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www.freedomandprosperity.org |
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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 Cato Institute, respectively. |
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The Market Center Blog |
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Observations and insights on the global fight |
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CF&P's Market Center Blog Archives |
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Sunday, September 30, 2007 ~ 11:07 a.m., Dan Mitchell Wrote: Europeans should learn more foreign languages and not think that a "lingua franca" - one language used internationally - is enough, EU commissioner for
multilingualism Leonard Orban said on Wednesday. What's next, a Commissioner for Watching Paint Dry? A Commissioner for Shoelace Regulation?
Saturday, September 29, 2007 ~ 4:11 p.m., Dan Mitchell Wrote: The boy tossed out of school Monday for having a comb that looks like a switchblade knife has had his sentence reduced. West High School
freshman Nathaniel Bordeleau's suspension was dropped from 10 days to four, and he will be allowed back in school Monday, according to his mother, Heidi. ...Several years ago, said Burkush, a student was
removed from the system for bringing a squirt gun to school that looked remarkably like a pistol. "It was very scary to the school staff,"
she said, "and that child was brought through the whole expulsion process."
Friday, September 28, 2007 ~ 1:32 p.m., Dan Mitchell Wrote: Thanks to regulatory reforms, Eastern Europe and Central Asia have surpassed East Asia for ease of doing business, a World Bank report
says. The report, called "Doing Business" compares and ranks 178 economies and seven regions on the basis of ten indicators related to
business regulations. ...Several of the region's countries have also overtaken some Western European economies. Estonia and Georgia for instance, the region's two top performers, have surpassed most EU
members and both hold a spot in the top twenty
Friday, September 28, 2007 ~ 12:11 p.m., Dan Mitchell Wrote: Tax professionals in Europe's biggest businesses are heavily in favor of European Commission proposals for a harmonized, pan European
corporate tax system, a new study from KPMG International has found. ...The plans propose that the profits of businesses operating in more than one EU member state should be calculated according to a
single EU-wide formula, rather than the 27 different formulae used today. Profits would then be reallocated to the countries in which the
businesses are active, to be taxed at those countries' tax rates. The idea was supported by 78 percent of respondents across Europe. ...Among the large economies, the U.K, was most skeptical, with 62 percent in
favor and 32 percent against. Only Ireland and Slovakia registered majorities against the proposal... The Commission has stressed that it is not proposing a single European corporate tax rate. But 69 percent of
respondents said that in addition to the common corporate tax base they would like to see a single rate for the whole of Europe. Only the U.K., Cyprus, Ireland, Poland and Switzerland recorded majorities
against a single rate. Denmark was evenly split for and against, but in all other countries there was strong support for the idea.
Thursday, September 27, 2007 ~ 12:30 p.m., Dan Mitchell Wrote: Since 1994, Estonia's flax tax rate has decreased steadily from an original 26% to its current 22%. It applies to all personal and corporate
income with no deductions. ...Nearby nations soon began getting their feet wet. First, Latvia and Lithuania, both at rates of about 25%. Then Russia in 2001 enacted a flat tax on personal income at 13%; revenues
doubled there in less than three years. Serbia followed in 2003 with a 14% flat rate. Ukraine set its flat tax at 13% in 2004. Slovakia activated its 19% flat rate the same year. Romania's flat tax was
pegged at 16% in 2005. Georgia outdid them all, passing a 12% flat tax into law on an overwhelming parliamentary vote just before Christmas 2004. Macedonia's flat tax rate, inaugurated this year, is also 12%.
Global legal expert David Storobin considers the flat tax the mark of a New Europe. "Tax reforms in Eastern Europe are having a tremendous effect on Western European economies, as companies are bound to
move to neighboring states to avoid paying the near-confiscatory taxation (especially when you combine the income tax with corporate, capital gains and dividend taxes) levied in the 'Old Europe' to support
the Welfare State system," Storobin wrote... It is in the midst of this revolutionary fervor that Albania and Bulgaria will give the go-ahead
to a 10% flat tax next year while the Czech Republic will begin enjoying a flat rate of 15% in 2008. Then there's the small nation of Montenegro,
which actually plans a 9% flat tax in 2010. ...The results of the flat tax have been astounding. A former economic backwater like Slovakia has
seen skyrocketing job growth, a 9% GDP rate last year, the unearthing of its underground economy, and billions in investment from the likes of Hyundai and Sony.
Thursday, September 27, 2007 ~ 11:51 a.m., Dan Mitchell Wrote: That's the root of our problem. No one wants to pay for his own medical care. "Let the insurance company pay for it." But if companies
pay, they will demand a say in what treatment is -- and is not -- permitted. Who can blame them? And who can blame people for feeling frustrated that they aren't in control of their medical care? Maybe we
need to rethink how we pay for less-than-catastrophic illnesses so people can regain control. The system creates perverse incentives for everyone. Government mandates are good at doing things like that.
Steering people to buy lots of health insurance is bad policy. Insurance is a necessary evil. We need it to protect us from the big risks -- things
most of us can't afford to pay for, like a serious illness, a major car accident or a house fire. But insurance is a lousy way to pay for things.
Your premiums go not just to pay for medical care but also for fraud, paperwork and insurance-company employee salaries. This is bad for you and bad for doctors. ...Imagine if your car insurance covered oil
changes and gasoline. You wouldn't care how much gas you used, and you wouldn't care what it cost. Mechanics would sell you $100 oil changes. Prices would skyrocket. That's how it works in health care.
...In the end, we all pay more because no one seems to pay anything. It's why health insurance is not a good idea for anything but serious illnesses and accidents that could bankrupt you. For the rest, we should
pay out of our savings.
Wednesday, September 26, 2007 ~ 4:29 p.m., Eugene Slaven Wrote: The financial services industry is pushing Ontario election candidates for a clear growth strategy, saying the sector's standing as one of the
province's biggest economic drivers is being hurt by high taxes and a "talent crisis" fuelled by global competition for jobs... a letter to
candidates...stresses that while Toronto is currently the third-largest financial centre in North America, behind New York and Chicago, "it is
not immune to competitive pressures from around the world."…That concern is echoed by the Canadian Bankers Association's top executive. Nancy Hughes Anthony has urged both Liberal Premier Dalton
McGuinty and Conservative leader John Tory to make Ontario a more "investment-friendly" tax environment…She says Toronto risks losing
its standing as the continent's third-largest finance hub unless Ontario reduces the disproportionate tax burden borne by banks. She wants an immediate elimination of capital taxes and a reduction of Ontario's
corporate income tax rate to 10 per cent, from 14 per cent…There is some concern that industry jobs could eventually migrate to other lower-tax jurisdictions, particularly Alberta, Ecker said in an interview.
She pointed to the "401 run" phenomenon that impacted Quebec in the 1970s, when major corporations, including two major banks, relocated
head offices to Toronto from Montreal during the rise of the Parti Québécois… PC leader Tory said he's "very worried" that high taxes have eroded Ontario's competitiveness.
Wednesday, September 26, 2007 ~ 3:58 p.m., Dan Mitchell Wrote: The US National Retail Federation and nearly 100 retailers and trade associations are urging Congress to approve legislation making it
easier to require internet merchants, mail-order houses and other "remote sellers" to collect sales tax across state lines. Coalition
members are hoping to see action this fall on the Sales Tax Fairness and Simplification Act, which is pending in both the House and Senate. The measure would allow states that have implemented the Streamlined
Sales and Use Tax Agreement to require that out-of-state merchants collect sales tax on merchandise sold to residents of their states. ...While the Streamlined Sales and Use Tax Agreement went into effect
on a voluntary basis in 2005, the coalition says that passage of federal legislation is needed before sales tax collection can become mandatory.
Thus far, 22 states have passed legislation implementing the agreement. In addition, more than 1,000 companies have participated in the agreement voluntarily, and have collected more than $125 million in
state and local sales tax that would otherwise have gone unpaid. The NRF helped draft the Streamlined Sales and Use Tax Agreement, and has long argued that remote sellers enjoy an unfair price advantage in
situations where they are not required to collect sales tax. The NRF wants a level playing field where all retailers are subject to the same tax rules when their merchandise is sold from a store, through a
catalog or over the internet.
