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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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Saturday, May 31, 2008 ~ 3:37 p.m., Dan Mitchell Wrote Jay Webber, a Republican Assemblyman in Trenton, will introduce legislation to let Garden State residents buy low-cost health insurance from any registered policy in any of
the 50 states. Mr. Webber's proposal is a state version of Arizona Congressman John Shadegg's federal legislation to let individuals buy insurance across state lines, and John McCain has also endorsed the idea.
But New Jersey would be a perfect test case, because its multiple mandates have made insurance too expensive for hundreds of thousands of families. The average national cost for a family health plan is $5,799,
according to America's Health Insurance Plans, but in New Jersey that same plan costs $10,398 on average. The state's politicians have driven up these costs by forcing insurers to provide gold-plated coverage –
even for such voluntary medical services as in vitro fertilization. New Jersey also follows New York and Massachusetts – two other high-cost states – in requiring so-called "guaranteed issue." That
allows New Jersey residents to avoid buying health insurance until they get sick, which means they can avoid paying premiums until they need someone to pick up the bill. …Under Mr. Webber's choice proposal, New
Jersey residents could buy policies chartered in more enlightened states. For example, a healthy 25-year-old male could buy a basic health plan in Kentucky that now sells for $960 a year, about one-sixth of the
$5,880 it would cost him in New Jersey. Residents of Pennsylvania pay health premiums that are one-half to one-third as high as do Garden State policy-holders. A new study by the National Center for Policy
Analysis estimates that the availability of lower cost plans would reduce by 25% the number of uninsured.
Friday, May 30, 2008 ~ 11:14 a.m., Dan Mitchell Wrote Police in this town wouldn't cut a break for a barber who ran afoul of an obscure law barring him from working Sundays and Mondays. Clyde
Scott had opened his shop May 19 just to trim up a few students getting ready for their graduation ceremony when an officer gave him a citation. A law on the books in Houma for decades bars barbers from working
Sundays, Mondays, any of several holidays and even the day after Labor Day. "I didn't know it existed," said Scott, 32, who has owned Clippas
barbershop for about two years. "It's crazy." ...District Attorney Joe Waitz Jr. won't be prosecuting the case. In fact, he's asking the parish
council to repeal the law as unconstitutional. "It's our job to prosecute criminals, not barbers," he said. James Adams, president of the Louisiana
Board of Barber Examiners, the state licensing agency for barbers and their shops, said he thinks the law is a vestige of "strong-arm" tactics used by a barber's union in the 1950s and '60s.
Thursday, May 29, 2008 ~ 7:11 p.m., Dan Mitchell Wrote The state of California's payroll is skyrocketing, even as its budget deficit has grown to billions of dollars in recent months. In Gov. Arnold
Schwarzenegger's first four years, the total bill for state workers' salaries jumped by 37 percent, compared with a 5 percent increase in the
preceding four years under then-Gov. Gray Davis, a Chronicle analysis of state payroll records shows. One month before Schwarzenegger took office in November 2003, just eight state employees earned more than
$200,000 a year working in the core state government, which excludes universities and the Legislature. In April of this year, there were nearly a thousand, according to records. And the number of state employees
making six-figure salaries has more than doubled since 2003, to nearly 15,000. Meanwhile, the number of state workers has grown by 26,000 under Schwarzenegger after being cut by Davis... The winners of the
payroll race seem to be the unions with the strongest political ties or those who spend big bucks on political contributions and lobbying, said Christina Lokke of California Common Cause, a good-government
watchdog group. "There's lobbying going on among all these groups of state employees - and the outcomes are pretty imbalanced," she said.
"Sometimes, politics and money beat good policy, that's when the public loses out."
Wednesday, May 28, 2008 ~ 7:26 p.m., Dan Mitchell Wrote Many Republicans are waiting for a consultant or party elder to come down from the mountain and, in Moses-like fashion, deliver an agenda
and talking points on stone tablets. But the burning bush, so to speak, is delivering a blindingly simple message: Behave like Republicans. Unfortunately, too many in our party are not yet ready to return to the
path of limited government. Instead, we are being told our message must be deficient because, after all, we should be winning in certain areas just
by being Republicans. Yet being a Republican isn't good enough anymore. Voters are tired of buying a GOP package and finding a big-government
liberal agenda inside. What we need is not new advertising, but truth in advertising. Becoming Republicans again will require us to come to grips
with what has ailed our party – namely, the triumph of big-government Republicanism and failed experiments like the K Street Project and
"compassionate conservatism." ...Common sense and the Scriptures show that true giving and compassion require sacrifice by the giver. This is why
Jesus told the rich young ruler to sell his possessions, not his neighbor's possessions. Spending other people's money is not compassionate.
