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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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Thursday, January 31, 2008 ~ 1:00 p.m., Eugene Slaven Wrote: Bill Gates, bloviating at the World Economic Forum in Davos, Switzerland, is issuing a clarion call for a "kinder capitalism" to aid the world's poor. Gates says he
has grown impatient with the shortcomings of capitalism. He thinks it's failing much of the world. This, of course, from a guy who's worth around $35 billion (give or take a billion)…A guy without a college
degree who invented a new technology process in his garage that literally changed the entire world, a guy who took advantage of all the great opportunities that a free and capitalist society has to offer and got
filthy rich in the process, is now trashing capitalism and telling us it doesn't work…For all his do-good preaching, Gates is ignoring the global spread of free-market capitalism that has successfully lifted
hundreds of millions of people out of poverty and into the middle class over the last decade. Think China. Think India. Think Eastern Europe…Gates wants business leaders to dedicate more time to fighting
poverty. But the reality is that economic freedom is the best path to prosperity…Gates says he has witnessed steep income and cultural inequities in his travels around the world, in particular to Africa. But for
this he should blame the absence of capitalist principles, not capitalism itself. Even the most compassionate corporate executives are not going to bring prosperity to impoverished countries with statist
economies. Until Africa's nations undertake the market-oriented reforms that have boosted China and the other Asian Tigers -- like South Korea and Taiwan -- they will continue to rank at the bottom of the world
prosperity scale…The reality here is that the rising tide of global capitalism is lifting all boats that employ it. Capitalism works. It's a good thing. It's the key to unlocking a nation's prosperity. In fact,
free-market capitalism is the greatest anti-poverty program ever devised by man…Look fellas, the command-and-control, state-run economics experiment was tried. It was called the Soviet Union. If you hadn't
noticed, it was a miserable failure.
Thursday, January 31, 2008 ~ 12:03 p.m., Andrew Quinlan Wrote: It takes 15 Oklahomans in the private sector to fund one Oklahoma state government job. In total, for 2006, there were 83,769 state government
workers in Oklahoma earning $3,519,178,000-or an average of $42,011 on a per-job basis. As a result, it would take a total of 1,281,682 private
sector jobs to fund Oklahoma's state bureaucracy-slightly more people than were employed in the private sector in 2006 (1,266,179). Oklahomans are paying dearly for these 83,769 state government
employees in the form of higher taxes. According to recent research by OCPA, Oklahoma state government has 28,748 too many jobs when compared to the national state employment average. Eliminating these
jobs would have saved Oklahoma's taxpayers up to $1,207,715,398 in 2006.
Thursday, January 31, 2008 ~ 10:41 a.m., Dan Mitchell Wrote: Macedonia has introduced Europe's most aggressive package of pro-growth tax reforms - advertising itself in The Economist as Europe's
"business heaven." Here's how they do it in paradise. Macedonia's personal flat-tax rate, effective Jan. 1, dropped to 10 per cent. Its
corporate flat-tax rate dropped to 10 per cent. (Its corporate rate on re-invested profits dropped to zero.) ...Companies can complete the legal
requirements of registration within four hours. Last year, the government enacted laws making it easier to fire and to hire - in contrast to Establishment Europe, where the firing of incompetent workers has long
been effectively prohibited. The World Bank, in its 2008 Doing Business report, ranked Macedonia as the No. 4 (out of 10) "reformer nations" in
the world, recognition that prompted a joyful national celebration. ...The European Commission...has worked for years to forbid EU countries - 27
of them now, and counting - from competing on corporate tax rates, a policy that now gets expressed in the EU quest for a single EU-wide tax
rate. ...The commission established high corporate tax rates as a matter of principle as early as 1996 in a tax policy "code of conduct." One article
stipulates: "Tax measures which provide for significantly lower effective levels of taxation (including zero taxation) are to be regarded as harmful and therefore covered by this code."
Wednesday, January 30, 2008 ~ 7:00 p.m., Dan Mitchell Wrote: One of the most dangerous proposals is now moving through the House of Representatives. The Emergency Home Ownership and Mortgage Equity
Protection Act was voted out of the Judiciary Committee recently. It takes aim at Chapter 13 bankruptcy proceedings to make it easier for
buyers to rewrite the terms of their mortgage contracts in court. It would do this by changing how a debtor's principal residence is treated in
bankruptcy, allowing mortgage contracts to be modified by the courts. In short, if this bill becomes law a mortgage would no longer be a matter between a borrower and a lender, but instead, between a borrower, a
lender and a judge. Rather than interpreting private contracts, judges would suddenly be able to rewrite them. Current bankruptcy law has existed for more than 100 years, and was designed to promote
homeownership by making mortgages secure from outside meddling. Strong contracts make for a vibrant mortgage industry. Weakening mortgage contracts would endanger the future of American
homeownership by making it harder for homebuyers to obtain a loan. ...By introducing uncertainty into mortgage contracts, this rule change would make it harder and more expensive for buyers to get a mortgage.
The Mortgage Bankers Association recently estimated that, if this reform becomes law, borrowers will have to start putting down 20% on a home
to get a loan, which is much higher than today's standard. So in their efforts to cushion the fall of a few, advocates of this reform would raise costs on an untold number of future mortgage seekers. ...Only in
Washington, where a billion dollars is treated as pocket change, could a change affecting millions of current and future homeowners, as well as
the stability and success of the entire mortgage market, be referred to as "a tweak."
Wednesday, January 30, 2008 ~ 6:06 p.m., Dan Mitchell Wrote: Bulgaria and Albania joined Russia, Slovakia, Romania and nine other Central and Eastern European countries by adopting a flat tax system at the beginning of the year. Four of Hungary's seven neighbours have already chosen the flat tax option. In fact, flat tax is now the preferred system among the post-communist economies of Central and Eastern Europe. Is Hungary - already suffering the lowest rate of economic growth of the new EU member states - in danger of being left behind? ...To western Europeans, this may sound like the utopian stunt of a madman, but in fact flat tax policies - until recently little more than a theoretical notion dreamt up by economists - have rapidly caught on in the developing economies of central and Eastern Europe since Estonia opted for the novel system in 1994. In addition to explaining how the flat tax improves tax compliance, the article notes that many companies are relocating in Slovakia because that country's tax system is much more conducive to productive activity. The Hungarian fiscal system, by contrast, is very punitive: With a flat rate of tax, regardless of how much a person earns, he pays the same proportion of his wage to the state. With progressive tax, a pay rise can lead to an increase in the percentage claimed by the government. ...a simple, low-rate tax which is easy to collect and difficult to evade is likely to raise more money than a high-rate tax system that is full of loopholes and which nobody fully understands. ...Compare Hungary with Slovakia. Hungary's northern neighbour has opted for the purest of flat tax systems. Employers' and employees' income tax contributions are fixed at 19%, as is corporate tax and even VAT. Thousands of Hungarian companies have already relocated their headquarters to Hungarian-speaking southern Slovakia - not only are taxes lower, but accounting has been made child's play. Hungarian employers must pay 16% income tax and 29% social security on payroll, while employees pay between 18% and 36% income tax plus a host of social and other contributions. The net result of this is that the government receives up to double what the employee takes home. Even though Hungary's growth rate is sluggish and the nation is losing jobs and investment to other nations with better tax systems, the politicians are stubbornly refusing to join the flat tax revolution. This is bad news for Hungary's workers: The small, conservative opposition party the Hungarian Democratic Forum has long been calling for the adoption of a flat tax model. Party
leader Ibolya Dávid argued last year, when the Czech Republic chose to follow its southern neighbour Slovakia into the flat tax world, that
Hungary risks losing out in the battle for foreign investment and lagging behind if it does not follow suit. ...Earlier this year, it was reported that
two of four possible alternatives included the adoption of a flat tax model. However, last week Magyar Hírlap reported that the cabinet working group had ruled out any such move.
Tuesday, January 29, 2008 ~ 6:38 p.m., Dan Mitchell Wrote: When there is a growing disparity between one statistical category and another statistical category over time, that does not mean that there is a
corresponding growing disparity between flesh-and-blood human beings over time, since human beings move from one statistical category to another. ...taxpayers whose incomes were in the bottom 20 percent in
1996 had a 91 percent increase in incomes by 2005. Meanwhile, taxpayers in the top one-hundredth of one percent -- "the rich" or "superrich" if you
believe politicians and the media -- had their incomes drop by 26 percent over those very same years. ...These are not the only data that tell a
diametrically opposite story from the usual political and media story that the rich are getting richer and the poor are getting poorer. A previous
Treasury Department study showed similar patterns in individual income changes between 1979 and 1988. ...The University of Michigan Panel Survey on Income Dynamics showed that, among people who were in the
bottom 20 percent income bracket in 1975, only 5 percent were still in that category in 1991. Nearly six times as many of them were now in the top 20 percent in 1991.
Tuesday, January 29, 2008 ~ 5:51 p.m., Dan Mitchell Wrote: ...the EU likes to say it has consulted "civic society" when all it has done is talk to a number of front organisations funded by itself. Now, it seems
the British Foreign Minister is doing something similar. ...Defending the European Constitution Lisbon Treaty at the Dispatch Box yesterday,
David Miliband told MPs: "The NSPCC pledged its support, as have One World Action, Action Aid and Oxfam". He added: "Environmental
organisations support the treaty provisions on sustainable development and even the commission of bishops supports the treaty. This is a coalition
not of ideology, but integrity". Integrity, eh? It'll be interesting to know, then, how many of these organisations is in receipt of EU subventions.