Wednesday, September 26, 2007 ~ 2:16 p.m., Dan Mitchell Wrote: European Central Bank (ECB) chief Jean-Claude Trichet has said that France's public finances are in "very great difficulty." "In 2007,
according to statistics from the European commission, France will be the country spending the most in public expenditure in relation to gross domestic product, not only within the eurozone but among the 27
members of the European Union", Mr Trichet told Europe 1 radio on Sunday (23 September). On top of that, "the development of France's
public finances has on average been significantly worse than that of other European countries", he added. …Mr Trichet's comments also come as a reply to French president Nicolas Sarkozy, who has
repeatedly criticised the ECB lately on a number of points, notably for not cutting interest rates. …Mr Trichet, who has also repeatedly
stressed the need for the ECB to remain independent from any political pressure and has been riled by Mr Sarkozy' comments, pointedly took Berlin as an example of a government which has managed to lower its
public expenditure. Currently, Germany's public spending is nine percentage points of GDP lower than that of France, which has to "adapt faster", if it wants to benefit best from a global economy, Mr
Trichet said.
Tuesday, September 25, 2007 ~ 11:47 a.m., Dan Mitchell Wrote: Schip was created in 1997 to help insure children from low-income families, but it has since become a stealth vehicle to expand
government control of health care. Schip expires next week, and House and Senate negotiators are hashing out a "compromise" that would
expand the program by about $35 billion over the next five years (plus a budget gimmick concealing at least $30 billion). ...Many states like
New Jersey have been taking advantage of Schip's "flexibility" and covering more affluent children, their parents, and even childless
adults. In a tardy response to this trend, the federal Department of Health and Human Services announced in August that before states could further expand their Schip programs beyond 250% of poverty,
they would have to enroll 95% of children below 200% of poverty. ...For several years the number of uninsured New Jersey children under 200% has held steady, while New Jersey's Schip rolls have grown by
about 10% a year. One major reason is that the state continues to enroll families with incomes up to $72,275. ...Governor Corzine could always tax his own residents to pay for this largesse. Then again, New
Jersey already has one of the worst tax burdens in the country, and Trenton has raised taxes five times in the last six years. For the Governor, the political beauty of Schip is that it allows New Jersey to
finance its spendthrift ways on the backs of more responsible states. Link to this Blog Entry
Tuesday, September 25, 2007 ~ 11:23 a.m., Dan Mitchell Wrote: The brainchild of Republican Senator Charles Grassley, the changes, promulgated in 2006, raise taxes on U.S. workers abroad by setting a
low cap on income-tax deductions for expatriate housing and tinkering with the way taxes are levied on upper-income earners. At the time, Mr. Grassley characterized the change in the law as a matter of fairness.
Instead, it's helping to drive Americans out of work. ...Companies that want to hire Americans in engineering and construction are especially
squeezed, since those fields often require hiring whole teams. ...The U.S. has long been the only industrialized country to tax its citizens no matter where in the world they live, and that puts Americans at a
significant disadvantage in the global job market. To lure Americans overseas, companies need to offer significantly higher gross pay so the would-be expat doesn't suffer a net drop in income after paying both
local and U.S. taxes.When the housing-exemption rule change was passed, Congress estimated it would raise $2.1 billion in revenue over the next 10 years. But such number-crunching assumes companies will
keep hiring U.S. citizens. When you factor in the costs of lost job opportunities for Americans and lost American influence abroad, this is one expensive tax. Link to this Blog Entry
Tuesday, September 25, 2007 ~ 10:51 a.m., Dan Mitchell Wrote: Europeans have little faith that their continent can compete economically with fast-growing Asian countries – but are even more
convinced that it should not become more like the US. …multinational corporations are seen by Europeans as more powerful than governments, while those polled generally believed that regulations
protecting workers' rights should be strengthened rather than relaxed. …When asked whether Europe's economy should be more like that of the US, the results were clear-cut. Those saying it should not, included
78 per cent of Germans, 73 per cent of the French, 58 per cent of the Spanish. In both Italy and the UK, 46 per cent opposed the US model. …Asked if a free-market, capitalist economy was the best system,
Spanish and German respondents agreed overall, but the French and Italians did not. The British were less clear, although there was more support than opposition for a "capitalist" system. The unintentionally amusing (or sad) part of the story is that America does not have an "American-style" capitalist system. The difference between the United States and Europe is that America has a medium-size welfare state while most European nations have large-size welfare states. The difference is not trivial, which is why America is more prosperous, but Europeans have a very distorted view of the United States thanks to ideologically biased information sources such as Michael Moore and CNN International Link to this Blog Entry
Tuesday, September 25, 2007 ~ 9:16 a.m., Dan Mitchell Wrote: Sweden's centre-right government pledged to continue its tax reform plans earlier this week, announcing cuts in personal income tax worth
about US$1.6 billion (around SKr11 billion). ...Prime Minister Fredrik Reinfeldt told lawmakers that the latest round of tax reforms was aimed at creating more incentives to work, thereby cutting Sweden's
rate of unemployment. ...In other actions that will chip away at Sweden's huge welfare state, the government will reduce sick pay in the first year by 5% to a maximum of 75% of salary... The government has
also promised to eliminate Sweden's wealth tax, charged at 1.5% on savings of over SKR1.5 million (US$214,000) for single people, and at the same rate on savings of more than SKR3 million for couples. Link to this Blog Entry
Monday, September 24, 2007 ~ 12:14 p.m., Dan Mitchell Wrote: US Senator John McCain (R-AZ) has joined Senators Trent Lott (R-MS) and John Sununu (R-NH) to push for Congress to enact legislation that
would make a moratorium on state and local internet tax permanent. The ban is currently set to expire on November 1, 2007. ...Senator McCain says he has fought to permanently ban multiple or
discriminatory state and local taxes on Internet access and e-commerce transactions since 1998, when he helped champion legislation to make the Internet tax-free, spurring a three year moratorium on new Internet
taxes. After the moratorium was extended twice, McCain joined Senators Wyden and Sununu in introducing the Permanent Internet Tax Freedom Act of 2007, on the first day of the 110th Congress.
Monday, September 24, 2007 ~ 11:54 a.m., Dan Mitchell Wrote: This week the House of Representatives overwhelmingly approved a plan to erase billions of dollars of subprime loan defaults in the private mortgage industry. How? By making taxpayers responsible for future losses. The Bush Administration recently announced support for a similar plan, and the housing industry is in full lobbying mode. One of the lone skeptics is Alabama Senator Richard Shelby, who warns that this could be one of the most expensive federal bailouts since the savings and loan crisis of the late 1980s. He's on to something. ...The Bush plan would give the Federal Housing Administration (FHA), Uncle Sam's Depression-era housing agency, the authority to help as many as 80,000 subprime borrowers refinance mortgages at lower interest rates by insuring those loans against default. ...What's troubling about the FHA expansion plan is that the insurance guarantee places taxpayers atop the housing bubble. Uncle Sam would insure tens of billions of dollars in new mortgage liabilities, and just when default levels are cascading. Worse, both the White House and Congress want to suspend the FHA's downpayment requirements to insure even zero-equity loans. They should read a new study by the Office of Federal Housing Enterprise Oversight (OFHEO), which reviewed 5,000 FHA loans and found that borrowers "who make no downpayment at all have the highest default rates." ...At the very moment when private mortgage lenders are under pressure from regulators, rating agencies and shareholders to tighten underwriting to avoid another mortgage meltdown, the FHA is relaxing its standards so it can insure more questionable mortgages. What's particularly galling is that the bailout plans from Congress and the White House give more power to a bureaucracy - the Federal Housing Administration - with a track record of incompetence. This should be called the "FEMA Effect" because of the way politicians rewarded the emergency preparedness bureaucracy after the Katrina fiasco. The WSJ editorial highlights a few of the reasons to expect nothing but bad news if the bailout occurs: In recent years, the U.S. Government Accountability Office and the federal Housing Department's Inspector General have issued reports
scoring the FHA for fraud, lax financial standards, and mission failure. The Inspector General reported in 2006 that "because of adverse loan
performance," the FHA's "total costs exceed receipts on a present value basis." It also noted that FHA has consistently underestimated
default rates on its new loans. ...It's a testament to the FHA's underwriting ineptitude that, even during the biggest housing boom in a generation, the agency's delinquency rate has somehow doubled over
the last 10 years. In 2004, 2005 and 2006, the FHA's delinquency rate was five times higher than the rate on conventional prime mortgage loans, double the rate on loans with private mortgage insurance, and
even slightly higher than the rate on subprime loans. ...FHA's market share fell to an all-time low of 4% of all loans in 2006, down from 19% a decade ago. The Bush Administration should have worked to get that
percentage to zero and mothballed an obsolete New Deal agency. Instead, HUD bureaucrats and the housing industry keep inventing new missions for the agency, such as the "zero downpayment" program.
