in this now presumably borderless Europe might actually cross the border and -- brace yourself -- shop for better deals. ...If harmonizing VAT rates were really all about avoiding
"distortions," then no other method would be more effective in bringing those rates closer together than free VAT competition. But cash-strapped treasuries don't want to do that because they fear that
with free competition rates would converge at the lower end of spectrum. French Prime Minister Dominique de Villepin last week said the EU ought to be more cautious with future enlargement given how
difficult decision-making has become with so many members. But he's only shooting the messenger. Enlargement is a success. The problem is tax harmonization.
Monday, February 6, 2006 ~ 7:34 a.m., Dan Mitchell Wrote: We all remember last year's despicable U.S. Supreme Court 5-4 Kelo v. City of New London, Conn., decision that held as constitutional that the
rightful property of one American can be taken and transferred to another American... This kind of government tyranny should be disavowed by every decent American. Stepping up to the plate is Branch
Banking and Trust Company (BB&T), headquartered in Winston-Salem, N.C. BB&T is a full-service bank with 1,100 offices throughout the Southeast. On Jan. 25, BB&T announced that it will not lend to
commercial developers that plan to build condominiums, shopping malls and other private projects on land taken from private citizens by government entities using eminent domain. ...We all should applaud the
directors and officers of Branch Banking and Trust Company for their courage. While boards of directors have a duty to maximize shareholder
value, BB&T has shown that maximizing shareholder value is not solely a monetary phenomenon but has a moral component as well. As such they have chosen not to be accessories to last year's despicable U.S.
Supreme Court decision.
Sunday, February 5, 2006 ~ 1:20 p.m., Dan Mitchell Wrote: Bush's declaration that the U.S. is addicted to oil is another step toward demonizing the oil industry, in a repeat of what happened to the tobacco
industry in the 1990s. ...The word "addicted," of course, is morally loaded, implying an unhealthy and irrational dependence. But since oil
provides the cheapest and most efficient way to power automobiles, our dependence on it is natural and sensible - the very opposite of an
addiction. ...President Bush is resorting to microindustrial policy. A few billion dollars here and there on developing fuel alternatives - and also
on funding scientific research and education - and everyone can feel good that the federal government is "doing something," while members
of Congress shove the money out the door and energy interests gobble it up. Bush's new Advanced Energy Initiative, which is charged with developing better batteries for electric cars and figuring out how to
make fuel from wood chips, is redolent of all the past federal initiatives to find alternatives to oil and to gas-powered cars. Who can forget the glories of President Nixon's Project Independence? Or Carter's
Synthetic Fuels Corporation? Or the first Bush's U.S. Advanced Battery Consortium? Or Clinton's Partnership for New Generation Vehicles? ...If there are commercially viable energy alternatives, the market will
discover them without the clumsy guiding hand of government. Ethanol, the corn-based, government-subsidized fuel, has long been a favorite alternative, but still doesn't make economic sense. As many
industrial-policy programs do, the subsidies have become chiefly a favor to an important political constituency - midwest farmers, especially
those who vote in the Iowa caucuses. ...The best result would be if Bush's "oil addiction" tack heads into that special dustbin reserved for
grandiloquent, quickly forgotten State of the Union gestures. Here's hoping that a few years from now as many people remember that Bush wanted to power cars on wood chips as recall that he once planned to
put a man on Mars. President Bush has seen the energy future, and he has two words of advice: wood chips. Somewhere in his cardigan sweater next to a
fireplace, Jimmy Carter is smiling. That gets to the uncomfortable heart of Mr. Bush's startling turn on energy policy Tuesday night. An Administration that once promoted drilling in Alaska and other ways to
expand domestic oil and gas supplies is now lecturing the nation that it's "addicted to oil" and extolling the merits of cellulosic biomass, a k a
wood chips. This may not be as bad as 1970s-style price controls, but it's also a long way from a sensible energy policy. ...Mr. Bush's proposed
subsidies may be small, but he has started a political bidding war that will prove very costly before it's done. Every energy lobbyist with a K
Street address will be lining up for another tax or spending subsidy: synthetic fuels, biodiesel, wind farms and, the granddaddy of them all,
ethanol. That subsidy used to be limited to corn farmers, but Mr. Bush opened the door to make the fuel from cane sugar and switch grass. And
this for a fuel that has been heavily subsidized since the 1970s and still can't pull its own market weight.