Regaining our brand as the party of fiscal discipline will require us to rejoin Americans in the real world of budget choices and priorities, and to
leave behind the fantasyland of borrowing without limits. Instead of adopting earmarks, each Republican can adopt examples of government waste, largess and fraud, and restart the permanent campaign against big
government.
Wednesday, May 28, 2008 ~ 5:55 p.m., Dan Mitchell Wrote Warner-Lieberman would impose the most extensive government reorganization of the American economy since the 1930s. Thankfully, the
American system makes it hard for colossal tax and regulatory burdens to foxtrot into law without scrutiny. ...for the most part, the politicians favor
cap and trade because it is an indirect tax. A direct tax – say, on gasoline – would be far more transparent, but it would also be unpopular. Cap
and trade is a tax imposed on business, disguising the true costs and thus making it more politically palatable. In reality, firms will merely pass on
these costs to customers, and ultimately down the energy chain to all Americans. ...The other reason politicians like cap and trade is because it
gives them a cut of the action and the ability to pick winners and losers. Some of the allowances would be given away, at least at the start, while
the rest would be auctioned off, with the share of auctions increasing over time. This is a giant revenue grab. ...The Environmental Protection
Agency estimates that this meddling would cause a cumulative reduction in the growth of GDP by between 0.9% and 3.8% by 2030. Add 20 years,
and the reduction is between 2.4% and 6.9% – that is, from $1 trillion to $2.8 trillion. These estimates assume that electricity prices will increase
by 44% above what they would otherwise be by 2030. They also assume that existing coal-fired power plants, which currently provide about 50%
of U.S. electric power, will be shut down – to be replaced with at least 150% growth in new nuclear facilities, plus other "alternatives."
Tuesday, May 27, 2008 ~ 6:14 p.m., Dan Mitchell Wrote After fighting Switzerland's banking secrecy laws for decades, European finance ministers are about to receive support from the United States.
Investigations into major Swiss bank UBS and a proposed law against tax havens are ratcheting up pressure against the system. ...the United States is by
no means the only place where Swiss high finance and the country's banking secrecy laws are coming under growing pressure. Foreign authorities around
the globe are increasingly taking sharper action against tax evaders. Swiss financial institutions, often in tandem with partners in Liechtenstein, play a
central role in helping the ultra-rich avoid paying billions in taxes. An almost unimaginable fortune of more than EUR3 trillion ($4.7 trillion) is currently sitting
in Swiss bank accounts. The discreet Swiss allow vast amounts of money to disappear into trusts, offshore companies and bank accounts, money that is
often protected by Switzerland's banking secrecy laws. ...French Finance Minister Eric Woerth, who plans to dry up the profit sources of Alpine "tax
robbers," as he announced in a recent interview. ...One man he can count on as an ally in his campaign against tax havens is German Finance Minister Peer
Steinbrück. ...Former German Finance Minister Hans Eichel is a vocal critic of Switzerland's special status, and he is fond of appearing on Switzerland's
prime-time television talk shows, where he sharply attacks Swiss banking secrecy. "A person who receives stolen goods is no better than a thief," he
says. ...For Konrad Hummler, a partner in Wegelin & Co., German tax evasion is a legitimate defense by citizens attempting to "partially escape the
current grasp of the administrators of a disastrous social welfare state and its fiscal policies." ...Is Swiss banking secrecy headed for the history books? And
are Steinbrück and other finance ministers fighting a paper tiger? ...Political conflict is also on the horizon. An aggressive bill to combat tax evasion, the
"Stop Tax Haven Abuse Act," was introduced in the US Congress last year. The legislation provides for tough measures against 34 tax havens, including
Liechtenstein, Luxembourg and Switzerland. The bill has stood little chance of becoming law until now. But that could quickly change after the presidential
election in November. Once of the bill's three sponsors is Senator Barack Obama, who is currently favored to win the White House. But the campaign against financial privacy extends beyond Europe. As a report from the Wall Street Journal indicates, the United States also is putting pressure on Switzerland and other jurisdictions with financial privacy laws: As government officials intensify a multinational crackdown on offshore bank accounts, many wealthy Americans who use them to illegally shield
income are facing a difficult decision: whether to turn themselves in -- and if so, how. ...Tax dodgers are facing these stark choices as major cracks emerge in what once appeared to be an impenetrable wall of
secrecy surrounding bank accounts in such well-known havens as Liechtenstein and Switzerland. While officials have launched many similar campaigns in the past, their latest efforts are attracting widespread
attention because they are coming from so many different directions. Supporters of the attack say privacy must be sacrificed to reduce tax evasion, but this sidesteps the more relevant discussion of how best to improve tax compliance. Fundamental tax reform solves the problem since most tax evasion occurs because of high tax rates and double taxation of income that is saved and invested. This means that pro-growth policy not only generates more prosperity, but it eliminates any impulse to attack the sovereignty of other nations.