FHA now wants to elbow its way into the upscale market by expanding the size of a loan it can insure to as much as $417,000--which would make subsidized mortgage insurance a kind of universal entitlement.
Monday, September 24, 2007 ~ 11:37 a.m., Dan Mitchell Wrote: ...the battle over the State Children's Health Insurance Program, or Schip, is a perfect first example of how Democrats intend to play their
spending fights this fall. They're demanding at least $30 billion more than Mr. Bush's own generous $5 billion Schip increase. Any congressional Republican who votes against this hike will be accused of
leaving "poor kids" to suffer without health care. The goal here, as it will be in all the big money fights to come--appropriations bills, a farm
bill--will be to make it too politically hot for Republicans to stand by their spending principle. ...It was none other than ranking Finance Committee Sen. Chuck Grassley who helped craft the $35 billion
Senate Schip increase; the Iowan went so far as to suggest he was being a fiscal prude because his bill was cheaper than the blowout $50 billion expansion from House Democrats. That proved a good-enough excuse
for more than a dozen other spend-happy Republicans to help give Democrats 68 votes for the bill in early August. ...The fight over Schip has moved to the House, where most Republicans, to their credit, voted
against the initial bill. ...Many House Republicans in fact are working under the assumption that Mr. Bush will compromise, and give them cover for blowing through his initial Schip limit. They can't quite bring
themselves to believe that the White House would put them in the very public and embarrassing position of having to override their own president on a question of fiscal responsibility. And, to be fair, why
should they? For six years the administration failed to pick a fight on spending when Republicans controlled Congress, instead letting every highway bill, farm giveaway and pork project rush through.
Monday, September 24, 2007 ~ 10:54 a.m., Dan Mitchell Wrote: ...more than three months after a general election, Belgium has failed to create a government, producing a crisis so profound that it has led to a
flood of warnings, predictions, even promises that the country is about to disappear. ...Officials from the former government - including former
Prime Minister Guy Verhofstadt, who is ethnically Flemish - report for work and collect salaries. The former government is allowed to pay bills, implement previously-decided polices and make urgent decisions
on peace and security. ...there is deep resentment in Flanders that its much-healthier economy must subsidize the Francophone south, where unemployment is double that of the north. ...Belgium has suffered
through previous political crises and threats of partition. But a number of political analysts say that this one is different. The turning point is widely believed to have been last December when RTBF, a
Francophone public television channel, broadcast a hoax on the break-up of Belgium. The two-hour live television report showed images of cheering, flag-waving Flemish nationalists and crowds of
French-speaking Walloons preparing to leave, while also reporting that the king had fled the country. Panicked viewers called the station, and
the prime minister's office condemned the program as irresponsible and tasteless. But for the first time, in the public imagination, the possibility of a breakup seemed real.
Sunday, September 23, 2007 ~ 10:58 a.m., Dan Mitchell Wrote: President Nicolas Sarkozy will face his first strike on Oct. 18 after five of France's eight railway unions called for a day of protests, vowing to
defend their right to retire at 50. The strikes will be a test of labor's strength against Sarkozy's resolve to overhaul pension privileges enjoyed by 500,000 public sector employees. ...The unions seem to have
been shaken by Sarkozy's determination. Unlike in 1995 and 2003, public opinion is firmly opposed to public sector pension privileges.
Sunday, September 23, 2007 ~ 10:08 a.m., Dan Mitchell Wrote: ...every American should be infuriated that the U.N. feels it has the right to determine our foreign policy. The elected representatives of the
American people are the only ones who should decide if the embargo is lifted, modified or left as is. Unelected bureaucrats at the world's biggest anti-American organization have no moral claim to make such
a decision. ...This from the same organization that has placed Cuba, China, Libya, Saudi Arabia and other undeserving nations on its Human Rights Council, that leads the world in corruption and scandal,
and that's done such a lousy job keeping peace, stopping genocide and preventing belligerent tyrannies from developing nuclear weapons.
Saturday, September 22, 2007 ~ 11:57 a.m., Dan Mitchell Wrote: Democracy means voting. It does not mean freedom. When we lump the two ideas together, we confuse ourselves and others. Britain was a free
country long before it became democratic. In Germany, Hitler was elected democratically. In much of Africa, democracy in practice has
meant, "One man, one vote -- one time," as elected leaders put an end to both elections and freedom. It would be wonderful to have free and
democratic nations throughout the world, and that would very likely reduce military conflicts, as Sharansky and others say. But we do not ensure freedom by holding elections.
Saturday, September 22, 2007 ~ 11:21 a.m., Dan Mitchell Wrote: Gov. Martin O'Malley yesterday proposed the first major overhaul of Maryland's income tax brackets in 40 years, offering what he called a
"more progressive" system in which high-end earners would pay more... "We must be very cautious that we're not asking people to go
live in other jurisdictions, where taxes are not as high," said Sen. Rona E. Kramer (D), chairwoman of Montgomery's Senate delegation.
"Northern Virginia is a very appealing place, and it's right across the river." ...House Minority Leader Anthony J. O'Donnell (R-Calvert)
called the plan "a historic beating up on Marylanders through the income tax," noting that the top marginal rate would increase by nearly
37 percent. ...Under O'Malley's plan, Montgomery residents in the highest bracket would pay a combined state-county rate of 9.7 percent, which County Executive Isiah Leggett (D) said yesterday is "not
acceptable." ...The combined rate of 9.7 percent would also exceed the current top marginal rates in the region. In Washington, the top rate is
8.5 percent; in Virginia, 5.75 percent; and in Delaware, 5.95 percent. Maryland would not be alone in imposing higher rates on upper-income earners. California , for example, applies a rate of 10.3 percent on
incomes of more than $1 million.
Friday, September 21, 2007 ~ 12:07 p.m., Dan Mitchell Wrote: Many of our trading partners have cut their corporate taxes, and more and more conservatives want the United States to follow suit.
Apparently they haven't been listening to their own speeches on free trade. Companies compete. Countries, however, are not engaged in a zero-sum contest where one nation's gain is another's loss. Cutting
corporate tax rates may or may not be a good idea, but we don't need to make it a priority to preserve our competitiveness. ... The primary focus of the Romney and Giuliani tax plans remains high earners. What
would be a serious middle-class tax cut? One answer is to expand the tax credit for children. But none of the candidates is proposing to do so,
or any other big tax relief for regular folks. ... True, an expanded tax credit for children wouldn't increase economic growth. Growth is good, and more growth is better. But present tax rates are perfectly
compatible with healthy long-term growth. There is no pressing need to bring them down to improve growth.
Friday, September 21, 2007 ~ 11:50 a.m., Dan Mitchell Wrote: On the spending side of the ledger, I can't dispute Alan's general notion that the federal government is too big and spends too much
money--we've agreed on that point since we both worked in the Ford administration more than 30 years ago. President Bush feels the same way, and that's why he has steadily reduced the annual rate of growth
in non-security discretionary spending. In contrast, the last budget enacted during the Clinton/Gore administration increased that category of spending by a staggering 15%. President Bush has pressed hard to
keep that spending under control--and this year's increase will actually be lower than the rate of inflation for the third year in a row. ...Alan has long argued, correctly, that fiscal discipline is a long-term
obligation requiring honesty and a willingness to make tough choices. Here again, we agree. And on this measure, President Bush's record is superb. He has proposed reforms in Medicare and Medicaid--and has
repeatedly asked Congress to reform Social Security and place it on firm financial ground. Though Congress has failed to act, no other president has spent more time or political capital trying to avert a fiscal
disaster that everyone knows is coming. As Steve Slivinski of the Cato Institute explains (http://www.cato-at-liberty.org/
Friday, September 21, 2007 ~ 10:54 a.m., Dan Mitchell Wrote: Like other major Democratic candidates, the Illinois senator already has said he would eliminate the portion of the Bush administration tax
cuts that benefits families earning more than $250,000 per year... Obama said he would pay for the tax cuts by "shutting down corporate loopholes and tax havens," eliminating a tax break for hedge fund
managers and raising the tax rate charged on capital gains and corporate dividends. ...the campaign has not yet determined the exact rate they would propose, according to the campaign adviser who
briefed reporters. Obama said he would "penalize companies and individuals" who do business in such "tax haven" countries as Andorra
and Liechtenstein that do not follow international standards for sharing financial information. The campaign adviser said Obama had not yet determined all of the loopholes he would eliminate but said they would
include virtually all tax breaks for the oil and gas industry. Obama also would change the law to make it easier for the IRS to challenge tax shelters that have no substantial economic purpose, the adviser said.