...Yup: an organisation funded by the EU believes - get this - that the EU should have more power. ...Miliband is simply doing what Eurocrats
always do. Back in November, I blogged about a meeting in Brussels for 500 "representatives of civil society" almost all of whom seemed to
represent EU-funded NGOs. I put down a written question at the time asking the Commission which ones it was paying. The relevant Commissioner, Sweden's Margot Wallström, refused to answer, telling me
that the meeting was organised by the Parliament and was none of her business.
Tuesday, January 29, 2008 ~ 3:29 p.m., Dan Mitchell Wrote: ...the results are in on America's 30-year experiment with radical economic deregulation. Income inequality has risen to levels not seen since the 1920s...
there is an emerging Democratic consensus standing in sharp contrast to the laisser faire Republican approach. ...a mature capitalist economy is as likely to
suffer from too little regulation as from too much. ...Republican counterparts continue to advocate the hands-off approach pursued by the Bush
administration. As a result, we are likely to have a healthy debate about the role of government in supporting a robust capitalist economy in the 21st century. It
is important to note that this debate is not about policy details but represents fundamentally different views about the nature of our modern economy. I
believe the American people will decide that we should enact policies that seek to curb growing inequality and provide some check on market excesses. If Congressman Frank wanted to have an honest discussion of regulatory issues, he should have compared the economic records of administrations that pursued (or allowed) laissez-faire policies to those that followed a more statist approach. But that would have led to some inconvenient truths since it would have pitted the economically-successful Reagan and Clinton Administrations (see http://www.examiner.com/a-619991~Daniel_J__Mitchell__Bring_back_Clinton.html to read about a remarkably good record on non-tax economic issues) against less market-friendly regimes such as Nixon, Carter, Bush I, and Bush II. But give the Congressman credit. By focusing on party identification rather than actual policies, he can blame free markets for the bad consequences of statist policies. Walter Williams exposes this tactic in a column on the subprime lending mess, noting that much of the problem is the result of government intervention and that Bush's proposals will make things worse - and eventually lead to calls for more government: Encouraged by the housing bubble, easy credit, along with the expectation that housing prices would continue to appreciate, many
subprime borrowers took out mortgages they could not afford in the long run, particularly if interest rates rose and housing prices depreciated. As
with most economic problems, we find the hand of government. The Community Reinvestment Act of 1977...encourages banks and thrifts to make loans to riskier customers. ...President Bush's plan to deal with the
subprime crisis is to freeze interest rates on adjustable rate mortgages. Freezing interest rates would stop people's mortgage payments from
increasing. That is a gross violation of basic contract rights and would appear to be a Fifth Amendment violation. If a contractual agreement is
willingly entered into and agreed upon by a borrower and lender, it is binding and if broken by one party or the other, harsh penalties should ensue. Now here comes government, under the Bush plan, to declare
millions of contracts null and void. The long run effect of the Bush plan is to make lending institutions even more selective in choosing borrowers.
Then there's the question: If government can invalidate the terms of one kind of contractual agreement where the borrowers can't pay, what's to say that it won't invalidate other contractual agreements where the
borrowers encounter hardship and what will that do to financial markets? The Bush bailout, as well as Federal Reserve Bank cuts in interest rates, is
a wealth transfer from creditworthy people and taxpayers to those who made ill-advised credit decisions, and that includes banks as well as borrowers. ...Government policy got us into the subprime mess and
government's measure to fix the mess is going to create more mess.
Monday, January 28, 2008 ~ 8:49 p.m., Dan Mitchell Wrote: [Gordon Brown's] reckless plan to crack down on Britain's 114,000 non-domiciled residents, including many of the City's most important
financiers, will be the most damaging in a long list of spectacularly ill-timed tax hikes due this year. Even the Treasury now admits that 3,000
non-dom expats will leave Britain in April, when the changes, including a £30,000 annual poll tax, are due to kick in. This is a truly remarkable
admission, of which far too little has been made. Given how hard all economies, including Britain, strive to attract high-net-worth investors and the highly skilled these days, it is difficult to fathom why any
government in its right mind would wish suddenly to begin penalising those it has sought to woo for so long. What is most absurd about this is
that the Treasury readily acknowledges, in the very same document laying out its tax hike plans, that 'in an increasingly globalised economy it is
crucial for the UK's competitiveness that the UK continues to attract international talent to this country'. …Brown is now considering adding
an attack on offshore trusts to his poll tax plans, a development which has brought a smile to the faces of relocation experts. To the expatriate community and their wealth managers, the attack announced in the
Pre-Budget Report now looks as if it was merely the first salvo in a long war of attrition. …the assault on the non-doms is going hand in hand with
a hike in capital gains tax, a rise in corporation tax on small companies, and a crackdown on the 29,000 non-residents who commute most weeks
from Monaco or the Isle of Man. All of these changes add up to a simple message to the skilled, hard-working and above all footloose international
talent to which today's Britain owes so much of its success: don't bother coming here, we don't value you any longer. …Tax lawyers are starting to
warn their clients seeking to relocate to Britain that the current volley of tax hikes is likely to be merely the thin edge of a much more punitive
wedge. Brown's attack on the non-doms could easily become Brown's very own Sarbanes-Oxley, the ultra-onerous piece of post-Enron legislation in America which chased away hundreds of companies to more
welcoming shores. But what is most distressing to non-doms currently based in the City, and to many of those considering moving here, is that
the Tories support an almost identical policy. …It is, of course, a myth that non-doms pay no tax... Money earned in Britain is subject to the
usual tax; non-doms pay £4 billion in UK income tax a year. Stonehage, the wealth management com- pany, believes they spend around £16.6 billion a year in the UK and pay £2.9 billion in VAT and £308 million in
stamp duty. The Treasury calculates that non-doms contribute some £12 billion to national income (roughly 1 per cent of the total, which demonstrates that they punch hugely above their weight). …the tax
burden should be reduced for everyone over time, thus ensuring that it becomes once again globally competitive without the need for special
privileges. That, unlike Brown's deeply misguided class warfare, would be a policy well worth supporting.
Monday, January 28, 2008 ~ 6:14 p.m., Dan Mitchell Wrote: A study conducted for the German finance ministry has concluded that an EU-wide tax would lead to unfair differences between EU citizens and
that the resulting correction mechanisms would make it too complicated to introduce. …It says that "only a few of the discussed tax types would
be really visible," and that the EU spending institutions having spending power is "is no desirable objective", since it is likely to lead to softer
budgetary constraint. …The study comes after the European Commission last year launched a "no taboos" discussion on reforming the EU budget,
which is based on GNI-related contribution, VAT, customs duties and member state fines. …The Mannheim researchers say they are against a
"revolutionary upheaval" of the current system, saying the strong link between EU and national budgets establishes a strong incentive "for fiscal discipline at the EU level."
Sunday, January 27, 2008 ~ 2:42 p.m., Dan Mitchell Wrote: Government cannot create genuine spending power; the most it can do is to transfer it from Smith to Jones. If the Treasury sends a stimulus check to Jones, the money comes from taxes, from borrowing, or is newly created. If it comes from taxes, the value of Jones's stimulus check is offset by the greater taxes paid by Smith, who will then have fewer dollars to spend or invest. If Uncle Sam borrows to pay for the stimulus checks, this borrowing takes money out of the private sector. Any dollars borrowed - whether from foreigners or fellow Americans - for purposes of stimulus would have been spent or invested in other ways were they not loaned to the government. The only other means of paying for such stimulus is for the Federal Reserve to create new money. Unfortunately, this option leads inevitably to inflation. ...Spending power is not so much the fuel for economic growth as it is its reward. And the key to economic growth is investment that raises worker productivity. Professor Boudreaux then explains the types of policies that will boost growth, both in the short run and long run. Smaller government on both the tax side and spending side of the fiscal equation would be very helpful, he explains, and he also makes the critically important point that an easy-money policy from the Fed is the wrong approach: Mr. Bush should call for a substantial and permanent cut in both capital-gains and personal-income tax rates. ...Cutting taxes is, of course,
a good thing, but it's important to know why. The goal would not be to increase consumer spending. Instead, it would be to raise the returns on
investment and work. By letting investors and workers keep more of the fruits of their risk-taking, creativity, and efforts, the economy will enjoy
more risk-taking, creativity, and effort. Businesses that would otherwise not be started would be created. ...Cutting government spending would
result in more of the economy's resources being used by wealth-creating businesses rather than being siphoned away to special-interest groups and boondoggles such as bridges-to-nowhere and Woodstock museums.
...Finally, Bush should assure the Board of Governors of the Federal Reserve that he neither expects nor wants them to use monetary policy politically. Reminding them of the wisdom of Milton Friedman, he should
strongly urge them to keep a tight rein on the money supply.
Saturday, January 26, 2008 ~ 6:03 p.m., Dan Mitchell Wrote: France is planning to freeze public spending for five years under its biggest programme of social and economic reform since the late 1960s,
according to François Fillon, the prime minister. ...The government has said it wants to eliminate its deficit and reduce spending as a share of
national output - the highest in the EU at 53.5 per cent - during Mr Sarkozy's first five-year term... Mr Fillon did not say whether he was planning a real-terms or nominal freeze, nor whether it would encompass
France's indebted social insurance system. He admitted that France would only eliminate its deficit "if we do the underlying structural reforms, which would allow us to reduce in a much more significant way
public-sector employment and public spending". ...Mr Fillon has been credited with keeping Mr Sarkozy's government focused on repairing
France's precarious public finances and cutting welfare and pension costs. Assuming Sarkozy's government fulfills this pledge, France will take a big step in the right direction. With any luck, maybe American politicians then would do something similar. The same policy, if adopted in America, would reduce the burden of federal government spending from more than 20 percent of GDP today to 15.9 percent of GDP (with a hard freeze) or 17.8 percent of GDP (with an inflation-adjusted freeze) after five years.