Tuesday, May 27, 2008 ~ 6:00 p.m., Dan Mitchell Wrote Medicaid, the open-ended program that provides health coverage for about 59 million low-income people, with the rolls expanding every year.
States determine eligibility and what services to cover, and the feds pick up at least half the tab, though the effective "matching rate" is as high as
83%. Now it turns out that states have been goosing their financing arrangements to maximize their federal payouts and dump more of their costs onto taxpayers nationwide. The swindle works like this: A state
overpays state-run health-care providers, such as county hospitals or nursing homes, for Medicaid benefits far in excess of its typical rates.
Then the federal government reimburses the state for "half" of the inflated bills. Once the state bags the extra matching funds, the hospital is
required to rebate the extra money it received at the scam's outset. Cash thus makes a round trip from states to providers and back to the states -
all to dupe Washington. ...The right word for this is fraud. A corporation caught in this kind of self-dealing - faking payments to extract billions,
then laundering the money - would be indicted. In fact, a new industry of contingency-fee consultants has sprung up to help states find and exploit
the "ambiguities" in Medicaid's regulatory wasteland. ...A reform alternative would be for the government to distribute block grants, rather
than a set fee for every Medicaid service. That would amputate Washington from state accounting and insulate taxpayers from these shakedowns. States would have an incentive to spend more responsibly,
and also craft innovative policies without Beltway micromanagement. But we can dream.
Monday, May 26, 2008 ~ 3:04 p.m., Dan Mitchell Wrote ...the Fed's most senior officials continue to insist that recent price increases have almost nothing to do with . . . monetary policy. Imagine
that. The latest to wash his hands of responsibility for the value of the currency is Donald Kohn, the Fed's current Vice Chairman and long-time
resident intellectual. In a speech in New Orleans this week, Mr. Kohn acknowledged soaring oil and food prices, but he blamed them on global
supply and demand for corn, oil and so on. "As interest rates in the United States fell relative to those abroad, the dollar declined, which
could have boosted the prices of commodities commonly priced in dollars by reducing their cost in terms of other currencies," Mr. Kohn explained.
"But the prices of commodities have risen substantially in terms of all currencies, not just the dollar. In sum, lower interest rates and the
reduced foreign exchange value of the dollar may have played a role in the rise in the prices of oil and other commodities, but it probably has
been a small one." If Mr. Kohn really believes this, we're in more trouble than we thought. For starters, he is simply wrong about the relative price
of commodities and other currencies. The price of oil has risen far more rapidly in dollars than it has in euros since 2002. ...Economist Michael
Darda points out that the University of Michigan's year-ahead inflation survey hit 5.2% in May, the highest reading since 1982. Yet some at the
Fed continue to insist that inflation expectations are "well-anchored." Anchored on what planet? The price for this Fed blunder is going to be
very high, and we don't mean only at the grocery store or gas station. If inflation doesn't fall, the Fed will have no choice but to start raising rates
again, perhaps rapidly and perhaps soon. That could put a damper on any economic recovery, especially if it coincides with the huge tax increase that Barack Obama is promising next year. ...Republicans may be
punished this November for forgetting that the Reagan policy mix had two levers - tax cuts and stable money. The Bush Administration got tax
policy right. Its tragic error was falling for the siren song of dollar depreciation, and abetting a Federal Reserve that even now seems not to comprehend the damage it has done.
Sunday, May 25, 2008 ~ 8:12 p.m., Dan Mitchell Wrote A top cast of European statesmen has issued a blistering denunciation of financial markets and called for a creation of a pan-EU body to protect
the citizens against the "social risk" posed by modern capitalism. ..."Free markets cannot ignore social morals. Decent capitalism needs effective
public policy. But when everything is for sale, social cohesion melts and the system breaks down," it said. The letter is signed by former premiers
and finance ministers from Europe's socialist bloc, including ex-German Chancellor Helmut Schmidt, France's Lionel Jospin and Michel Rocard, and former Commission chief Jacques Delors. While the initiative comes
from the Left, it is in tune with the views of French president Nicolas Sarkozy and German Chancellor Angela Merkel. Both have called for
measures to clamp down on "speculation". The fulminating text is the clearest evidence yet of the mounting drive for an EU-wide "super
regulator"... European critics of Anglo-Saxon "casino" capitalism have seized on the credit debacle as a chance to clip the wings of the City and
to extend EU jurisdiction deeper into financial affairs - a jealously-guarded domain of EU member states.