Friday, September 21, 2007 ~ 10:20 a.m., Dan Mitchell Wrote: Czech Parliament's upper chamber, the Senate, voted Wednesday to approve the government's reform plan, which includes tax cuts and
changes to welfare programs. The vote was 49-27 in the 81-seat chamber. ...The measures include reducing the corporate tax rate from 24 to 21 percent next year and to 19 percent in 2009. The plan creates
a 15 percent flat tax for personal income in place of the progressive levy of up to 32 percent. ...The bill will also eliminate most corporate
write-offs, lower state-funded social benefits and introduce fees for visits to doctors and hospitals.
Friday, September 21, 2007 ~ 9:16 a.m., Dan Mitchell Wrote: Global capitalism has long lacked for a ringing slogan like "workers of the world unite." It's never too late to find one, and a good candidate --
with apologies to the international charity of the same name -- might be "save the children." ...In a worldwide instance of trickle-down
economics, the growth is diminishing the ranks of the poor. According to the World Bank, developing countries have averaged 3.9 percent
growth since 2000, contributing "to rapidly falling poverty rates in all developing regions over the past few years." In 1990, 1.25 billion
people lived on less than $1 a day. In 2004, less than a billion did, even though world population increased 20 percent in the interim. When a
developing country gets richer, it means that people living there are less likely to be malnourished and -- as infrastructure improves -- more
likely to have access to clean water and to sanitation. This is a boon to health.
Thursday, September 20, 2007 ~ 6:11 p.m., Dan Mitchell Wrote: The new President declared that France's generous welfare state is "unjust" and "financially untenable," "discourages work and job
creation," and "fails to bring equal opportunity." The result: France's jobless rate is the euro zone's highest. The President wants "a new
social contract founded on work, merit and equal opportunity." He promised to loosen restrictions on working hours and toughen up requirements for jobless benefits, to ease hiring and firing rules and
reduce incentives to retire early. ...the President said the law mandating a maximum 35-hour work week ought to be further relaxed to let the
French--perish the thought--"choose work over leisure." Inexplicably, however, Mr. Sarkozy refrained from pulling the plug on a law that's
come to symbolize France's slothful ways. He showed more political courage in calling for an end to state-guaranteed job security at private firms. Such legal protections discourage companies from hiring new
employees and spur outsourcing. He also took on the most coddled insiders of all, public-sector workers. State employees retire earlier with full and often better benefits than the rest of the population, which
picks up the tab.
Thursday, September 20, 2007 ~ 3:02 p.m., Dan Mitchell Wrote: To appreciate just why it has been so important for EU leaders to get their constitution regardless of their peoples' wishes, one must grasp the
fundamental principle on which those behind the "European project" have worked toward their ultimate goal. ...as long ago as 1941, one of
those visionaries, Italian ex-Communist Altiero Spinelli, proposed in his Ventotene Manifesto that the shapers of the new Europe should stealthily build up the structures of their new government over a long
period without consulting the people. ...Only by 2001 did EU leaders feel they were at last close enough to their ultimate goal to draft a fully fledged constitution, putting the all but final touches to the new
supranational government by giving it a permanent president and foreign minister, and with the European Council acting in effect as its Cabinet. ...however, the French and Dutch gave the tortuous 400-page
document a resounding thumbs-down, EU leaders were baffled as to what to do next -- until this year they came up with their masterstroke. Why don't we, they agreed, just revive the rejected constitution under
another name? By calling it a "Reform Treaty," making a couple of cosmetic changes, it can then be rammed through in a few months. ...Only in Britain has this cynical maneuvering provoked real national
anger, compounded by Mr. Brown's "terminological inexactitude" that the new treaty is different from the constitution. ...If they get away with
it, however, they will have taken another giant step toward that "United States of Europe" ...a government set up regardless of the wishes of the people it seeks to govern. They will be on the verge of
pulling off what, over the past half-century, has amounted to a slow-motion coup d'état, one of the strangest and most far-reaching in history.
Thursday, September 20, 2007 ~ 2:22 p.m., Dan Mitchell Wrote: The head of Utah's largest teachers' union promised an "ugly, mean and expensive" campaign, and the National Education Association has
given her $3 million to wage it. That's a lot of money in a state with one media market. ...If they succeed in defending the law, school choice
advocates will give Utah's parents a valuable educational tool and the nation will have a universal school choice model to evaluate and, if
successful, emulate. ...for school choice opponents it's really not about educating children. For them, it's about collective bargaining, retirement benefits, and lowered accountability. How can we forget the
infamous words of the late president of the American Federation of Teachers, Albert Shanker, who said, "When school children start paying
union dues, that's when I'll start representing the interests of school children."
Wednesday, September 19, 2007 ~ 4:18 p.m., Eugene Slaven Wrote: ...trade negotiators overcame seemingly insurmountable obstacles to sign the landmark Korea-US free trade agreement on June 30. The
trade pact would provide new opportunities for US businesses and workers by increasing US-South Korean trade, liberalising South Korea's economy to expand market access and making 94 per cent of
bilateral trade duty-free within three years….But protectionist demands for managed trade by the US automotive sector and the Democratic congressional leadership threaten to derail the agreement. Detroit is
fighting to defeat a trade bill that redresses the very problems it has complained about for years. ...the FTA chapter on automobiles is one of
the agreement's strongest selling points….The FTA would eliminate the 8 per cent tariff South Korea slaps on passenger cars imported from the
US. It also revises the domestic tax system based on engine size, which has been seen as discriminatory against US cars. …This FTA would enable companies from both countries to engage in the intense
competition of free and fair trade on a more level playing field. In a telling reflection of the benefits of the agreement, South Korean auto
workers are protesting against it for fear of losing market share to the US.
Wednesday, September 19, 2007 ~ 2:59 p.m., Dan Mitchell Wrote: No-income-tax states such as Florida, Nevada and Texas are looking increasingly attractive to people getting ready for retirement. ...But
before you move to a tax haven, it's important to pay attention to the fine print of how to move. It's easy to make seemingly minor mistakes
that can trigger a painful audit — and a hefty bill — from the high-tax jurisdiction you thought you had left behind. ...Some relatively high-tax
states are increasingly cracking down on individuals who claim to have moved out of state, but still maintain strong connections to their former
homes. Massachusetts plans to hire additional tax examiners in the next few months, some of whom will be assigned to a special "domicile unit"
as part of its tax-audit program. ... state income tax rates can run as high as 10.3 percent in California and 8.97 percent in New Jersey. Besides Florida, Nevada and Texas, other states with no state income
tax for individuals include Washington, Alaska, South Dakota and Wyoming. New Hampshire and Tennessee don't have a broad wage-based income tax but do tax interest and dividends. ...from April
2000 through June 2006, there was a net migration of 2.3 million people moving from states with income taxes to states with no income taxes, an average of more than 1,000 people moving per day, says
Richard Vedder, an economics professor at Ohio University in Athens, Ohio, based on an analysis of census data.
Wednesday, September 19, 2007 ~ 10:45 a.m., Dan Mitchell Wrote: So can any wealthy, modern country get health care right without resorting to socialism? Yes. You never hear it touted by the media but
Switzerland uses market forces, not government rules and red tape, to create a private, affordable, high-quality health-care system for its 7.5
million citizens. And it spends 40 percent less per capita than we do.
Tuesday, September 18, 2007 ~ 12:57 p.m., Eugene Slaven Wrote: British Columbia is in competition with Alberta, but it has a disadvantage --a system of taxation that kneecaps the province. Taxing
people who earn higher incomes, at progressively higher rates, may unite the hands of comrades, but it could hold back the British Columbia economy. ...In B.C., people who work hard to make more
money are punished by the tax system. This is called a progressive tax system; the more you earn, the greater the percentage of tax you pay.
B.C.'s "high-income" marginal tax rate is among the highest in Canada at 14.7%. Only New Brunswick and Nova Scotia have higher,
"high-income" rates, at 17.84% and 17.5% respectively…Alberta has a 10% across the board flat income tax. Not only that, in B.C., residents
start paying provincial income tax at $8,858, but in Alberta, they don't start paying until they achieve an income of $14,999. What this all
means is if you make $150,000 in B.C., your total provincial tax bill will be $15,500. In Alberta, you'd currently pay $13,186…A lower, simpler
and flatter income tax system would create tremendous incentives for economic growth and long-term stability in British Columbia.