Friday, January 25, 2008 ~ 8:21 p.m., Dan Mitchell Wrote: Senior EU tax officials, including European Tax Commissioner Laszlo Kovacs, are preparing to make a fresh approach to Asian financial
centres, in a bid to have them included within the ambit of the European Savings Tax Directive. According to a report from Reuters, Kovacs is
scheduled to visit Hong Kong later this month, while other senior officials will launch a new charm offensive in the territory of Macau and the
city-state of Singapore. The directive, which extends to a number of 'third countries' such as Switzerland, the Channel Islands and Caribbean
offshore territories, facilitates the exchange of information between EU tax authorities on certain types of savings and investments held by EU
residents in their territory, so that interest earned can be taxed in the resident investor's home state. … while the EU was effectively able to
bully smaller territories such as those in the Caribbean with colonial links to member states like the UK and the Netherlands, the Asian territories
have no such ties binding them to Europe. Unsurprisingly, EU officials have already received frosty responses from Hong Kong and Singapore
regarding the issue, and little is expected to have changed. In the case of Hong Kong, signing up to the savings tax directive could mean altering
the Basic Law which safeguards the future of its financial centre under Chinese rule. Singapore on the other hand, is known to be staunchly opposed to the idea of sharing bank account information with the EU,
and has rejected European overtures to include information exchange provisions within a broader economic agreement. The European Commission is currently reviewing the operation of the savings tax
directive and is likely to make several recommendations for tightening up the legislation that would make it harder for EU-based investors to
legitimately side-step the law - for example by moving assets from bank accounts to vehicles such as companies and trusts - which weren't included in the legislation - or by shifting money to accounts based in
territories out of the reach of the directive's information sharing provisions.
Friday, January 25, 2008 ~ 7:34 p.m., Dan Mitchell Wrote: The European Commission has pointed to unhealthy public spending in the US as the main cause of the current global market turbulences and
urged Washington to cut expenditure and boost savings, while praising Europe's own "solid and sound" economy and the positive effect of the
common currency. …Mr Almunia suggested that US policy-makers should tackle the current crisis with measures that would secure "reducing the
external deficit and the fiscal deficit, and increasing domestic saving in the US both in the public and the private sectors." He maintained that
Europe's own previous reforms and pressure for cuts in public finances have paid off, leaving the fundamentals of the bloc's economy - in
contrast to the situation across the Atlantic - as "solid and sound".
Thursday, January 24, 2008 ~ 9:00 p.m., Dan Mitchell Wrote: Although Ireland's tax rates are relatively low by international standards, an increasing number of high-net-worth individuals are deciding to leave
the country of their birth and move to places with more welcoming and forgiving tax regimes. ...New figures prepared by the Revenue Commissioners finally reveal just how many tax exiles have decamped
Ireland for other jurisdictions. According to new figures obtained by The Sunday Business Post, there are 19 high-net-worth individuals who are
Irish domiciled but who are legally non-resident for tax purposes. The figures, from the Department of Finance, only includes individuals whose
net worth (their assets less their liabilities) is valued at more than EUR50 million. ...Of the top 20 individuals on the Irish Rich List, at least half are
tax resident outside Ireland. John Magnier and JP McManus, the Irish horseracing tycoons, are both based in Geneva, as is Hugh Mackeown, the chairman of the Musgrave Group, the EUR4.6 billion Cork retail
giant. Michael Smurfit, the packaging magnate, is the honorary Irish consul to Monaco, while dancer Michael Flatley also pays his tax in the
principality. Billionaire financier Dermot Desmond officially resides in Gibraltar. ...The 19 names on the list are just the top of the tax exile iceberg, however. According to the Department of Finance, it only
includes individuals who filed an annual return in Ireland for the 2005 financial year. ...It is not just the high rollers who are relocating to tax-efficient economies. According to the Revenue Commissioners,
Ireland now has more than 3,000 tax exiles who claim non-residency. Many of these individuals are not in the top 250, but have serious wealth nonetheless.
Thursday, January 24, 200 ~ 6:38 p.m., Dan Mitchell Wrote: ...in recent months, Obwalden, whose population accounts for just 34,000 of Switzerland's 7.5m total, has been punching above its weight.
Desperate to stem a haemorrhage of business and wealthier residents to more cosmopolitan places, the Christian Democrat-dominated cantonal government has turned to taxation to stop the slide. ...the government
[adopted] an ultra-low, flat-rate tax - that took effect on January 1 this year. The move has attracted attention beyond Switzerland's borders. The European Commission has taken issue with its most prominent
non-member on the allegation that Switzerland's differential cantonal taxes put European Union companies at a disadvantage. Some EU countries have also been riled by Switzerland's ability to attract
high-profile millionaires through one-off tax deals. Last year, Johnny Halliday, the ageing French rock star, became the latest in a stream of
foreigners to up sticks. ...Proponents argue that allowing cantons, and even individual towns and villages, to set their own rates stimulates
competition and keeps taxes down by boosting efficiency. ...The reduction in corporation tax to 6.6 per cent, and a further cut to 6 per cent from
January 1, has led to a fivefold increase in the number of new companies setting up in both 2006 and 2007. While Mr Wallimann concedes many are just letterbox operations, some have created genuine jobs. He says
there has been no rancour with other cantons or accusations of beggar-thy-neighbour policies. "Everyone in Switzerland understands tax competition. It keeps everyone on their toes.
Wednesday, January 23, 2008 ~ 5:51 p.m., Dan Mitchell Wrote: While the right to travel free of government constraints has long been considered a fundamental freedom in America, in the eyes of the current
administration of George W. Bush and Mr. Chertoff, this clearly is no longer seen as the case. In recent remarks about carrying out the 2005 Real ID Act, Mr. Chertoff put state governments and American citizens
alike on notice that no opposition would be tolerated in complying with the mandates of the federal law, even if it means citizens of those states
expressing concerns about the law's provisions will be unable to board commercial aircraft. While disingenuously professing no desire to
"punish" citizens because the government of the state in which they live might not be ready to jump onto the federal government's Real ID
bandwagon, Mr. Chertoff said this was precisely what the department would do. In a refrain distressingly typical of how this administration
routinely treats notions of federalism and individual liberty, last Friday Mr. Chertoff said, "The last thing I want to do is punish citizens of a state
who would love to have a Real ID license but can't get one, but in the end, the rule is the rule." ...In fact, a growing number of states - worried by the
program's burgeoning costs (estimated at up to $17 billion) and the specter of subjecting huge quantities of private information about citizens
to access by the federal, other states' and possibly foreign governments - have passed legislation opting out of the program or have set conditions for their participation.
Wednesday, January 23, 2008 ~ 5:34 p.m., Dan Mitchell Wrote: EU top officials along with employment and social affairs commissioner Vladimir Spidla on Friday went to Beijing to advocate improvement of
social welfare and worker protection. ..."If we talk to them about health and safety at work, about social security and they see themselves that
there is a necessity to change things in order to have a sustainable economy in the long-term that will also decrease possibilities for social
dumping," said Mr Spidla, according to AFP. "If they decide to copy the European pension model, it means they consider it to be the best," he
continued. Social dumping - when countries with weak labour and safety standards export cheap goods to a state with more rigorous legislation and protection - is a strong point of contention between Brussels and
Beijing. ...Mr Spidla said he hoped the EU's dialogue would "help China develop modern systems of social security."
Tuesday, January 22, 2008 ~ 9:51 p.m., Dan Mitchell Wrote: In 2001, just as they are today, Democrats were playing the "two Americas" card and clamoring for "stimulus." And Bush pretty much
agreed to the same thing Congress is talking about doing now: Give some small tax breaks, extend jobless benefits and add a $600 rebate. But it
didn't really stimulate much. True enough, the economy pulled out of recession. But growth for two years was anemic, and business investment
actually fell. Job growth was also weak. In 2003, Bush went back at it, asking for and getting much larger across-the-board tax cuts - including
significant reductions in both capital gains and personal taxes. In other words, the kinds of cuts that boost incentives to work, save and invest, and make it easier for businesses to raise capital. Those worked
remarkably well. ..."stimulus"...merely takes money from one taxpayer's pocket and puts it in another's. That's not a stimulus; that's a shell game.
It adds a flurry of short-term activity, but doesn't boost output. What should Congress and the president do? The best thing would be to make sure the tax cuts put in place by Bush in 2003 don't expire in 2010.
Meanwhile, Bruce Bartlett explain in the pages of the Wall Street Journal why Keynesian-style tax rebates are completely ineffective: ...there is virtually no empirical evidence that tax rebates are an effective response to economic slowdowns. The increased personal saving doesn't
help the economy because the federal budget deficit, which can be thought of as negative saving, offsets all of it in the aggregate. The main
benefit of a tax rebate would seem to be political -- giving politicians a way of appearing to be doing something about the nation's economic
problems that is superficially plausible. A new rebate probably won't do much harm. But anyone who thinks it will prevent a recession -- if one is
actually in the pipeline, which is not at all certain -- is dreaming. It's an insult to Keynes even to call a tax rebate Keynesian economics. It should
be called "feel good economics" because its only real effect is to make politicians feel good about themselves and buy re-election with the public purse. Last but not least, a Wall Street Journal editorial is disappointed that the Chairman of the Federal Reserve has kowtowed to the political class by endorsing foolish policy. The editorial notes the inherent fallacies of transferring money from one pocket to another and warns that the looming sunset of the supply-side tax cuts is the real threat to the economy: Mr. Bernanke embraced the explicit Keynesian notion that the government should write checks to "low and moderate income people,"
who will spend it quickly and thus lift consumer demand. ...But the $250 or $500 one-time rebate check they may now receive has to come from somewhere. The feds will pay for it either by taxing or borrowing from
someone else, and those people will have that much less to spend or invest themselves. We are thus supposed to believe it is "stimulating" to take
money from one pocket and hand it to another. ...A fiscal stimulus that really stimulates would change incentives, and do so permanently so workers and investors can know what to expect and take risks
accordingly. One problem with the increasingly "temporary" nature of the Bush tax cuts is that they are beginning to introduce new political risk
into economic decisions. ...speaking of the 1970s, what markets may really fear is that we are entering another period of "stagflation," slower
growth with rising prices, and without political or economic leaders who understand what to do about it.