Saturday, May 24, 2008 ~ 5:47 p.m., Dan Mitchell Wrote: Obama would save grandma and grandpa by bankrupting their grandchildren. He has proposed lifting the tax cap on earnings subject to
the 12.4% Social Security tax, which now covers only the first $102,000. As George Will points out, a "Chicago police officer married to a
Chicago public-school teacher, each with 20 years on the job, have a household income of $147,501, so you (Obama) would take another $5,642 from them." As Michael Tanner of the Cato Institute points out,
eliminating the cap would be the largest tax increase in American history - some $1.3 trillion over the first 10 years. "It would give the United
States," Tanner says, "one of the highest marginal tax rates in the industrialized world, with the potential for seriously disrupting economic
growth." The Heritage Foundation analyzed the effect of eliminating the earnings cap. Heritage found that the take-home pay of 10.3 million
workers would be reduced by an average of $5,650 in the first year alone. Taxes would be raised on four million workers over the age of 50. Taxes
would also be raised on 3 million small-business owners who file their taxes as individuals. By fiscal 2015, the number of job opportunities lost
would exceed 865,000 and personal savings would decline by more than $55 billion.
Friday, May 23, 2008 ~ 12:13 p.m., Dan Mitchell Wrote: Gun control laws will not protect us from murderers. We need protection from the criminal justice system politicians have created. ...A New York
Times study (4/28/06) of the city's 1,662 murders in 2003-2005 found that 90 percent of the murderers had criminal records. A Massachusetts study
reported that on average, homicide offenders had been arraigned for nine prior offenses. John Lott's book, "More Guns, Less Crime," reports that
in 1988 in the 75 largest counties in the U.S., over 89 percent of adult murderers had a criminal record as an adult. ...If there is one clear basic
function of government, it's to protect citizens from criminals. When government failure becomes so apparent, as it is in the murder of a police
officer, officials seek scapegoats and very often it's the National Rifle Association and others who seek to protect our Second Amendment right
to keep and bear arms. We hear calls for stricter gun control laws when what is really needed is more control over criminals. There are many
third-party liability laws. I think they ought to be applied to members of parole boards who release criminals who turn around and commit violent
crimes. As it stands now, people on parole boards who release criminals bear no cost of their decisions. I bet that if members of parole boards
were held liable or forced to serve the balance of the sentence of a parolee who goes out and commits more crime, they would pay more attention to the welfare of the community rather than the welfare of a
criminal.
Friday, May 23, 2008 ~ 11:47 a.m., Dan Mitchell Wrote: McCain's cap-and-trade system would have a bureaucracy set a limit for CO2 emissions and auction tradable permits to carbon-emitting
companies. McCain says the revenue would be "put to good use." Specifically, "We will add to current federal efforts to develop promising
technologies. ... We will also establish clear standards in government-funded research, to make sure that funding is effective and focused on the right goals." We've heard that before. You'd think McCain
would have learned that government isn't cut out for this sort of thing. ...Fred S. Singer, president of the Science & Environmental Policy
Project, told the Heartland Institute in 2007, "All these schemes are quite ineffective in reducing the global growth of atmospheric CO2 -- never
mind in having any effect on climate. The schemes do have one thing in common: They will damage the U.S. economy and hurt the pocketbooks of every consumer..." McCain's hero is Teddy Roosevelt, a hectoring,
activist president. To justify government interference in our lives, it helps to have a crisis. In Islamic extremism, McCain has his foreign affairs crisis. In global warming, he has his domestic crisis.
Friday, May 23, 2008 ~ 10:10 a.m., Dan Mitchell Wrote: It is not exactly a distinction that he had in mind, but seven years into his presidency, George W. Bush is in line to be the first president since World
War II to preside over an economy in which federal government employment rose more rapidly than employment in the private sector. …the increase did reverse a substantial decline under Mr. Bush's most
recent predecessor, Bill Clinton. …Under the current president, federal job growth has averaged 0.73 percent per year, but employment rolls at
state and local governments have grown even more rapidly, at rates of 0.88 percent for state governments and 1.21 percent for local governments.
Thursday, May 22, 2008 ~ 5:21 p.m., Dan Mitchell Wrote: Prime Minister Sergei Stanishev spoke extensively on a number of topics in the morning talk show of the private broadcaster bTV. …People were
the Cabinet's main concern: "Every time, when we took measures, which might have appeared rightist-leaning, we sought for the social aspect."
the PM said. "For example, after the flat tax introduction, by the end of April 2008 the incomes for the budget increased by 41 per cent, which gives us more resources for social activities."