Tuesday, September 18, 2007 ~ 12:06 p.m., Dan Mitchell Wrote: The Fed's easy money policies helped cause the housing bubble and subprime crisis, and now it's being asked to solve them with more of the
same. ...For those of us who remember the economics of the 1970s, one abiding lesson is that trouble comes when the Fed is asked to spur economic growth. The job of a central bank is price stability. The
Reagan-Paul Volcker policy mix was tight money combined with tax cutting, which reversed the 1970s' mix of easy money and tax increases. Washington is in danger of drifting back, almost unconsciously, to that
1970s' policy. Indeed, it's quite likely that the Fed's easy-money policy in recent years is responsible for the dollar losing so much value compared to the euro. An Associated Press story reveals that Alan Greenspan admits that the euro is giving the dollar plenty of competition (though Greenspan does not acknowledge that his policies as Fed Chairman are partly responsible): Former U.S. Federal Reserve chairman Alan Greenspan said it is possible that the euro could replace the U.S. dollar as the reserve
currency of choice. According to an advance copy of an interview to be published in Thursday's edition of the German magazine Stern, Greenspan said that the dollar is still slightly ahead in its use as a
reserve currency, but added that "it doesn't have all that much of an advantage" anymore. ... Greenspan said that at the end of 2006, some
25 percent of all currency reserves held by central banks were held in euros, compared to 66 percent for the U.S. dollar. In terms of being
used as a payment for cross-border transactions, the euro is trailing the dollar only slightly with 39 percent to 43 percent.
Tuesday, September 18, 2007 ~ 10:23 a.m., Dan Mitchell Wrote: ...corruption is worse than even the most strident Wolfowitz supporter could have dreamed. ...The facts detailed boggle the imagination. The
report says, "more than 2,000 external cases of alleged fraud, corruption or misconduct have been investigated by the bank since 1999, and more than 330 companies and individuals have been publicly
sanctioned." ...Dating back to a pioneering paper by Harvard economist Robert Barro, students of economic growth have known that corruption is a leading obstacle to economic growth. Advances in the
rule of law, Barro found, have a powerful positive impact on the economic prospects of a country.
Monday, September 17, 2007 ~ 7:50 p.m., Dan Mitchell Wrote: When government is in charge of health care, the result is not that everyone gets access to experimental treatments, but that people get
less of the care that is absolutely necessary. At any given time, just under a million Canadians are on waiting lists to receive care, and one in eight British patients must wait more than a year for hospital
treatment. Canadian Karen Jepp, who gave birth to quadruplets last month, had to fly to Montana for the delivery: neonatal units in her own country had no room. Rationing in Britain is so severe that one
hospital recently tried saving money by not changing bed-sheets between patients. Instead of washing sheets, the staff was encouraged to just turn them over, British papers report. The wait for an
appointment with a dentist is so long that people are using pliers to pull out their own rotting teeth. Patients in countries with government-run
health care can't get timely access to many basic medical treatments, never mind experimental treatments. That's why, if you suffer from cancer, you're better off in the U.S., which is home to the newest
treatments and where patients have access to the best diagnostic equipment. People diagnosed with cancer in America have a better chance of living a full life than people in countries with socialized
systems. Among women diagnosed with breast cancer, only one-quarter die in the U.S., compared to one-third in France and nearly half in the United Kingdom. Last month, the largest ever international survey of cancer survival rates showed that in the U.S., women have a 63% chance of living at
least five years after diagnosis, and men have a 66% chance -- the highest survival rates in the world. These figures reflect the care available to all Americans, not just those with private health coverage.
In Great Britain, which has had a government-run universal health-care system for half a century, the figures were 53% for women and 45% for men, near the bottom of the 23 countries surveyed. A 2006
study in the journal Respiratory Medicine showed that lung cancer patients in the U.S. have the best chance of surviving five years -- about 16%. Patients in Austria and France fare almost as well, and
patients in the United Kingdom do much worse with only 5% living five years.
Monday, September 17, 2007 ~ 6:05 p.m., Dan Mitchell Wrote: The City, as London's financial district is known, has come to rely on the U.K.'s status as a tax haven. It is one of the reasons it is so
successful. If you get rid of the rule now, business might start to drift away to Zurich. Likewise, London gets a boost from ``non-dom'' residents in powering its turbo-charged economy. They keep house
prices high, create jobs and attract new business. Anything that damages London's standing in the global economy will hurt the country. There is certainly a good case to be made for lowering taxes for the
native British. If the U.K. had a flat tax of, say, 15 percent, there would be fewer complaints about how little the super-rich were paying.
Monday, September 17, 2007 ~ 5:37 p.m., Dan Mitchell Wrote: In a withering critique of his fellow Republicans, former Federal Reserve Chairman Alan Greenspan says in his memoir that the party to
which he has belonged all his life deserved to lose power last year for forsaking its small-government principles. In "The Age of Turbulence: Adventures in a New World," published by Penguin Press, Mr.
Greenspan criticizes both congressional Republicans and President George W. Bush for abandoning fiscal discipline. ...Mr. Greenspan, who
calls himself a "lifelong libertarian Republican," writes that he advised the White House to veto some bills to curb "out-of-control" spending
while the Republicans controlled Congress. He says President Bush's failure to do so "was a major mistake." Republicans in Congress, he
writes, "swapped principle for power. They ended up with neither. They deserved to lose." ..."Little value was placed on rigorous economic
policy debate or the weighing of long-term consequences," he writes.
Monday, September 17, 2007 ~ 4:44 p.m., Dan Mitchell Wrote: Hannover Re, one of the world's largest reinsurance companies, is considering switching its operations to Ireland or another low tax
jurisdiction, the company's chief executive told a conference recently. According to Bermuda's Royal Gazette, Wilhelm Zeller, CEO of Hannover Re, told a press conference at the annual reinsurance
gathering, Le Rendez-Vous in Monte Carlo, that the $5.5 billion firm is considering moving from its present base in Germany... "For us, the
ideal location, from a fiscal point of view, would be Ireland," Zeller stated, although he added that setting up headquarters in Dublin could
be costly. While Ireland's low 12.5% corporate tax and location within the European Union is a big draw for reinsurance and other companies, Bermuda's 0% rate of tax has lured many insurance companies to
incorporate in the jurisdiction from high-tax countries like the UK. Last year, Lloyds of London underwriting firms Hiscox and Omega set up companies in Bermuda, citing the UK's the 30% income tax and its
burdensome regulation. They were swiftly followed in January 2007 by another Lloyds firm, Hardy Underwriting plc. ...The 82 new Bermuda incorporations for 2006 compare very favourably with figures recorded
by other jurisdictions such as Vermont, which had 37, South Carolina with 29, and the Cayman Islands with 50.
Monday, September 17, 2007 ~ 3:11 p.m., Dan Mitchell Wrote: The multibillion-pound private equity industry would be forced to move abroad with the loss of thousands of jobs if the chancellor, Alistair
Darling, raised taxes on the personal wealth of private equity partners, according to a report by the industry's trade body.
Sunday, September 16, 2007 ~ 9:42 p.m., Dan Mitchell Wrote: The best thing about Friday's budget is what wasn't in it; namely, huge increases in public spending. The budget calls for 2.8% growth in
federal outlays, a marked slowdown from this year's 14.8% splurge. .. But not a single income-tax cut was proposed in a country that shoulders one of the highest tax burdens in Southeast Asia. …Next
year's budget doesn't promise much on corporate tax relief, either. While the Prime Minister promised to cut the corporate levy to 25% by 2009, from the current 29%, that just maintains Malaysia's gap with
neighboring Singapore, which cut rates by 2 percentage points this year -- to 18%. Japan recently announced corporate tax cuts and Vietnam is
thinking about following suit. In the cutthroat global competition for capital, Malaysia can't afford to fall behind.
Sunday, September 16, 2007 ~ 9:19 p.m., Dan Mitchell Wrote: Civil liberties groups in France have reacted furiously over government plans to introduce DNA testing for the families of immigrants, to prove
their demands for visas are genuine. The tests would not be compulsory, but there are fears that applicants who do not take them would have their cases rejected. The proposal has been put forward by
Thierry Mariani, an MP of the governing UMP party and a confidant of President Nicolas Sarkozy. They envisage possible DNA tests for applications for visas of more than three months; where there was
"serious doubt" birth or marriage certificates were genuine, immigration officials could "propose" to applicants that they take, at
their own expense, a test to prove a biological link with other family members.