Tuesday, January 22, 2008 ~ 7:12 p.m., Dan Mitchell Wrote: A 12-member commission created by Congress in 2005 issued its report Tuesday, recommending that the current 18.4 cents per gallon tax be
hiked over a five-year period by 5 to 8 cents each year. After that, the tax would be indexed to inflation. ...Certainly motorists should pay for the
roads they use. But it is patently unfair for them to subsidize users of public transportation and rail travelers. Yet they do. And more. ...no
longer are revenues from the federal gasoline tax dedicated solely to building and maintaining the interstate highway system. That changed in 1983, when a little more than a 10th of revenues were used for mass
transit. That has now tripled to 30%. But that doesn't mean that 70% of the gas tax is dedicated to paying for our highway infrastructure. One-tenth of federal transportation spending is pork. In the last
transportation bill, more than 6,000 pet projects costing $24 billion drained money away from where it was needed. In addition to paying for
unjustified political indulgences that have an air of legitimacy - remember "the bridge to nowhere"? - gas tax revenues are used to fund bike paths,
nature trails, pedestrian walkways, visitors centers, public parks, parking lots and museums. None of these is a proper function of government or an
honest expenditure of taxpayer dollars. At the end of the day, a mere 60% of the revenues are left for essential road work. The Secretary of Transportation, meanwhile, also warns about the impact of a huge tax hike while also pointing out that other nations - and even some cities and states in the U.S. - are figuring out ways to get more roads for less money by quasi-privatizing the financing and operation of highways: ...the report recommends an up-to 40-cent-per-gallon federal gasoline tax increase over the next five years, with automatic increases every year
thereafter tied to inflation. This would more than triple federal fuel taxes from current levels by 2018. The report also calls for even larger increases to state gas taxes, and the creation of a new federal
bureaucracy to centralize transportation spending decisions. It recommends new limitations on states' ability to attract billions in private
sector capital available to invest in transportation infrastructure. And it supports federal taxes on all public transportation and intercity passenger
rail trips, which, if enacted, would be the first time ever a federal tax was added to the cost of a public transportation ride. ...This past year, over 20
major cities in the U.S. have submitted proposals to the Department of Transportation to implement some form of electronic tolling that will both reduce congestion and generate needed revenue for transportation
projects. Thanks to new open-road technology, these pricing programs can be put in place without forcing a single driver to slow down to pay a
toll or have their transponder "read." Unlike much of the rest of the world -- including China, India and Europe -- as a nation we've barely
taken advantage of the billions of private-sector dollars currently available for investment in new road, bridge and other transportation projects. With the kind of encouragement we're recommending, many
more states could soon be able to pay for new transportation projects without having to increase taxes, sell new bonds or go further into debt.
California, Florida, Indiana, Texas and the city of Chicago have already raised significant new revenue and improved highways with the support
of the private sector. Just last month, Virginia announced that it had reached agreement with private investors to construct some of the most
sophisticated, variably priced lanes in the world on the Capital Beltway. The symbolism of that project's location should be lost on no one.
Monday, January 21, 2008 ~ 8:44 p.m., Dan Mitchell Wrote: Since April 2006, one in every 10 dentists have stopped offering treatment under Great Britain's national health care system. Who can blame them?
The government changed its contract with 21,000 dentists almost two years ago, and the result was more work for the dentists and limits on their earnings. Because of the shortage, 2.7 million Britons have gone
nearly two years without dental work. ...Britons who use the NHS aren't allowed to buy with their own money new and effective medication that the government can't afford. Those who do will be forced out of the
state-run system. ...Premature deaths in the U.K. due to deficiencies at the NHS topped 17,000 in 2004, more than in Spain, France, Germany and the Netherlands, says a study from the London-based Taxpayers'
Alliance.
Monday, January 21, 2008 ~ 8:16 p.m., Dan Mitchell Wrote:
Sunday, January 20, 2008 ~ 3:15 p.m., Dan Mitchell Wrote: Newly re-elected Georgian President Mikheil Saakashvili wants to slash taxes, speed privatization, ease foreign-investment rules and tap
international capital markets as part of a radical plan to shake up the economy of the Black Sea country, his prime minister said in an interview.
"The state will basically do everything to support business and investments instead of standing in the way of it," said Prime Minister
Lado Gurgenidze... The government last week signed off on a proposal that would cut average income taxes to 15% from 25% over the next five years. Capital-gains taxes, currently at 20%, would be abolished
altogether.
Sunday, January 20, 2008 ~ 1:17 p.m., Dan Mitchell Wrote: Justice Department lawyers have filed a curious amicus brief in the DC gun ban case before the US Supreme Court. ...They argued that gun
ownership is not a "fundamental" right. Instead, they say, it is a right deserving only an "intermediate" level of protection. ...It appears that the
Justice Department is trying to say this is a right that should be protected, but the level of protection should be low enough to allow government to
broadly restrict or maybe even eliminate your ability to exercise that right. They try to split the baby of having a right but letting government
do almost whatever it wants to that right. The problem with splitting a baby in half is that the baby usually dies. If our rights can be regulated to
the point that we can't exercise them in our own homes, then they've been regulated out of existence. ...This brief was a terrible mistake. Hopefully
the lawyers in this case can persuade the Supreme Court to reject that argument, and give our Second Amendment civil rights the robust protection they deserve.
Saturday, January 19, 2008 ~ 6:19 p.m., Dan Mitchell Wrote: Why is selling an organ "radical"? Banning the sale of kidneys kills thousands of people a year. That should be considered "radical." Today,
74,000 Americans wait for kidney transplants while enduring painful, exhausting and expensive hours hooked up to dialysis machines. The machines are technological miracles that keep many alive, but dialysis is
not nearly as good as a real kidney. Every day, about 17 Americans die while waiting for a transplant. Yet plenty of Americans would give up a
kidney if they could just be paid for their trouble and risk. ...Why isn't someone with two healthy organs allowed to put one on the market? Because in 1984, U.S. Rep. Al Gore sponsored a law making the sale of
organs punishable by five years in jail. ...When I confronted Dr. Brian Pereira of the National Kidney Foundation about that, he said, "The
current system functions extremely well." I asked him how the system could be working "extremely well" when 17 people die every day because
they can't get kidneys. He said that the "desperate (situation) doesn't justify an unwise policy decision." The Kidney Foundation fears that poor
people would be "exploited." But what gives the foundation the right to decide for poor people? ...gatekeepers like Dr. Pereira say there should be
"no barter, no sale of organs. That's where we have to step in." When I asked him who that "we" is that has the right to "step in," he replied,
"The government (and) the professional societies." That conceit -- that the government and "professional societies" must decide for all of us, and
the underlying hostility toward commerce -- kills people. Money shouldn't make giving up an organ suspect. As one kidney patient told me before he
died, "The doctors make money, the hospitals make money, the organ procurement organizations make money. Everybody gets something
except for the donor!" If you think it's immoral to sell an organ, don't do it. But sick people shouldn't have to die because some people despise markets.
Saturday, January 19, 2008 ~ 5:50 p.m., Dan Mitchell Wrote: Some people might agree with this level of government control over their lives, but if these amendments become law, you can safely bet there are
other intrusive energy-saving proposals waiting in the wing. For now California's energy Nazis are simply testing how much intrusiveness Californians will peaceably accept. I can easily imagine California's
Energy Commission requiring remotely controlled main circuit breaker boxes that control all of the electricity coming into your house. That
would enable the energy czar to better manage your electricity use. ...There's no end to what the energy czar could do, particularly if he
enlists the aid of California's Department of Health Services. Getting six to eight hours sleep each night is healthy; good health lowers health costs.
So why not make it possible for the energy czar to turn the lights off at a certain hour? California's Department of Education knows children should do their homework after school rather than sit playing video
games or watching television. The energy czar could improve education outcomes simply by turning off the television, or at least turning off all
non-educational programs. ...You say, "Williams, you must be mad. All that would never happen." That's the same charge one might have made
back in the '60s, when the anti-tobacco movement started, if someone predicted that the day would come when some cities, such as Calabasas, Calif., would outlaw smoking on public streets. Back in the '60s, had
someone predicted that there'd be bans on restaurants serving foie gras; citations for driving without a seatbelt, that the government said would
be unnecessary if cars had airbags; and school bans on kids having peanut butter sandwiches in their lunchbox, I'm sure people would have said that would never happen.