Thursday, May 22, 2008 ~ 4:54 p.m., Dan Mitchell Wrote: Most of the great problems we face are caused by politicians creating solutions to problems they created in the first place. …The Community
Reinvestment Act of 1977, whose provisions were strengthened during the Clinton and Bush administrations, is a federal law that mandates or intimidates lenders to offer credit throughout their entire market and
discourages them from restricting their credit services to high-income markets, a practice known as redlining. The Community Reinvestment
Act encouraged banks and thrifts to make so-called "no doc" and "liar" loans to customers who had no realistic ability to pay them back. A
decade of monetary expansion by the Federal Reserve Bank, contributing to the housing bubble, encouraged lending institutions to take risks they otherwise would not have taken. Government actions created the
subprime crisis, and now government-proposed "solutions," such as foreclosure holidays, bailouts and further regulation of financial institutions, to the problems they created will create more problems.
Wednesday, May 21, 2008 ~ 6:23 p.m., Dan Mitchell Wrote: European Union Tax Commisioner Laszlo Kovacs said yesterday that there is support among European finance ministers for a tightening on
tax haven rules, but it will take some time for new regulations to be passed as Austria and Luxembourg are dragging their heels. …Any change in the rules would require unanimous backing from EU member
states, and the German Finance Minister Peer Steinbrueck acknowlegded that Austria and Luxembourg are reluctant to sign up because it would put an end to their secretive banking practices.
Wednesday, May 21, 2008 ~ 6:04 p.m., Dan Mitchell Wrote: Alistair Darling will this week offer an olive branch to multinationals in an attempt to head off a threatened corporate exodus from Britain. He
will try to defuse a row over the taxation of foreign profits by insisting Treasury reforms are not intended as a revenue-raising measure. …The
Sunday Times revealed a fortnight ago that a powerful delegation from the secretive Multinational Chairmen's Group had visited Downing Street to lobby Gordon Brown and Darling on the issue. …They warned that if
the proposals on intellectual property went ahead, big companies might have to pay hundreds of millions of pounds more in tax. The Treasury plan would speed the move of corporate headquarters out of Britain to
lower-tax regimes, the delegation said. …Several high-profile companies, including Shire Pharmaceuticals and United Business Media, have already announced they will move out of the UK to Ireland to pay less
tax. Several others, including WPP, GSK and Astra Zeneca, have said they are considering their options.
Tuesday, May 20, 2008 ~ 4:19 p.m., Dan Mitchell Wrote: VAT efficiency is affected adversely by the level of the statutory rate and the ratio of tax administration costs to net revenue… The strong
significance and negative sign of the estimated coefficient of the tax rate is consistent with the cross-country results reported by Agha and Haughton (1996) that high VAT rates discourage compliance.
Tuesday, May 20, 2008 ~ 4:00 p.m., Dan Mitchell Wrote: Gavin Carney, an Australian nephrologist, held a press conference in Canberra recently to urge that people be allowed to sell their kidneys.
"The current system isn't working," he was quoted in the Sydney Morning Herald. "We've tried everything to drum up support" for organ donation,
but "people just don't seem willing to give their organs away for free." For $50,000, however, some Australians probably would donate organs.
This is the amount that Dr. Carney, a professor at the Australian National University, suggests the federal government, "with proper
ethical controls," should offer willing donors. ...Dr. Carney wants to keep desperate patients away from black markets. But until the kidney
shortage is resolved, patients in Australia - along with those in countries all over the developed world - will continue to resort to them. ...Because
of the global organ shortage, thousands of patients die unnecessarily each year for want of a kidney. ...We don't want to open up that type of
exploitation," warned Nicola Roxon, Australia's federal minister for health, when she heard Dr. Carney's proposal. But he is not promoting a
free-for-all. His goal is a regulated, transparent regime backed by the rule of law and devoted to donor protection.