Sunday, September 16, 2007 ~ 8:00 p.m., Dan Mitchell Wrote: The NHS is a rambling nationalised industry in which much is spent on obsolescent services and the scarce time of experienced professionals is
used poorly. The increase in funding under this Government has had predictable results - it has simply raised costs. An extra £43bn has gone into the service over the past five years but it is still struggling to meet demand. Doctors' salaries have soared, but
the number of patients they are treating has declined
Saturday, September 15, 2007 ~ 10:48 p.m., Dan Mitchell Wrote: President Felipe Calderón is pushing an overhaul of Mexico's tax system, which he blames for the country's high poverty rate and
creaking infrastructure. …"Only with stronger public finances can we confront the enormous challenge of ending the misery that millions of
Mexicans live in," Calderón said in his State of the Union address this month. Caldero´n's goal is to increase Mexico's tax income by about a
third, or roughly $35 billion a year. …"What this government needs is more income; it's as simple as that," said Rep. Susan Monreal, secretary
of the budget committee in Mexico's Chamber of Deputies, the lower house of Congress. "We have 50 million people who are living in
poverty and not seeing the fruits of this economy. That has to change." …To raise more money, the tax plan would: •Create a corporate income tax based on companies' revenue, rather than their profits.
Companies would have to pay the higher of the two figures, making tax deductions irrelevant. •Require banks to deduct a 2% tax on deposits over a certain amount, probably $1,800 per month. The measure is
aimed at catching people who are paid under the table.
Friday, September 14, 2007 ~ 11:36 a.m., Dan Mitchell Wrote: ...neither party wants a government so inefficient that more than half of the time it is not even "moderately effective" and 25 percent of the time
receives a failing grade of "D" or "F" for low performance. ...Out of 971 discretionary spending programs, 511 lower-rated programs were
found to be on average falling about 50 percent short of their goals. Even the 460 higher-rated discretionary programs were not operating with complete efficiency. On average, they were falling 20 percent
short. ...Medicaid...received a failing grade of "F. ...if the government performed efficiently, it could deliver to the public the same "services"
as at present, but for at least $250 billion less per year.
Friday, September 14, 2007 ~ 11:00 a.m., Dan Mitchell Wrote: The EU's aim to boost the use of biofuels as part of wider plans to reduce greenhouse gas emissions has received a serious blow from the
Organisation for Economic Cooperation and Development... "The current push to expand the use of biofuels is creating unsustainable tensions that will disrupt markets without generating significant
environmental benefits," an OECD study to be unveiled on Tuesday (11 September) says, according to the Financial Times. ...according to the OECD report, biofuels would cut energy-related emissions by a
maximum of 3 percent while they would most likely mean a huge cost for taxpayers. The EU could end up paying ten times more than the US for incentives to boost the production of ethanol.
Friday, September 14, 2007 ~ 10:41 a.m., Dan Mitchell Wrote: The government said after the market closed on Sept. 7 it would seek 20 billion kroner ($3.5 billion) of payments in exchange for scrapping
corporate tax on shipping companies. Shippers have been allowed to defer tax since 1996 provided they don't use the money for dividends. ... ``The government is reneging on its previous agreement,'' said Rikard
Vabo, an analyst at Fearnley Fonds in Oslo who has a ``sell'' recommendation on BW Gas. ``We will probably see shippers move abroad. It will also affect related companies, such as suppliers.'' ... The
government wants to abolish corporate tax on shippers because lower rates outside Norway have encouraged companies to register new vessels in countries such as Liberia and Bermuda. ... The Oslo-based
Norwegian Shipowners' Association will ``consider everything'' to reverse the tax ruling, spokeswoman Marit Ytreeide said by phone today.
Thursday, September 13, 2007 ~ 6:41 a.m., Dan Mitchell Wrote: Los Angeles officials, among others around the country, are proposing to limit new fast-food restaurants -- a tactic that could be called health
zoning. The City Council will be asked this fall to consider an up to two-year moratorium on new fast-food restaurants in South L.A., a part of the city where fast food is at least as much a practicality as a
preference. …"While limiting fast-food restaurants isn't a solution in itself, it's an important piece of the puzzle," said Mark Vallianatos,
director of the Center for Food and Justice at Occidental College. This is "bringing health policy and environmental policy together with
land-use planning," he said. "I think that's smart, and it's the wave of the future." …A California law banning sugary drinks and limiting the
fat and sugar content of foods sold in middle and high schools took effect in July. And the state enacted legislation last year to increase the purchase of fruits and vegetables to be sold in corner stores in
lower-income communities. Rep. Mary Bono (R-Palm Springs) introduced a bill in Congress in June that, among other things, would try to increase the availability of nutritious foods in economically
depressed areas.
Wednesday, September 12, 2007 ~ 7:17 p.m., Dan Mitchell Wrote: The document, called "Reforming the budget, changing Europe", is set to be presented by EU budget commissioner Dalia Grybauskaite on
Wednesday (12 September). ...It notes that due to the size of the EU budget being "relatively small compared to national and regional
budgets," the bloc may in the future be "unable to finance all actions which might be deemed better funded at the European level." ...The
commission also highlights the problem of the EU's own resources and correction mechanisms, touching on...a possible EU tax... Currently, the main source of the EU budget is the national contributions based on
the member states' gross national income (GNI) which have over the years surpassed customs duties, VAT payments and agriculture levies.
Wednesday, September 12, 2007 ~ 5:38 p.m., Dan Mitchell Wrote: The Conservatives will propose banning plasma screens and other energy-guzzling electrical goods in a report to be unveiled next week.
The proposals target white goods like fridges and freezers, as well as TVs, personal computers and DVD players that use too much energy or operate on stand-by. …The group will also suggest scrapping Gross
Domestic Product (GDP) as a measure of the nation's success in favour of a model that measures people's happiness drawn up up by Friends of the Earth. Under the proposals, a cap could be set on the energy use of
each electrical appliance, and those exceeding limits could be banned from sale in the UK. …The proposals are set to be unveiled on Thursday in the final report of the Tories' Quality of Life Policy Group,
chaired by former Environment Secretary John Gummer and green activist Zac Goldsmith, a Conservative spokesman confirmed.
Tuesday, September 11, 2007 ~ 3:26 p.m., Eugene Slaven Wrote: Legislation in Congress to make the Internet tax ban permanent has strong bipartisan support, but that doesn't mean it should be taken for
granted. In fact, it recently hit a snag over the unrelated issue of how satellite TV is taxed, while there continue to be disputes over when grandfather clauses that allow some states to tax the Internet should
finally be closed. Given the tight timeframe - the current moratorium is due to expire on November 1 - it's possible that a slew of new Internet
taxes could in fact arrive this fall.... A federal moratorium first put in place in 1998, and subsequently extended, has protected the Internet
from access taxes and discriminatory or multiple taxation... If the moratorium is allowed to expire, states will likely impose new taxes on Internet access fees, bit-taxes on downloads, and perhaps even e-mail
taxes. There would be unlimited potential for taxation, which would only impede the flow of commerce and information on the Internet and slow a great engine of economic growth. The Internet, protected from
taxes, has been an enormous source of prosperity for American businesses and families. Allowing the moratorium on Internet taxes to expire (even temporarily) would be a gross public policy error.
Tuesday, September 11, 2007 ~ 1:33 p.m., Dan Mitchell Wrote: In a recent television appearance, Sen. Hillary Clinton (D-N.Y.) emphatically denied the suggestion that she supports socialized
medicine. Was Clinton being disingenuous, or are Democrats really trying to foist socialized medicine on the American people? The question seems silly once you consider how socialized our health care
system already is. Government already finances about half of Americans' medical care, so you might say our system is already half-socialized. Yet we are much farther along the road to socialized
medicine than even that would suggest. Consider two distinguishing features of socialist economies. The first is that the government decides what individuals may produce, what they consume, and the terms of
exchange. That is largely true of America's health care system. Government controls production and consumption by determining the number of physicians; what services medical professionals can offer
and under what terms; where they can practice; who can open a hospital or purchase a new MRI; who can market a drug or medical device; and what kind of health insurance consumers may purchase.
Government bureaucrats even set the prices for half of our health care sector directly, and indirectly set prices for the other half. ...A second
feature of socialist economies is that there is little incentive to make careful economic decisions, because government has put everyone in the position of spending other people's money. Canada may have the
most heavily socialized health care system in the advanced world. Yet America's system is as much a tragedy of the commons as the Canadian
system, where health care is ostensibly "free." In each country, only about 14 cents out of every dollar of medical spending comes directly
from the patient. How can America's health care system be "socialized" when we rely on the private sector more than any advanced nation?