Friday, January 18, 2008 ~ 7:30 p.m., Dan Mitchell Wrote: The office of Hungarian Prime Minster Ferenc Gyurcsany has confirmed that the government intends to reduce the tax burden by 0.5% of gross
domestic product over the next two years. ...Gyurcsany told Euromoney that the convergence plan allowed some room for tax cuts and for the
overall tax burden to be cut to 37.6% of GDP by 2010. ...the governing coalition has begun to debate a number of tax proposals with the aim of
sharpening the country's tax competitiveness. According to the business daily Vilaggazdasag, four tax packages were under discussion by the
governing Socialist Party and its junior coalition partner Free Democrats last Friday: one would cut the 'tax wedge' on labour from 29% to about 20%, but increase the top rate of VAT by 2% to 24% and abolish tax
allowances; the second would reform the personal income tax system, applying the principle of 'super grossing'; the third would reduce the tax burden on corporations; and the fourth would introduce a flat tax on
personal incomes and/or corporate incomes and VAT.
Friday, January 18, 2008 ~ 6:54 p.m., Dan Mitchell Wrote: Can tax rate cuts increase revenues? …The Russian flat tax experiment is particularly interesting: after the introduction of flat taxes, and effective
personal income tax rate cuts, tax revenues increased substantially and almost immediately. Furthermore, they increased much faster than labor
supply and output. The paper explains how tax rate cuts can increase tax revenues through tax compliance spillovers in such a manner. …This paper shows that endogenous tax compliance responses can be
responsible for the massive increase in tax revenues. The key intuition is that tax regimes are prone to spillovers, as the aggregate behavior of
taxpayers determines how much time the tax authority can dedicate to the individual taxpayer. In a way, tax evaders protect each other by tying
down the tax authority's limited capacity. Hence, small cuts in the tax rates can lead to much larger changes in the behavior of taxpayers — most importantly, it can make them much more likely to declare their
incomes honestly. These spillovers can lead to increasing tax revenues. …taxpayers evade less tax payments when the tax rate is lower… evasion
increases with the tax rate. …Three cases could be highlighted. First, countries with high official tax rates and relatively weaker tax authorities, such as some of the transition economies, might benefit from
tax rate cuts and improving compliance. Second, the model might be also relevant for countries with high tax rates, even if tax enforcement seems
to be strong in absolute terms. Third, low tax countries which have particularly weak tax enforcement could also think about improving tax compliance via tax rate cuts.
Thursday, January 17, 2008 ~ 12:33 p.m., Dan Mitchell Wrote: ...inflation-indexing of capital gains should be part of every candidate's "economic stimulus" package, regardless of party affiliation. ...Assume
you purchased a common stock in a company in 1984 for $100 a share and sold it in 2007 for $200 a share. Have you received any "income"
from the sale of the shares of stock? The IRS would say "yes," but this is clearly wrong. The IRS will claim that you had a $100 per share capital
gain on the stock in the above example, yet actually the increase was solely a result of inflation. Because you cannot buy more goods and services with $200 now than you could have with $100 in 1984, you have
had no "income" or wealth accretion. ...The Bush administration ought to make inflation indexing part of its "stimulus package." If properly
explained, considerable bipartisan congressional and judicial support should be obtained. A number of legal scholars have argued that the executive branch could unilaterally make the change by requiring the IRS
to correctly define the words "cost" and "income," given that it was the IRS that originally incorrectly defined them.
Thursday, January 17, 2008 ~ 12:03 p.m., Dan Mitchell Wrote: ...globalization is driving down tax rates around the world, since both labor and capital are more mobile and can search for relative tax havens.
Corporate tax rates, for instance, have been falling in many countries. The United States is one of only two countries in the Organization for Economic Cooperation and Development not to reduce their corporate
tax rate from 1994 to 2006, according to the Tax Foundation. Note, too, the rising popularity of the flat tax, particularly in the former captive nations of the Soviet Union.
Thursday, January 17, 2008 ~ 11:41 a.m., Dan Mitchell Wrote: Former Treasury Secretary Larry Summers is leading the charge for the Democrats, pushing what he calls a "timely, targeted and temporary" tax
rebate of $250 per tax filer, and $500 per couple. The White House is floating its own rebate of $500 or so for families with taxable income of
less than $100,000 a year. Mr. Summers says his plan would put money in the pockets of "those who would go out and spend it." ...Mr. Summers is
pushing a version of single-entry Keynesian bookkeeping, which holds that if the government hands out cash to workers they will spend it and
"stimulate" the economy. But the money the government would thus "inject" in the economy has to come from somewhere. That is, it has to be
raised in taxes or borrowed, which means it is taken from someone else in the private sector. Under more accurate double-entry bookkeeping, this
stimulus is likely to be minuscule. ...A real fiscal stimulus is one that immediately and permanently changes the incentives for individuals and
business to work, invest and take risks. That's the comparative lesson of the two Bush tax cuts... The 2001 tax cuts were useful as a way of getting
marginal income-tax rates down eventually. But in addition to the rebate folly, the rate cuts were phased-in and thus gave everyone an incentive to
postpone investment. The stimulus came in 2003 when the marginal rate cuts were accelerated and capital gains and dividend rates were slashed immediately.
Thursday, January 17, 2008 ~ 10:39 a.m., Dan Mitchell Wrote: Next year in California, state regulators are likely to have the emergency power to control individual thermostats, sending temperatures up or
down through a radio-controlled device that will be required in new or substantially modified houses and buildings... the idea that a government
would mandate use of these devices and reserve the power to override a building owner's wishes galls some people. "This is an outrage," one
Californian said in an e-mail message to Dr. Rosenfeld. "We need to build new facilities to handle the growth in this state, not become Big Brother to
the citizens of California." ...Mr. Somsel went after the proposal with arguments that were by turns populist ("Come the next heat wave, the
elites might be comfortably lolling in La Jolla's ocean breezes" while "the Central Valley's poor peons are baking in Bakersfield"), free-market
("P.C.T.'s will obscure the price signals to power plant developers") and civil libertarian ("the new P.C.T. requirement certainly seems to violate
the 'a man's home is his castle' common-law dictum").
Wednesday, January 16, 2008 ~ 9:30 p.m., Dan Mitchell Wrote: Conservatives may be surprised to hear that for over 50 years they have been successful in stopping the growth of big government. Going all the
way to the early 1950s Federal spending has hovered in a fairly narrow band around 20% of GDP. But even that limited success is soon to be swamped by reality. For the Federal Government's long-term projections
show a radical change over the next 40 years, with Federal spending soaring close to 40% of GDP or more. This is due to our nation's big entitlement programs - Social Security, Medicaid and Medicare. Counting
state and local spending, total government spending in the U.S. would be over 50% of GDP. If anything even close were to occur it would be a crushing defeat for conservatives and the end of any notion of limited
government. ...Nor is the answer to give in and raise taxes, as even some conservatives are now saying will be necessary. Some, indeed, want to
broker a grand deal with liberals for big entitlement cuts in return for huge tax increases to balance the long-term budget. Even if we do get any
entitlement cut through such a deal, advocates of this approach will be asking conservatives to support what yet would be a huge increase in Federal spending, to around 30% of GDP or more, in return for an
enormous, unprecedented tax increase to support such spending levels.
Wednesday, January 16, 2008 ~ 9:03 p.m., Dan Mitchell Wrote: Some Christian Democrats and Social Democrats now find unity in their calls for government caps on "excessive" manager salaries. ...for the
country as a whole, this debate is rather dangerous. It moves Germany to the left, hardening the public against further reforms at a time when
global competition may make it necessary to lower taxes or break down barriers on the job market. ...how much more than a clerical worker is a top manager allowed to earn? Are we going to set up a new government
advisory body to determine this? ...it would also immediately trigger an exodus of top managers -- and the consequences for companies and their
employees in Germany would be incalculable. But why stop there? There are plenty of salaries that could make people green with envy. Once it has
taken care of Germany's managers, this advisory body could turn its attention to the fantastic incomes pocketed by pop stars, actors or soccer
players -- or anyone else they may deem to earn an "excessive" salary. If you want freedom, though, you have to tolerate income inequality.
...Statistics show that the top 10% of taxpayers already account for about half of the nation's income-tax revenue. The lower half of the tax-paying
population, with incomes of up to EUR27,200, contributes only 7.5% of the national tax revenues. Anyone keeping these figures in mind would actually have to be grateful toward every high earner who remains in
Germany and pays taxes.
Wednesday, January 16, 2008 ~ 8:11 p.m., Dan Mitchell Wrote: A lot of Americans who believe in the right to own guns were very disappointed this weekend. On Friday, the Bush administration's Justice
Department entered into the fray over the District of Columbia's 1976 handgun ban by filing a brief to the Supreme Court that effectively supports the ban. ...The Department of Justice argument can be boiled
down pretty easily. Its lawyers claim that since the government bans machine guns, it should also be able to ban handguns. ...Factually, there
are many mistakes in the DOJ's reasoning. ...The biggest problem is the standard used for evaluating the constitutionality of regulations. The DOJ
is asking that a different, much weaker standard be used for the Second Amendment than the courts demands for other "individual rights" such as
speech, unreasonable searches and seizures, imprisonment without trial, and drawing and quartering people. If one accepts the notion that gun
ownership is an individual right, what does "the right of the people to keep and bear Arms, shall not be infringed" mean? What would the
drafters of the Bill of Rights have had to write if they really meant the right "shall not be infringed"? Does the phrase "the right of the people"
provide a different level of protection in the Second Amendment than in the First and Fourth? ...Perhaps the Justice Department's position isn't
too surprising. Like any other government agency, it has a hard time giving up its authority. The Justice Department's bias can been seen in
that it finds it necessary to raise the specter of machine guns 10 times when evaluating a law that bans handguns. Nor does the brief even
acknowledge that after the ban, D.C.'s murder rate only once fell below what it was in 1976. ...President Bush has the power to fix this by
ordering that the solicitor general brief be withdrawn or significantly amended.