Saturday, February 4, 2006 ~ 11:15 a.m., Dan Mitchell Wrote: The latest statistics on capital gains tax collections were recently released by the Congressional Budget Office, and receipts are not down
but way up. By 45% to be exact. As part of President Bush's 2003 investment tax cut package, the capital gains tax rate was reduced to 15% from 20%. Opponents predicted, as ever, that this would reduce
tax revenue. Not even close. Here's what actually happened. This 25% reduction in the tax penalty on stock and other asset sales triggered a
doubling of capital gains realizations, to $539 billion in 2005 from $269 billion in 2002. One influence was the increase in stock values over that
time, thanks in part to the higher after-tax return on capital induced by the tax cuts. ...It also yields a windfall for the Treasury. In 2002, the
year before the tax cut, capital gains tax liabilities were $49 billion at the 20% rate. They rose slightly to $51 billion in 2003, then surged to
$71 billion in 2004, and were estimated by CBO to have reached $80 billion last year -- all paid at the lower 15% rate. In short, the lower rate
yielded more revenue. ...None of this is good news for the Rubinomics crowd, who predicted deficit doom from the tax cuts. It's even worse news for the Joint Committee on Taxation, which tells Congress what
happens to tax revenues if tax rates change. A new report from the American Shareholders Association finds that Joint Tax had assured Congress in 2003 that the tax cut would reduce capital gains revenues
by $3 billion from 2003 through 2005, with even bigger losses in future years. Nope. According to the CBO data, actual revenues were $62 billion higher than Joint Tax predicted over this three-year period.
Saturday, February 4, 2006 ~ 8:43 a.m., Dan Mitchell Wrote: The second part was a laundry list, reminiscent of the worst of Bill Clinton. I was nodding off when I heard the President Bush say,
"America is addicted to oil." Addicted to oil! That woke me up. America is no more addicted to oil than it is addicted to bread, to milk, to paper,
to water, to computers or, in the immortal words of the late Robert Palmer, to love. ...Coming from President Bush, who spent most of his non-political adult career in the oil business -- Arbusto, Spectrum 7,
Harken -- the word "addicted" is baffling. If Americans are addicts, then, to follow the metaphor, Bush himself was a drug dealer, a pusher,
a kingpin. But maybe I should cut Bush a break. It's just rhetoric, right? In this case, no. The use of the word "addicted" is dangerous. It could
end up hiking prices by reducing supply. How? Bush has signaled a new attitude from the White House. If this president can't defend the working
of our almost-free market, then who will? If I were in the oil business myself, I would be extremely worried by this speech. One of my responses would be to hold back on planned research and development
and capital spending. ...The sad truth is that some of the big oil companies are themselves responsible for creating an environment where an oilman president can call the use of oil an addiction. In their
advertising, they talk high-mindedly about "alternatives" to fossil fuels, as if they were on a moral crusade to replace the nasty stuff they make
now. Why aren't they proud to say that, more and more efficiently, they are producing energy that makes people's lives better?
Friday, February 3, 2006 ~ 5:33 p.m., Dan Mitchell Wrote: The Slovak pension reform was launched on Jan. 1, 2005. Under the new system, Slovakia's 2.2 million workers received a choice: To remain
fully reliant on the current pay-as-you-go system or to invest part of their public pension contributions in a personal retirement account managed by one among a number of alternative investment funds. Total
public pension contributions in Slovakia amount to just under 29 percent of wages. Now, workers can place 9 percent into their personal retirement accounts. Another 9 percent is used to finance the existing
system's obligations and the balance is used to cover other types of insurance and administrative costs. So far, roughly 1.1 million people, or 50 percent of eligible workers, have opted for personal retirement
accounts, and another 300,000 to 400,000 people are expected to do so before the deadline expires on June 30. ...After just 2 years of a sustained reform effort, Slovakia's business environment was ranked
among the top 20 in the World Bank's "Doing Business in 2005" report. Cumulative foreign direct investment in Slovakia has risen six-fold since
Dzurinda's accession to power in 1998, much of it accruing to the export-oriented manufacturing sector, especially automakers. Those reforms improved the overall business environment, thus making private
saving more attractive to the populace.