Because it doesn't matter whether the dollars and the hospitals are owned publicly or privately. What matters is who controls how they are used. ...America doesn't have socialized medicine of the Canadian or
British variety, or socialized medicine borne of some deliberate plan. But American politicians should stop pretending that socialized medicine is some far-off dystopia. To paraphrase Keyser Söze, the
greatest trick that advocates of socialized medicine ever played was to convince the American people that we don't already have it.
Monday, September 10, 2007 ~ 6:54 p.m., Dan Mitchell Wrote: A senior finance ministry official has indicated that the Taiwanese government is keen to cut the country's rate of corporate tax to attract
more investment... Chang Sheng-ford announced on Wednesday that the 25% corporate tax rate could be cut to 16.5% or lower, but revealed that this would not happen until the Statute for Upgrading
Industries has expired in 2009. ...A cut in corporate tax to 16.5% would put Taiwan on a par with Hong Kong, perhaps the most successful economy in the region.
Monday, September 10, 2007 ~ 6:17 p.m., Dan Mitchell Wrote: Poland will join Britain in opting out from the EU's Charter of Fundamental Rights, Polish foreign minister Ana Fotyga announced
after arriving for talks in Portugal on the EU's new Reform Treaty. ...Poland's embattled conservative government dislikes the charter..., but at the same time it has been under pressure from trade unions - who
support the charter's social rights catalogue - to sign up to the charter.
Sunday, September 9, 2007 ~ 6:35 p.m., Dan Mitchell Wrote: France should work for a "much more offensive policy of protection, solidarity and regulation" at an EU level in order to better face
globalisation, according to a report by former French foreign affairs minister Hubert Vedrine. ...French president Nicolas Sarkozy in July asked Mr Vedrine to draft a report on how the country should respond
to the challenges of globalisation. ...The French are traditionally hostile to globalisation, due to a number of reasons - an attachment to the
protective state, to national identity and a language which they judge threatened by "the anglophone tide" and Americanisation. There is also
a persistent moral disgust for market economy and profit, reads the report.
Sunday, September 9, 2007 ~ 3:14 p.m., Dan Mitchell Wrote: As with all gun-control laws, the question is ultimately whether it is the law-abiding citizens or criminals who are most likely to obey the law. If
law-abiding citizens are the ones who turn in their guns and not the criminals, crime rates can go up, not down. ...in the five years before Washington's ban in 1976, the murder rate fell from 37 to 27 per
100,000. In the five years after it went into effect, the murder rate rose back up to 35. ...even cities with far better police departments have
seen crime soar in the wake of handgun bans. Chicago has banned all handguns since 1982. ...Chicago's murder rate fell from 27 to 22 per 100,000 in the five years before the law and then rose slightly to 23.
...D.C.'s brief specifically points to Great Britain's handgun ban in January 1997. But the number of deaths and injuries from gun crime in England and Wales increased 340 percent in the seven years from 1998
to 2005. ...Jamaica banned all guns in 1974, but murder rates almost doubled from 11.5 per 100,000 in 1973 to 19.5 in 1977, and soared further to 41.7 in 1980.
Saturday, September 8, 2007 ~ 9:15 p.m., Dan Mitchell Wrote: Republican presidential candidate Mitt Romney is filling in the blanks in his proposal to eliminate taxes on interest and dividends for families
earning less than $200,000 a year. ...Romney spokesman Eric Fehrnstrom, said the proposal would cost $32 billion, to be paid for through economic growth, and by holding non-defense discretionary
spending to inflation minus 1 percentage point. ...Romney, a multimillionaire venture capitalist, said the plan would not help people like him. "There may be some tax policies which tend to favor the
highest tax payers. This is certainly not one of them," he said. "It is entirely targeted at middle-income and modest-income Americans,
allowing the great bulk of our citizens - 95 percent of our citizens - to be able to save their income, tax free," he said.
Friday, September 7, 2007 ~ 2:21 p.m., Dan Mitchell Wrote: ...cigarette taxes have on average tripled in the last decade, but treasuries aren't getting the revenue boost. For consumers, tax-free
online cigarettes are only a mouse click away, and these purchases now cost the states more than $1 billion a year in lost tobacco taxes, according to the Campaign for Tobacco-Free Kids. Washington state,
which levies a tax of $2.03 a pack, loses an estimated $200 million a year to out-of-state purchases, according to the Seattle Times. Californians smoke 300 million untaxed packs of cigarettes a year
thanks to the Internet, smuggling, and out of state sales. In New York City, where the combined city and state tax is $3 a pack, smugglers sell bootlegged cigarettes on street corners much like drug dealers.
Friday, September 7, 2007 ~ 1:32 p.m., Dan Mitchell Wrote: ..."let the market work" is a slogan among the segment of global-warming catastrophe crowd that advocates carbon "cap and
trade." I'm all for trade. But there's less talk about the "cap" part. That's the government force part. Will chimney police come to your
home? Will Al Gore tell us when we can run our air- conditioners? Will a federal officer be stationed at every factory? ...If the global climate
change hysterics take over, we will pay and pay. And to what end? In Europe, where panicky politicians have forced cap and trade on their constituents..., energy now costs more, but most countries still have
failed to meet their Kyoto carbon-emission targets.
Thursday, September 6, 2007 ~ 3:30 p.m., Dan Mitchell Wrote: Which lake will yield larger, more mature fish -- a publicly owned or a privately owned lake? Why is it that herds of cows flourished and
buffalos did not? Who will care for a house better -- a renter or owner? ...In a publicly owned lake, everyone has the right to the fish. ...This
leads to overfishing because the person who tosses back an immature fish doesn't benefit himself. He benefits someone else who will keep the fish. It's a different story with a privately owned lake. The owner
needn't catch a fish in order to assert his rights and can let the fish mature. ...Private property rights force the owner to take into account
the effect of his current use of the property on its future value. A homeowner has a greater stake in what a house is worth 10 or 20 years from now than a renter. An owner would more likely make sacrifices
and take the kind of care that lengthens the usable life of the house. ...There's a completely ignored aspect of the effect of restrictions on
private property rights and that's restrictions on profits. Pretend that you're an owner of a firm. There are two equally capable secretaries that you might hire. The pretty secretary demands $300 a week while
the homely secretary is willing to work for $200. If you hired the homely secretary, your profits would be $100 greater. But what if there were a 50 percent profit tax? The profit tax reduces your rights to
profit and reduces your cost of discriminating against the homely secretary. Instead of foregoing $100 without the profit tax, you'd forego only $50 by hiring the pretty secretary. The more the cost of
doing something goes down, predictably, the more people will do of it. Wherever private property rights to profits are attenuated, we expect more choices to be made by noneconomic factors such as race and
other physical attributes.
Wednesday, September 5, 2007 ~ 10:16 p.m., Dan Mitchell Wrote: ...under a Conservative Government there will be real increases in spending on public services, year after year. The charge from our
opponents that we will cut services becomes transparently false. ...There will also be no election promises of up-front, unfunded tax cuts. Any reduction we offer in one tax will have to be matched by a tax rise
elsewhere.
Wednesday, September 5, 2007 ~ 7:42 p.m., Dan Mitchell Wrote: Just a few months after Bulgaria joined the European Union, the Government of Prime Minister Sergey Dmitrievich Stanishev has
agreed a tax reform introducing a flat tax rate of 10%. ...the Presidents of the two Bulgarian affiliates, Dr Jeliazko Hristov (Confederation of Independent Trade Unions of Bulgaria - CITUB) and Dr Konstantin
Trenchev (Confederation of Labour - PODKREPA) declared their strong opposition to this tax reform... At a joint press conference yesterday (2/9/07) in Sofia, ETUC Deputy General Secretary Reiner
Hoffmann stressed that flat taxes are in clear contradiction to the principles of the European Social Model. "From experience in other EU Member States there is no evidence that flat taxes improve
competitiveness, but on the other hand they will put welfare systems and public services under pressure," he said. "Only countries with decent and graduated tax systems, like those in Scandinavia for
example, will meet the Lisbon targets of economic competitiveness, social cohesion and environmental sustainability."