Wednesday, January 16, 2008~ 7:42 p.m., Dan Mitchell Wrote: That foreigners find themselves more often in that situation than natives is to a large extent the result of misguided welfare policies. Germany's
strict labor rules protect "insiders" -- that is, those who already have jobs. Generous unemployment benefits for "outsiders" have fostered a
dependency culture particularly entrenched among foreigners. More than 40% of foreigners have no occupational training. The unemployment rate
among non-citizens in Germany is, at 18.6%, twice as high as the national average. Those who complain the loudest about Mr. Koch's "xenophobic"
campaign are the same who, in the name of social justice, advocate policies that would make it even harder for unskilled immigrants to find jobs.
Tuesday, January 15, 2008 ~ 11:57 a.m., Dan Mitchell Wrote: The 2008 Index finds that while global economic liberty did not expand this year, it also did not contract. The average freedom score for the 157
countries ranked is nearly the same as last year, which was the second highest since the Index's inception. ...Egypt was the most improved
economy in the world, implementing major changes to its tax policies and business regulation environment and jumping to number 85 from 127th
place last year. Mauritius was the second-best performer, moving into the top 20 from No. 34 last year. Trade liberalization and improved fiscal
policies, including a flat tax, made Mongolia the third-best performer, and put it in the category of "moderately free" economies.
Tuesday, January 15, 2008 ~ 11:14 a.m., Dan Mitchell Wrote: ...if taxpayers do not feel confident that the taxes that they pay are used efficiently, compliance will suffer.
Tuesday, January 15, 2008 ~ 10:43 a.m., Dan Mitchell Wrote: Mr. Schwarzenegger's program is built around the "individual mandate," which requires that everyone acquire insurance or else pay penalties.
While bumping up subsidies for the uninsured, California would also lay down more severe insurance regulations, instituting price controls and
compelling companies to offer policies to all applicants without regard to age or health condition. Such mandates have all but devastated the
insurance markets in every other state where they've been tried, but then all this is the triumph of politics over experience anyway. In addition to
hiking state levies on cigarettes to $1.75 a pack and imposing a 4% tax on hospital revenues, there are new taxes on business. Companies must
either spend a certain amount on covering their employees or pay a tax sliding between 1% and 6.5%, depending on the size of the payroll. If Mr.
Perata is watching out for his state's bottom line, such taxes may drive businesses to Nevada or Arizona -- or simply lead them to dump their
health-care liabilities on the state and pay the 6.5%. None of this is what California's cooling economy needs -- to say nothing of the damage that
such a plan would do to the insurance markets, or the national precedent it would set.
Monday, January 14, 2008 ~ 5:35 p.m., Dan Mitchell Wrote: Need a stimulus package? Why not adopt full or partial first-year expensing (or its cousin, the investment tax credit), which has come to the
rescue many times since 1962, when President John F. Kennedy first administered this type of remedy to the economy? By allowing more of the cost of machinery and equipment to be deducted more quickly, first-year
expensing causes new investment to be made sooner. More investment means more productivity -- and 80% of the net benefit from increased productivity goes to labor. Expensing is a no-risk tax cut. It worked four
times in the 1960s and 1970s. It worked in 1981-1982 and again in 2002-2004. ...Much of the revenue payback starts quickly. In the case of a full, first-year deduction for the cost of equipment with a five-year
depreciation life, the Treasury gets 52% of its money back in the first two years. The economy gets a boost even quicker. In terms of the real benefit
from capital investment -- induced economic growth and higher living standards -- first-year expensing produces enormous bang for the buck. Experience in 2003-2004 shows that new orders for manufacturing
equipment and other business durables begin to be placed within weeks of the enactment date. Small businesses and other producers will not order
what they do not need. But when the price goes down (which is the effect of expensing), they can afford to order what they do need more quickly,
and in larger volumes. An analysis for the Institute for Policy Innovation in 2001 concluded that, over time, each $1 of tax cut from first-year
expensing produces about $9 of additional GDP growth. The high ratio occurs in large part because more capital investment leads to more employment and higher wages.
Monday, January 14, 2008 ~ 5:00 p.m., Dan Mitchell Wrote: President Bush reportedly might float a $500 tax rebate plan in his State of the Union address. Relief is always welcome, but permanent cuts
stimulate the economy. Leave gimmicks to the Democrats. ...A few months after taking office in 2001, with the economy in urgent need of
help, the president had the Treasury provide quick relief in the form of tax rebate checks for as much as $600 per family. Americans were happy to
have the extra cash, but the economy didn't take off until marginal income tax rates and capital gains and dividends taxes were cut two years
later. ... Now that there are some troubling signals the economy is slowing - last month's jump in the jobless rate from 4.7% to 5%, along with a
softening real estate market - White House economists are seeking a stimulus.
Monday, January 14, 2008 ~ 4:52 p.m., Dan Mitchell Wrote: Public health programs account for almost half of the $2 trillion spent on U.S. health care, a Hoover Institution report says. An astonishing 80% or
more of all medical-care pricing is based on government reimbursement rates set by Medicare. As for private costs, they would be lower if government didn't interfere in the market. Regulations imposed on the
industry cost more than $330 billion a year, Hoover says. Perverse tax policies have created a third-party payer system. Patients no longer have
first-dollar responsibility for medical bills thanks to employer insurance. ..."Patients have no idea what their doctor visits, surgeries, diagnostic
studies or other medical services - whether urgent or elective - will cost until the bill comes weeks later," said Dr. Scott W. Atlas, a senior Hoover
fellow and chief of neuroradiology at Stanford University Medical School. Even then, they seldom flyspeck the bill. Why bother, when they're responsible for just 10% to 20% of it? ... So if Uncle Sam made health
care so unaffordable, why do so many voters like Democrats' plans to expand government control of health care? Because they've bought into the myth that the private sector has failed and begs for government
rescue. ... Right now only about 17 million Americans buy their own health insurance. If 50 million did so through HSAs, we'd see at least a 30% reduction in medical costs, studies show, thanks to increased
competition in the market.
Monday, January 14, 2008 ~ 2:14 p.m., Dan Mitchell Wrote: Barbados Prime Minister, Owen Arthur has called for the establishment of a new agency to deal with issues arising from cross-border taxation
within the United Nations. ...Arthur said that cross border taxation issues were becoming more important as countries moved towards a global economy. He acknowledged the existence of a committee at the level of
the UN, but advocated that its work should now be at the level of an agency.
Sunday, January 13, 2008 ~ 4:00 p.m., Dan Mitchell Wrote: First, jobs. We need more of them, but risk ending up with fewer, as the workers of Asia compete ever more effectively in a global labour market.
We need these jobs to combat the social evil of unemployment, to increase wealth and to support our ageing populations. We Europeans have proportionately fewer people in work than America does, and work
shorter hours. …The difference will be made mainly by individual entrepreneurs, companies, trade unions and national governments, with Germany and France remaining pivotal. …The Eurocrats of
over-regulation should this year take an economic version of the Hippocratic oath: first do no harm. At every turn they should ask: "Is your directive really necessary?" If it isn't, scrap it.
Sunday, January 13, 2008 ~ 2:43 p.m., Dan Mitchell Wrote: French President Nicolas Sarkozy, in a speech on Tuesday, unveiled new proposals for an internet-based tax, as part of a range of new levies to
fund France's state broadcasters. ...Sarkozy outlined plans [for] a tax on internet connections, mobile phone usage and a levy on the advertising
revenues of commercial television stations. Sarkozy promised that any tax on internet users would be "infinitesimal", but his idea is controversial,
and some observers see the plan as taxing the new media to help fund the old. France would also stand out as one of the only countries to raise
revenues from taxing internet access, something which other governments have so far shied away from.
Saturday, January 12, 2008 ~ 8:21 p.m., Dan Mitchell Wrote: Millions of children are being raised on prejudice and disinformation. Educated in schools that teach a skewed ideology, they are exposed to a
dogma that runs counter to core beliefs shared by many other Western countries. …Just as schools teach a historical narrative, they also pass on "truths" about capitalism, the welfare state, and other economic
principles that a society considers self-evident. In both France and Germany, for instance, schools have helped ingrain a serious aversion to
capitalism. In one 2005 poll, just 36 percent of French citizens said they supported the free-enterprise system, the only one of 22 countries polled
that showed minority support for this cornerstone of global commerce. In Germany, meanwhile, support for socialist ideals is running at all-time highs—47 percent in 2007 versus 36 percent in 1991. …Many of these
popular attitudes can be traced to state-mandated curricula in schools. It is there that economic lessons are taught that diverge substantially from
the market-based principles on which the Western model is based. The phenomenon may hardly be unique to Europe, but in few places is it more obvious than in France and Germany. A biased view of economics feeds
into many of the world's most vexing problems, from the growth of populism to the global rise of anti-American, anti-capitalist attitudes. …The past 20 years have "doubled wealth, doubled unemployment,
poverty, and exclusion, whose ill effects constitute the background for a profound social malaise," the text continues. Because the 21st century
begins with "an awareness of the limits to growth and the risks posed to humanity [by economic growth]," any future prosperity "depends on the regulation of capitalism on a planetary scale." Capitalism itself is
described at various points in the text as "brutal," "savage," "neoliberal," and "American." This agitprop was published in 2005, not in 1972. When French students are not getting this kind of wildly biased
commentary on the destruction wreaked by capitalism, they are learning that economic progress is also the root cause of social ills. …Germans
teach their young people a similar economic narrative, with a slightly different emphasis. The focus is on instilling the corporatist and collectivist traditions of the German system. …Bosses and company
owners show up in caricatures and illustrations as idle, cigar-smoking plutocrats, sometimes linked to child labor, Internet fraud, cell-phone
addiction, alcoholism, and, of course, undeserved layoffs. The successful, modern entrepreneur is virtually nowhere to be found. German students
will be well-versed in many subjects upon graduation; one topic they will know particularly well is their rights as welfare recipients. …The not-so-subtle subtext? Jobs are a right to be demanded from the
government. The same chapter also details various welfare programs… Like many French and German books, this text suggests students learn more by contacting the antiglobalization group Attac, best known for
organizing messy protests at the annual G-8 summits. One might expect Europeans to view the world through a slightly left-of-center, social-democratic lens. The surprise is the intensity and depth of the
anti-market bias being taught in Europe's schools. Students learn that private companies destroy jobs while government policy creates them.