Monday, May 19, 2008 ~ 5:47 p.m., Dan Mitchell Wrote: Legislation pending in the Senate might warm environmentalists' hearts, but not because of potential cuts in carbon emissions. Their interest is in
the heavy economic costs the plans would inflict. ...None would affect climate change. All, however, would carry heavy economic losses. Naturally, the environmentalists, having pushed the environment down
their list of concerns, like that. It's no surprise that the most expensive of the three is the Warner-Lieberman bill. The Environmental Protection
Agency reckons it could cost as much as $3 trillion a year in lost GDP. In an economy of roughly $14 trillion, that's a significant loss. ...Much of the
pain would be caused by increases in gasoline and electricity prices. The Science Applications International Corporation calculates that Lieberman-Warner by 2030 would boost gasoline prices from 60% to
144% while electricity prices would be up 77% to 129%. Hit hardest by higher energy prices: The poor. The National Center for Policy Analysis points out that energy costs consume 15% of the poorest households'
income while the average household spends 3% on energy. Who is going to feel the pinch more? Richard Rahn, meanwhile, points out that the climate-change alarmists continue to peddle dubious science: As a consequence of what we now know was an overblown global-warming scare, everyone on the planet is paying substantially
more for food and fuel than is necessary. Despite the prediction of all the major climate models, the Earth has been getting cooler since 1998. At
first, it was not considered a big deal because temperatures fluctuate from year to year. However, the drop has now been going for a decade, with another big drop last year. The global warming zealots have just
been handed another rude shock, when the peer-reviewed journal, Nature, reported on May 1 that according to a new (and hopefully improved) climate model, global surface temperatures may not increase
over the next decade. Roger A. Pielke, environmental studies professor at the University of Colorado, and not previously a global warming skeptic,
reacted to the Nature article: "Climate models are of no practical use beyond providing some intellectual authority in the promotional battle
over global-warming policy." Hudson Institute environmental economist Dennis Avery said: "The Earth's warming from 1915 to 1940 was just
about as strong as the "scary" 1975 to 1998 warming in both scope and duration - and occurred too early to be blamed on human-emitted CO2.
The cooling from 1940 to 1975 defied the Greenhouse Theory, occurring during the first big surge of man-made greenhouse emissions. Most recently, the climate has stubbornly refused to warm since 1998, even
though human CO2 emissions have continued to rise strongly." ...You may wonder - if the data from the last decade show the Earth is not getting warmer, and the climate models have been making incorrect
predictions - why are so many in the political and media classes continuing to shout about the dangers of global warming and insisting the
"science" is settled when the opposite is true. (You may recall that Copernicus and Galileo had certain problems going against the conventional wisdom of their time.)
Monday, May 19, 2008 ~ 3:12 p.m., Dan Mitchell Wrote: Despite the political myth that government is protecting us from big businesses charging monopoly prices, the cold fact is that far more
government actions have been taken against businesses that charge low prices than against businesses that charge high prices. The biggest antitrust cases of a century ago were against the Great Northern
Railroad and the Standard Oil Company, both of which charged lower prices than their competitors. The Robinson-Patman Act of 1936 was
called "the anti-Sears, Roebuck law" because it was directed again this and other chains that charged lower prices than smaller retailers could
match. For a long time, there were so-called Fair Trade Laws designed to keep low-cost businesses in general from charging low prices that drive high-cost businesses out of business. Fortunately, enough sanity
eventually prevailed that Fair Trade Laws were repealed. But the emotional needs that such laws met were still there, and today they find
an outlet in hostility to Wal-Mart and other "big box" stores-- especially in San Francisco and other bastions of the liberal left. People have every
right to indulge their emotions at their own expense. Unfortunately, through politics, those emotions are expressed in laws and administrative
decisions by people who pay no price at all for indulging either their own emotions or the emotions of the people who vote for them. That is why
the Constitution tried to erect barriers to government power, of which property rights were one. But, once judges started saying that "the public
interest" over-rides property rights, that left politicians free to call whatever they wanted to do "the public interest."
Sunday, May 18, 2008 ~ 11:11 p.m., Dan Mitchell Wrote: The euro zone's report of better-than-expected first-quarter growth of 0.7% last week vindicated Jean-Claude Trichet's approach to monetary
policy. His European Central Bank has kept interest rates steady at 4% since June despite pressure to follow the U. S. Federal Reserve's example
and open the spigots. The ECB had better steel itself, though, for that pressure will intensify. ...the GDP figures are too robust to suggest that
the Frankfurt-based bankers were wrong to focus on inflation instead of growth. Especially as their easy-dollar colleagues across the Atlantic have been driving up global commodity prices with easier money. ...a
monetary shot in the arm would not only fuel inflation but hurt economic growth as well. Higher consumer prices are eating up real disposable
income, which might decline by as much as 0.5% this year -- the first such fall this decade. ...Printing more euros would only drive up inflation and
further erode disposable income. ...For the time being at least, Mr. Trichet is making clear where his priorities lie. Repeating Friday that
price stability is the ECB's primary goal, he said that "there is no place for complacency." Mr. Trichet suggested that other central banks agree
that their focus must be on calming inflation. "Now we have a world-wide consensus, almost a total consensus in seeing that it's important to stabilize medium-term prices," he said. We'll have to see
whether Fed Chairman Ben Bernanke shares the Frenchman's "total consensus." Luckily for Europe in these economically trying times, Mr.