Tuesday, September 4, 2007 ~ 1:05 p.m., Eugene Slaven Wrote: There's a more fundamental question that I'd put to the pope: Should the Roman Catholic Church support the welfare state? Or, put more
plainly, should the church support the use of the coercive powers of government to enable one person to live at the expense of another? Put even more plainly, should the church support the government's taking
the property of one person and giving it to another to whom it doesn't belong? When such an act is done privately, we call it theft…The pope
might say that the welfare state reflects the will of the people. Would that mean the church interprets God's commandment to Moses "Thou
shalt not steal" as not an absolute, but as "Thou shalt not steal unless you got a majority vote in parliament or congress"?...I share Pope
Benedict's desire to assist our fellow man in need. But I believe that reaching into one's own pocket to do so is praiseworthy and laudable. Reaching into another's pocket to assist one's fellow man in need is
despicable and worthy of condemnation. Editor's Note: Dr. Williams' takes the time to praise the hard work of the Center in this column when he states: "The OECD demands these nations, as well as offshore financial centers in the Caribbean and the Pacific, in effect surrender their fiscal sovereignty and act as deputy tax collectors for nations like France and Germany. This would be a dream for politicians and bad news for the world's taxpayers; fortunately the hard work of the Center for Freedom and Prosperity has stymied the OECD's proposed tax cartel."
Tuesday, September 4, 2007 ~ 12:30 p.m., Dan Mitchell Wrote: If the Conservatives were to win the next British General Election, one UK company who specialises in tax haven properties says that it could
affect property prices in both Andorra and Monaco, and the number of UK citizens taking residency in one of Europe's top two tax havens. 'Inheritance tax is a motivator for some people looking for a tax
haven', they say, 'Some UK residents who have a property worth a million pounds and more want to try and leave that and their other assets to their children, and not to the taxman. It's not a significant
number - perhaps ten per cent of our clients have this motivation - but should inheritance tax be abolished it would be enough to slow the property markets for tax havens.
Monday, September 3, 2007 ~ 2:35 p.m., Dan Mitchell Wrote: ...the Reagan economic philosophy of lower taxes, less regulation and free trade has never been more in vogue abroad -- so much so that it
has become the global economic operating system. ...nations of old-Europe seem to be in a sprint to see which country can get their tax
rates lowest quickest. Nicholas Vardy, the editor of "The Global Guru" economic newsletter calls the phenomenon "Europe's Reagan
Revolution." ...Austria cut its corporate tax rate to keep pace with its neighbor, Slovakia which recently adopted an 19% flat tax. Singapore
is cutting taxes to compete with its 16% flat-tax rival Hong Kong. Northern Ireland wants to cut its tax rates so that it can compete with the economic gazelle of Europe, the Republic of Ireland. In 1988 Ireland
was a high-unemployment stagnant economy with a 48% corporate tax rate, today that rate is 12.5% and the rest of the world is now desperate to match its economic results. Meanwhile German Finance Minister
Peer Steinbrueck sold the latest tax cuts as "an investment in Germany as a business location." ...it is a testament to the Reagan economic
revolution launched in 1981 that, a quarter century later, global tax rates are 25 percentage points lower on average today than in the 1970s. And those figures don't even include this latest round of
chopping under Reaganomics 2.0. The enactment of supply-side policies is helping ignite one of the strongest and longest world-wide economic expansions in history.
Monday, September 3, 2007 ~ 2:03 p.m., Dan Mitchell Wrote: New Jersey has secured another dubious distinction. It is the first state in the nation to experience a decline in cigarette tax revenues after
increasing the cigarette tax. This fact illustrates it is possible to overtax an economic activity. When their costs are increased, rational producers and consumers will protect their economic interests. Workers
will move to jurisdictions that tax their labor and wealth less and consumers will purchase goods in venues where prices are cheaper. It's
not only the cigarette tax that illustrates this point. Revenues from New Jersey's two largest taxes - on income and sales - also suggest that tax
hikes aren't always as lucrative as expected. To support the Fiscal Year 2007 state budget, Gov. Corzine successfully proposed increasing the cigarette tax by 17.5 cents, from $2.40 to 2.575 per pack. It was the
fourth tax increase in a six-year period and it made New Jersey's tax the highest state tax in the nation. Here was the result: In FY 2006, the
cigarette tax raised more than $787 million. In FY 2007 - after it was hiked by almost 7 percent - the tax raised only $764 million, or $23 million less than the previous year. ...While New Jersey's sales are
plummeting, Delaware's are increasing. And it's certainly not the case that more Delaware residents are becoming smokers. Also, some smokers make purchases via the Internet. Others even buy in the black
market, which owes its very existence to New Jersey's steep tax.
Monday, September 3, 2007 ~ 12:51 p.m., Dan Mitchell Wrote: Finance experts and business people are pointing out that Poland is surrounded by countries with low, flat tax rates. If Polish governments
refuse to grasp the nettle and lower tax, investment might just head abroad. In East Central Europe, flat tax rates have already been introduced in Slovakia, Lithuania, Latvia, Ukraine, Estonia, Russia and
Romania. Soon the list will also include the Czech Republic. ... "If ]Poland] doesn't introduce it, the country lose the foreign investment
battle, we'll be less and less competitive", Peter Kay, financial expert from KPMG, a worldwide consultancy was quoted in Poland's Dziennik daily.
Sunday, September 2, 2007 ~ 1:44 p.m., Dan Mitchell Wrote: The reform treaty will explicitly commit European governments to defend and strengthen the European social model. It will enshrine the
values of social justice, full employment and solidarity in the EU's "mission statement" and commit the EU to "a social market economy,
aiming at full employment and social progress". Similarly, the treaty emphasizes that the EU must work to "combat social exclusion and
discrimination", and will be legally required to promote social justice, gender equality and solidarity between generations. It is values such as
these that clearly differentiate the EU from the American model of capitalism that allows private wealth and public squalor. …The overwhelming majority of our socialist colleagues across Europe
support the reform treaty, despite some reservations, precisely because it will enshrine the European social model. IMF study World Bank study CIA World Factbook OECD study Economic Policy Institute study -- See Figure 8D (page 25)
Sunday, September 2, 2007 ~ 12:30 p.m., Dan Mitchell Wrote: Bulgaria will definitively join the pool of European countries who have adopted a flat tax, beginning next year, Bulgaria's ...Now that a quarter
of Europe is painted in flat-tax colours and a number of nations have brought about dramatic increases in foreign direct investments as a result of its introduction, the opposition to flat tax, both on a
parliamentary and expert level, has been waning. ... The rates for both personal and corporate taxable income are likely to be set at 10 per
cent, although talks are under way about fixing it at 12 per cent. This will be the lowest tax rate in Europe. It will be equal only to the rate in
Albania, which is also due to introduce a flat tax in January 2008. ... Advocates of the idea hope Bulgaria will duplicate the success of Slovakia. The country enacted the 19 per cent corporate tax rate in
2004 and since, the once struggling offspring of the disintegration of former Czechoslovakia, has attracted dozens of billions of euro in investments to the country, which has a population of six million. The
landmark investments of South Korean car-maker Hyundai, the Japanese consumer electronics producer Sony, both in excess of one billion euro, have also prompted the creation of the so-called business
clusters as dozens of Hyundai-Sony sub-contractors have followed suit with multi-million factory construction plans. The volume of investments has also gone hand-in-hand with growing employment
levels and GDP growth that had no parallels in the past year. In 2006, growth hit nine per cent, to the surprise not only of foreign, but also of
local analysts. ... the experience of other countries shows a low flat tax is said to encourage a number of entities, both individuals and companies, into emerging from the grey sector. If for only the reason
that the taxes they will pay are already be perceived as the "smaller evil" when compared to the charges they pay, when there is progressive tax system, to avoid paying tax.
Saturday, September 1, 2007 ~ 6:41 p.m., Dan Mitchell Wrote: How much money has Uncle Sam spent on New Orleans and the Gulf region since Hurricane Katrina? ...a monstrous $127 billion. ...Where in
the hell did all this money go? Well, the White House fact sheet says $24 billion has been used to build houses and schools, repair damaged infrastructure and provide victims with a place to live. But isn't
everyone complaining about the lack of housing? Perhaps all this money should've been directly deposited in the bank accounts of the 300,000 people living in New Orleans. All divvied up, that $127 billion
would come to $425,000 per person! ...The idea of using federal money to rebuild cities is the quintessential liberal vision. And given the dreadful results in New Orleans, we can say the government's $127
billion check represents the quintessential failure of that liberal vision. ...Remember President Reagan's line during the 1980 campaign about how LBJ fought a big-government spending war against poverty, and
poverty won? Well, think of all this Katrina spending as the Great Society Redux. And it failed. I suppose the current Bush administration
would like to label this "compassionate conservatism." But guess what? That failed, too.
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