Employers exploit while the state protects. Free markets offer chaos while government regulation brings order. …training the next generation of citizens to be prejudiced against being enterprising and productive
is…foolhardy. …If countries like France and Germany hope to get their nations on a new economic track, they might start paying more attention to what their kids are learning in the classroom.
Friday, January 11, 2008 ~ 11:45 a.m., Dan Mitchell Wrote: Democrats in Congress remain committed to raising taxes on grounds that tax rates don't much matter to economic growth, and in any case
they only help the rich. They may be the last public officials on the planet to believe this. In recent weeks alone, some of the unlikeliest political
leaders have endorsed tax rate cuts in the name of making their economies better. Start in Europe, where Socialist Party Prime Minister José Luis Rodríguez Zapatero pledged in December that if re-elected,
"One of the first decisions I would take is to eliminate the wealth tax [up to 2.5%]," which he says is one of the highest in Europe and "punishes
savings." ...Like France and Germany, Spain is cutting rates because of the tax competition from their European Union neighbors such as Ireland
and East Europe. There are now at least 11 nations formerly behind the Iron Curtain with flat rate taxes of 25% or lower. ...It's getting lonelier all
the time at the top for America, which with a corporate tax rate of 35% is one of the few developed nations left with a rate of more than 30%.
Economist Dan Mitchell tracks these trends for the Cato Institute, and he finds that 26 developed nations have cut either personal or corporate
income tax rates since 2005. Since 1980, OECD nations have sliced their average personal income tax rate by 24 percentage points, to 40% from
64%. Corporate tax rates have fallen by more than 20 percentage points. Foreign leaders have learned that, in a world of easy global capital flows,
high tax rates chase away investment and entrepreneurs. Some of these tax-cutting nations -- such as Estonia, Ireland, Russia and Spain -- have seen revenues rise even as rates have fallen.
Friday, January 11, 2008 ~ 10:21 a.m., Dan Mitchell Wrote: For much of the last year, the Russian government has been lionizing an American president who roughly seized the reins of power, dealt briskly
with civil liberties, had a harsh view of constitutional niceties and crafted a media strategy, which critics derided as "propaganda," that went "over
the heads" of the Washington press corps. George W. Bush? Nope. Franklin Delano Roosevelt. ...In Germany, the newly empowered National Socialists were equally eager to claim FDR's New Deal as an endorsement
of "Hitler's New Deal" - in historian David Schoenbaum's phrase. The German press adored FDR. In 1934, the Vlkischer Beobachter, the Nazi Party's official newspaper, described Roosevelt as a man of
"irreproachable, extremely responsible character and immovable will" and a "warm-hearted leader of the people with a profound understanding
of social needs." A review of Looking Forward noted that "many passages ... could have been written by a National Socialist. ...Meanwhile,
some in FDR's administration admired fascism. Gen. Hugh Johnson, head of the National Recovery Administration and Time's Man of the Year in 1933, had an abiding fondness for Mussolini's Italy. He distributed The
Corporate State, an Italian fascist tract, to his colleagues and hung Il Duce's portrait on his wall.
Friday, January 11, 2008 ~ 10:04 a.m., Dan Mitchell Wrote: Is a public-sector job really as good as a job created in the private sector? ... the quality of government-paid jobs is also relevant because of the
Democratic presidential candidates' interest in that 1930s experiment. ... The New Deal government indeed spent a lot. ... President Roosevelt had
no time for paltry 1% changes. He nearly doubled the federal budget in his first term. ... The New Deal also created a lot of jobs--millions. And the New Deal did cause significant business activity. Industrial
production--factory activity, basically--came back to 1929 levels around the time of Roosevelt's re-election. All of these outcomes are taken as
evidence of public spending's success. But what really stands out when you step back from the picture is not how much the public works achieved. It is how little. Notwithstanding the largest peacetime
appropriation in the history of the world, the New Deal recovery remained incomplete. From 1934 on--the period when the spending ramped up--monetary troubles were subsiding, and could no longer be
blamed alone for the Depression. The story of the mid-1930s is the story of a heroic economy struggling to recuperate but failing to do so because
lawmakers' preoccupation with public works rather got in the way of allowing productive businesses to expand and pull the rest forward. ... In
the very best years of Roosevelt's first two terms, unemployment still stood above 9%. Nine percent is better than horrendous, but it hardly is a
figure that induces hope. ... the government was taking all the air in the room. ... What about that oft-cited rising industrial production figure?
The boom in industrial production of the 1930s did signal growth, but not necessarily growth of a higher quality than that, say, of a Soviet factory
running three shifts. Another datum that we hear about less than industrial production was actually more important: net private investment, the number that captures how many capital goods companies
were buying relative to what they already had. At many points during the New Deal, net private investment was not merely low, but negative. ... Five years into the New Deal, companies across the country were
mounting what Roosevelt himself described as a "capital strike."
Thursday, January 10, 2008 ~ 4:12 p.m., Dan Mitchell Wrote: I do not think it would be prudent to go "full Monty" with the FairTax. However, I believe there is some potential for reforms along the following
lines: 1. Abolish the income tax for households with incomes under $100,000. Tax 10 percent of income between $100,000 and $150,000 and 35 percent of income over $150,000. Index these brackets for growth in
nominal wages, but otherwise put in mechanisms that freeze the income tax. 2. Abolish the payroll tax. 3. Institute a national sales tax of about
half of the FairTax plan. In the future, implement all tax cuts and tax increases through the sales tax, not the income tax. ...Compared with the
FairTax, the semi-Fair tax would not reduce taxes on high earners--some of them might even face higher taxes. However, it would reduce taxes on work and increase taxes on consumption.
Thursday, January 10, 2008 ~ 3:53 p.m., Dan Mitchell Wrote: The European Commission is considering proposing a carbon dioxide tariff on imports from states failing to tackle greenhouse gas emissions...
The plan reflects pressure by French president Nicolas Sarkozy who argued in October that Europe should "examine the option of taxing products imported from countries that do not respect the Kyoto
Protocol," referring to the 1997 international agreement on fighting climate change. Mr Sarkozy urged Brussels to discuss the implications of "unfair competition" by firms outside the EU.
Thursday, January 10, 2008 ~ 2:44 p.m., Dan Mitchell Wrote: The 51-year-old businessman best known for his diamond trading company and who is estimated to be worth $6.5 billion, is expected to
move with his wife and two of his nine children. Leviev, who is said to have immigrated to Israel without a penny to his name, also has homes in
Israel, New York and Moscow, but is thought to favor a move to London because of high taxes in Israel. ...His move to London follows in the footsteps of more high-profile billionaires, including his friend Roman
Abramovich, the owner of Chelsea Football Club.
Wednesday, January 9, 2008 ~ 6:21 p.m., Dan Mitchell Wrote: The European Union is 'spraying' £35billion a year at 'absurd' development projects which do little to alleviate poverty or promote
economic growth, a report claimed last night. ...The money for the projects comes from the EU's structural and cohesion funds, which are intended to allow the poorest parts of Europe catch up with their
wealthier neighbours. ...'The only real motivation for continuing with these failing programmes seems the EU's desire to be seen to be handing
out money and doing good things.' ...the system is vulnerable to fraud. Perhaps the most worrying finding was that the funds are failing to achieve their primary aim - to alleviate poverty in the EU. Of the 44
regions granted Objective One status in 1989 - the most needy group - 43 were still eligible for funding 14 years later. The report said: 'Because of
EU rules which say that regional authorities must spend money or lose it, the focus is very much on "getting the money out of the door". This and
other factors lead to the commissioning of wasteful projects which do not boost growth or employment.'
Tuesday, January 8, 2008 ~ 12:31 p.m., Dan Mitchell Wrote: Moves to harmonise the base for corporation tax across Europe are ''dead in the water'', as major countries turn against the project, junior minister
Dick Roche has told government ministers. However, the European commissioner responsible for the plan has insisted he will press ahead with the plan despite objections. The drive to create a common corporate
tax base was postponed last month by Commission president Jose Manuel Barroso, amid criticism that he was caving in to Irish pressure in advance
of the referendum on the new European Treaty. The harmonisation move has been trenchantly opposed in Ireland, due to fears that it could interfere with the policy of using a low corporation tax rate to attract
inward investment. ...Roche, who is Minister of State for European Affairs, has said that the policy ''is not just dead for the next 12 months
until Ireland votes in the EU Reform Treaty''. ...A European minister from a member state which firmly supported the common tax policy had
recently revealed that it was ''effectively dead in the water'', said Roche. ''We're making certain that a very heavy rock will be placed on its head,"
added Roche. ...Commissioner Charlie McCreevy has been the most vocal enemy of the plan, promoting the benefits of ''tax competition'' between states and describing Kovacs' plans as tax harmonisation by the back
door.