Trichet's commitment to fighting inflation has been more reliable than his peer's at the Fed.
Saturday, May 17, 2008 ~ 3:12 p.m., Dan Mitchell Wrote: He who finds a six-figure earmark an affront to humanity is prepared to wave through a trillion-dollar climate bill without, as far as anyone can
tell, a single systematic thought about costs and benefits. He who sees "corruption" behind every campaign check goes all compliant when GE,
DuPont and Ford chant that climate policy "will create more economic opportunities than risks for the U.S. economy." Mr. McCain argues that
green energy mandates will leave us better off whether or not man-made global warming is real. This is an error that Mr. Romney wouldn't make –
and one Al Gore makes all the time. Yes, hole-digging can be profitable if government subsidizes hole-digging. For society, however, there is only
cost – measured in the labor and resources diverted to hole-digging from activities that actually fulfill the wants and needs of people. ...Politics is
often a business of adaptive dishonesty, and never more so than when dealing with an issue like climate change. Real solutions are lacking so
politicians can only devote themselves to telling voters what they want to hear while dishing out favors to whatever lobbyists are handy (and Mr.
McCain picked a venue to do both on Monday, a wind turbine factory in Oregon).
Friday, May 16, 2008 ~ 3:30 p.m., Dan Mitchell Wrote: Company bosses who pocket fat bonuses without reason are a "scourge" on society and could be tackled by losing their tax breaks, the chairman
of the euro zone's group of finance ministers said on Tuesday. Jean-Claude Juncker said ordinary workers were being urged to accept only moderate pay increases to avoid stoking inflation, which has hit
record highs in the 15-nation area. ..."We still believe that the excesses of captains of industry we have seen in several countries are really quite
scandalous," Juncker, prime minister and finance minister of Luxembourg, told reporters after a meeting of the euro zone finance
ministers. ..."We are currently examining fiscal instruments that might be brought into play that might combat these excesses," he said.
Thursday, May 15, 2008 ~ 10:10 p.m., Dan Mitchell Wrote: We can't wait to hear how Members of Congress explain their vote this week for the new $300 billion farm bill. At a time when Americans are
squeezed at the grocery store, they will now see more of their taxes flow to the very farmers profiting from these high food prices. This year farm
income is expected to reach an all-time high of $92.3 billion, an increase of 56% in two years, making growers perhaps the most undeserving welfare recipients in American history. ...The bill perpetuates the
so-called Hurricane Katrina gambit that allows farmers to lock in price-support payments at the lowest possible market price, and then sell
their crops later at the highest possible price, and then pocket the high price and a payment from the government for the difference between the
two. They in effect get paid twice for the same bushel of wheat. A bigger scam is the new income limit to qualify for subsidies. Mr. Bush sought a
$200,000 annual income cap, but Congress can't bring itself to go below $750,000. Even that is a farce, because it doesn't include loan programs
and disaster payments, and it allows spouses to qualify for payments too. ...the bill extends the farm welfare net to lentils, chick peas, fruits and
vegetables, and even organic foods. There are new programs for Kentucky horse breeders and Pacific Coast salmon fishermen, and your
tax dollars will help finance the dairy industry's "Got Milk?" campaign. Oh, and you still don't even have to farm to cash in. Hundreds of millions
of dollars will go to landowners based on their "historical planting average" even if they haven't planted a seed in years. ...If you wonder
why urban Democrats would vote for this rural giveaway, the answer is they have been bought off with roughly $10 billion in extra funding for food stamps and nutrition welfare programs.
Wednesday, May 14, 2008 ~ 8:27 p.m., Dan Mitchell Wrote: A flat income tax rate may replace the current 18% and 36% rates within a few years or as early as next year, as three opposition parties are
making recommendations for its introduction, writes Vilaggazdasag. MDF is proposing an 18%, flat income tax in it "National Tax Freedom"
("Nemzeti adószabadság") program, while the Liberals have repeated their recommendation of a 20% income tax. Last week, Fidesz joined
those proposing tax reforms, but the party's proposals are more geared towards supporting families. Details and the exact rate of tax - between
15% and 20% - are expected to be worked out by the fall. However, even if opposition parties agree that a flat tax system is necessary, fierce debate can be expected on the details.