Friday, February 3, 2006 ~ 5:02 a.m., Dan Mitchell Wrote: A woman by the name of Lynette Burrows, who is a kind of family values campaigner, took part in a BBC radio discussion panel about
Britain's new civil partnerships Act that allows gays to enjoy the same legal rights as married people. Burrows does not appear to be opposed to the Act, but the mother of six doesn't think gay men should be
allowed to adopt boys. She said that placing a boy with two homosexual men would offer the same risk as placing a little girl with two straight men who shared a house. Her comments were mild and not hostile to
homosexuals. A keen member of the public called the police and the police contacted Burrows saying "a homophobic incident" had been
reported against her. As recently as five or six years ago, the response of the police to such a caller would have been, "Well, it's a free country.
The lady can hold any views she likes and can say them to whoever she likes." Not any more. ...Next, we come to public enemies 73-year-old Joe
Roberts and his wife Helen, 68, who complained when they saw a table in their local council office displaying homosexual literature. Mr. and Mrs. Roberts were of the opinion that taxpayer-funded premises and
employees should not be used for promoting lifestyle issues and called to complain, as is their right. The council reacted negatively, whereupon the pair asked whether they could at least display some Christian
literature on the same table. Permission was refused on the grounds that it might give offence to the gay community. Mr. Roberts hit back with
along the lines of "Well, what if I'm offended by homosexuality?" The phone call ended and that should have been the end of the angry
exchange. ...The next day, two police officers came to call on the elderly couple and spent over an hour grilling them about the 10-minute phone
call. The officers told the pair that they were "walking on eggshells". The Robertses were left with the impression that repeating their request
to the council could lead to their being charged with a crime.
Thursday, February 2, 2006 ~ 2:34 p.m., Sven Larson Wrote: The most potent threats to life on earth - global warming, health pandemics, poverty and armed conflict - could be ended by moves that
would unlock $7 trillion - $7,000,000,000,000 (£3.9trn) - of previously untapped wealth, the United Nations claims today. The price? An admission that the nation-state is an old-fashioned concept that has no
role to play in a modern globalised world where financial markets have to be harnessed rather than simply condemned.
Wednesday, February 1, 2006 ~ 8:51 a.m., Dan Mitchell Wrote: The Russian government has announced its intention to continue lowering the nation's tax burden over the coming years, although
President Vladimir Putin has cautioned that tax cuts should only be attempted if inflation is kept in check. One of the main tax measures to
be worked on by the Kremlin is a cut in the 18% value-added tax rate to 13% by 2009, under a three-year development program approved by Prime Minister Mikhail Fradkov. ...According to Putin, the Russian tax
burden, at 34% to 35% of GDP, is lower than in most of Western Europe, where the average is about 40%. Government plans call for a further one percentage fall in taxation as a share of GDP. Since 2002,
the Putin administration has reduced or abolished a number of taxes, including turnover tax, payroll taxes, sales tax, and value added tax, which was recently cut to 18% from 20%.
Wednesday, February 1, 2006 ~ 8:15 a.m., Dan Mitchell Wrote: When Republicans from time to time try to reach out to blacks, they tend to do so ineptly, if not ridiculously. For reasons unknown, they seem to
want to appeal to black voters in the same ways that Democrats appeal to black voters, by adopting a liberal stance. Why would anyone who wants liberalism go for a Republican imitation when they can get the
real thing from Democrats? ...Back in 1997, when black Republican Congressman J.C. Watts denounced people like Jesse Jackson and then D.C. mayor Marion Barry as "race-hustling poverty pimps," House
Speaker Newt Gingrich took it upon himself to apologize to Jesse Jackson. To apologize for what another man said is to treat that man as if he were your child or your servant. Gingrich then added further insult
by inviting Jesse Jackson to join him in his box for the Clinton inauguration for his second term as president. ...Another conservative black Republican who had the rug pulled out from under him was
Michael Williams, when he was in charge of civil rights at the Department of Education. Mr. Williams ruled that setting aside scholarships exclusively for minority students was racial discrimination
in violation of civil rights laws. This courageous ruling was over-ruled in the first Bush administration, leaving Michael Williams with egg on his face. |
||||||||||
 |
||||||||||