Monday, January 7, 2008 ~ 8:14 p.m., Dan Mitchell Wrote: A new Corporate Tax Act took effect in the Federation with the beginning of 2008, reducing corporate profit tax rate from 30 per cent to 10 per cent.
Sunday, January 6, 2008 ~ 6:34 p.m., Dan Mitchell Wrote: Sincere Church leaders, who are rightly convinced of their special mission to assist the poor, are sometimes drawn to a false hope that higher taxes,
land redistribution, nationalization of industry and ever more big government programs offer a way out. This is tragic because it threatens
to entangle the Church in politics, staking its reputation and the message of the Gospel on a political agenda. At least 100 years of evidence stands
contrary to the claim that a more powerful state (and that is all liberation theology really offers) is the proper means to material advance. Nothing
is to be gained for anyone but the state by smashing the rich. What society needs is not expropriation but ever widening opportunities for all classes
to improve their living standards. There is only one way toward liberation, and that is a genuine liberalization of economic and political
life, one that separates the state, not only from the Church, but also from the culture and the commercial life of the nation.
Sunday, January 6, 2008 ~ 4:17 p.m., Dan Mitchell Wrote: ...is mandatory health insurance really a good idea? Requiring catastrophic coverage (our parents called it major medical) probably is
smart. This would ensure that a person who is hurt in a car accident or diagnosed with a costly illness can pay his own medical bills, instead of
being a burden on society. But catastrophic coverage is not what the mandate advocates want. They would require that everyone have comprehensive health insurance, covering preventive and routine care.
...The first myth is that it's fair to make everyone pay the same price for health insurance. It is not: For young people who rarely use health
services, this is a rip-off. If people in their 20s paid attention to politics and voted, politicians wouldn't dare try this. ...The second myth behind
federal mandate proposals is this: Lack of insurance forces people into the emergency room for routine health care. "It's a hidden tax, the high
cost of emergency room visits that could have been prevented by a much less expensive doctor's appointment," Mrs. Clinton said recently. The
truth is that the uninsured do not use emergency rooms more than other people.
Saturday, January 5, 2008 ~ 4:35 p.m., Dan Mitchell Wrote: U.S. House members spent $20.3 million in tax money last year to send constituents what's often the government equivalent of junk mail -
meeting announcements, tips on car care and job interviews, surveys on public policy and just plain bragging. They sent nearly 116 million pieces
of mail in all, many of them glossy productions filled with flattering photos and lists of the latest roads and bridges the lawmaker has brought
home to the district, an Associated Press review of public records shows. ...For the House and Senate combined, the cost of taxpayer-paid mailings,
including mass mailings, letters to individuals and groups of up to 500 people, was $34.3 million for fiscal year 2006, according to a recent
Congressional Research Service report. In 1988, before more restrictions were imposed on the use of mailings, the figure was more than three times
larger, $113.3 million. ...The cost of postage is not the only expense for taxpayers. Printing and reproduction can add tens of thousands of dollars
to a mailing's cost. The printing cost for one mailing from McCotter was $30,259.
Friday, January 4, 2008 ~ 12:50 p.m., Dan Mitchell Wrote: Demagoguery about greedy rich people or greedy corporate executives being paid 100 or 200 times their workers' salaries is a key weapon in the
politics of envy. ..."Selfish" is...the human motivation that gets wonderful things done. For example, I think it's wonderful that Alaskan king crab
fishermen take the time and effort, often risking their lives in the cold Bering Sea, to catch king crabs that I enjoy. Do you think they make that
sacrifice because they care about me? I'm betting they don't give a hoot about me. They make it possible for me to enjoy king crab legs because
they want more money for themselves. How much king crab would I, and millions of others, enjoy if it all depended on human love and kindness? What about complaints about CEOs earning so much more than the
average worker? Before looking at CEOs, let's look at another area of huge pay differences. According to Forbes' Celebrity 100 list, Oprah Winfrey earned $260 million. Even if her makeup person or cameraman
earned $100,000, she earns thousands of times what they earn. Among the celebrities earning hundreds or thousands of times more than the people who work with them are: Steven Spielberg ($110 million), Tiger
Woods ($100 million), Jay Leno ($32 million) and Dr. Phil ($30 million). According to Forbes, the top 10 celebrities and athletes earned an average of $116 million in 2004 compared to an average of $59 million
earned by the top 10 corporate CEOs. When Jack Welch became General Electric's CEO in 1981, the company was worth about $14 billion. Through hiring and firing, buying and selling decisions, Welch turned the
company around and when he retired 20 years later, GE was worth nearly $500 billion. What's a CEO worth for such an achievement? If Welch was
paid a measly one-half of a percent of GE's increase in value, his total compensation would have come to nearly $2.5 billion, instead of the few hundred million that he actually received.
Friday, January 4, 2008 ~ 10:34 a.m., Dan Mitchell Wrote: Anyone who believes that the government can give the country presents has fallen for the oldest political illusion of all -- the illusion of something
for nothing. Santa Claus may turn out to be the real front-runner in the primaries, judging by the way candidates are vying with one another to
give away government goodies to the voters. Santa Claus is bipartisan. The Bush administration is unveiling its plan to rescue people who gambled and lost in the housing markets when the bubble burst. We now
have a bipartisan tradition of the government stepping in to rescue people who engaged in risky behavior -- whether by locating in the known paths
of hurricanes in Florida or in areas repeatedly hit by wildfires over the years in California or by doing things that increase the probability of
catching AIDS. Why not also rescue people who gambled away their life's savings in Las Vegas? That would at least be consistent. ...To this day,
there are people who believe that the market economy failed when the stock market crashed in 1929 and that the Great Depression of the 1930s that followed required government intervention. In reality, the stock
market crashed by almost exactly the same amount on almost the same day in 1987 -- and 20 years of prosperity, low inflation and low unemployment followed. What was the difference? Politicians -- first
President Hoover and then President Roosevelt -- decided that they had to "do something" after the stock market crash of 1929. In 1987, President
Ronald Reagan decided to do nothing -- despite bitter criticisms in the media -- and the economy recovered on its own and kept on growing.
Thursday, January 3, 2008 ~ 7:22 p.m., Dan Mitchell Wrote: To hear the candidates talk, a repeat of 1930s-scale government job creation is dangerously overdue. John Edwards has proposed that
government take the lead in creating types of jobs--"green collar" and "stepping stone"--to serve the two goals of protecting the environment
and giving lower earners new skills. Dennis Kucinich is calling for a new green version of FDR's Works Progress Administration. ...Academics are
backing the politicians up. Bruce Katz of the Brookings Institution recently suggested that intelligent planning is the key to success: "smart
policies and investments on infrastructure can foster productive growth in our economy, sustainable growth." Given this Edifice Complex, the
actual quality of New Deal spending, job creation and growth are worth a second look. The record is less impressive than the rhetoric implies. The
New Deal government indeed spent a lot. Nowadays Congress considers a 1% increase in the budget tantamount to treason, or nirvana, or both. President Roosevelt had no time for paltry 1% changes. He nearly
doubled the federal budget in his first term. ...But what really stands out when you step back from the picture is not how much the public works achieved. It is how little. Notwithstanding the largest peacetime
appropriation in the history of the world, the New Deal recovery remained incomplete. ...The story of the mid-1930s is the story of a heroic
economy struggling to recuperate but failing to do so because lawmakers' preoccupation with public works rather got in the way of allowing productive businesses to expand and pull the rest forward.
Wednesday, January 2, 2008 ~ 7:46 p.m., Eugene Slaven Wrote With most polls showing that voters believe trade with other countries is hurting the American economy, it is not surprising that there has been a
lot of posturing about the perils of trade on the campaign trail…Democrats have been most tempted by the protectionism. John Edwards likes to talk about how trade agreements like Nafta "have hurt
workers and families while helping corporate insiders." Senator Hillary Clinton has suggested that the economic theories underpinning the cause
for free trade no longer hold, and has said she would review all of the United States' trade agreements…Even Republican candidates — normally staunch supporters of expanding trade — can sound skeptical.
"I don't want to see our food come from China, our oil come from Saudi Arabia and our manufacturing come from Europe and Asia," complained Mike Huckabee. Mitt Romney defends globalization's record of improving
living standards, but cannot resist drawing an applause line by adding that the government should negotiate better with other countries to make
sure "the American worker gets a fair shake."…It would be unfortunate for the United States if the winner of the 2008 election elevated skepticism toward trade from a red-meat sound bite on the campaign trail
to a new wave of protectionist policy…There is scant evidence that trade has played a big role in holding down typical workers' wages. There is
abundant evidence that it has contributed substantially to America's overall economic growth. It offers American producers access to foreign markets. It multiplies choices for producers and consumers. Foreign
competition spurs productivity growth at home.
Tuesday, January 1, 2008 ~ 12:56 p.m., Dan Mitchell Wrote: Studies and rankings and polls and spreadsheets and all that the Census can disgorge add up to this: High-tax states in the Midwest are not
attracting people and businesses nearly as well as moderately taxed states. ...in Wisconsin, a lawmaker from Green Bay is pushing to make
companies declare publicly just what strategies they use to reduce, legally, the taxes they owe. State Senator Dave Hansen swears his bill, an idea
from a think tank sponsored by public-sector unions, wouldn't raise taxes. On that count it's as innocent as a razor-wielding serial killer paging
through an anatomy text: It seems like target refinement. ...not merely businesses are chased away but people are, too, just the kind a state
would want to keep. ...It is the most talented who are the most mobile, most able to opt for lower taxes. |
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