Tuesday, May 13, 2008 ~ 7:45 p.m., Dan Mitchell Wrote: Congress is playing you for a sap. During the housing mania, you didn't lend money at teaser rates to borrowers who couldn't pay, or buy a bigger
house than you could afford. You paid your bills on time. As a reward for that good judgment and restraint, Barney Frank is now going to let you
bail out the least responsible bankers and borrowers. ...Mr. Frank is giving lenders a chance to pass their worst paper onto Uncle Sugar. If
both borrower and lender agree to participate, lenders can accept 85% of the current appraised mortgage value and in return get to dump up to
$300 billion of those loans on the Federal Housing Administration (FHA). Guess which loans they are likely to dump? ...The plan seems to get more
generous by the week, at least if you're an ally of Mr. Frank. The monster he brought to the floor Thursday runs to hundreds of pages. State
governments receive authority to issue $10 billion in tax-exempt bonds to subsidize home purchases and to help subprime borrowers refinance. In a
sop to builders, Mr. Frank also expands the low-income housing tax credit, and he creates a new refundable credit for certain home buyers.
...Then there is the $230 million for housing counseling to be distributed by the Neighborhood Reinvestment Corporation. You might think that all
of this money will simply be disbursed to left-wing activists in the nonprofit world. But at least $35 million is specifically earmarked for
lawyers, who can then pursue foreclosure-related litigation. Now there's a way to help housing markets clear. Also included is this addition to the
Home Owners' Loan Act: "A Federal savings association may make investments, directly or indirectly, each of which is designed primarily to
promote the public welfare . . . through the provision of housing, services, and jobs." Mr. Frank has got to be kidding. Federal savings associations
are lenders regulated by the Office of Thrift Supervision, which was created in the wake of the 1980s savings and loan debacle. Despite the sorry state of bank balance sheets, the Congressman is now telling
federal thrifts to make investments on criteria other than risk and return.
Monday, May 12, 2008 ~ 4:44 p.m., Dan Mitchell Wrote: Some clarity comes from the U.S. Energy Information Administration (EIA), an independent federal agency that tried to quantify government
spending on energy production in 2007. The agency reports that the total taxpayer bill was $16.6 billion in direct subsidies, tax breaks, loan
guarantees and the like. That's double in real dollars from eight years earlier, as you'd expect given all the money Congress is throwing at
"renewables." Even more subsidies are set to pass this year. An even better way to tell the story is by how much taxpayer money is dispensed
per unit of energy, so the costs are standardized. For electricity generation, the EIA concludes that solar energy is subsidized to the tune
of $24.34 per megawatt hour, wind $23.37 and "clean coal" $29.81. By contrast, normal coal receives 44 cents, natural gas a mere quarter,
hydroelectric about 67 cents and nuclear power $1.59. The wind and solar lobbies are currently moaning that they don't get their fair share of
the subsidy pie. They also argue that subsidies per unit of energy are always higher at an early stage of development, before innovation makes large-scale production possible. But wind and solar have been on the
subsidy take for years, and they still account for less than 1% of total net electricity generation. ...The same study also looked at federal subsidies
for non-electrical energy production, such as for fuel. It found that ethanol and biofuels receive $5.72 per British thermal unit of energy produced. That compares to $2.82 for solar and $1.35 for refined coal,
but only three cents per BTU for natural gas and other petroleum liquids. All of this shows that there is a reason fossil fuels continue to dominate
American energy production: They are extremely cost-effective. That's a reality to keep in mind the next time you hear a politician talk about
creating millions of "green jobs." Those jobs won't come cheap, and you'll be paying for them.
Sunday, May 11, 2008 ~ 7:51 p.m., Dan Mitchell Wrote: When I begin to feel homesick for Germany, I have discovered a cheap and easy way out. I simply turn on the TV and listen to a Barack Obama
stump speech. ...Mr. Obama...has promised not only a $160 billion program for new green-collar jobs, a higher minimum wage, affordable health care for everybody, a massive investment in infrastructure and
tax-free status for pensioners who make less than $50,000. All these nice things come with no tax increase for 95% of Americans. Wow! That's Germany-plus! I've been in the U.S. for a while, but if I remember my
home country correctly, all the German comforts come with a price. My grandma has paid 10% of her salary to the public pension system, and her employer has matched the contribution. For our health insurance
everyone has to sacrifice 7% of his or her earnings, which again is matched by the company. Fashionable windmills go along with extra taxes for fuel. A gallon of regular gas in Munich or Berlin costs - fasten
your seat belt - more than $8. Not all of my fellow Germans are happy with this, but the overwhelming majority of my fellow countrymen made their decision a long time ago. They prefer big government. They have
learned to live with growth rates far behind and an unemployment rate far above the U.S.
Saturday, May 10, 2008 ~ 8:30 p.m., Dan Mitchell Wrote: On April 23, less than two weeks after Mr. Nablisi's arrest was made public, Gov. David Paterson signed into law a $1.25 per-pack tax hike on
top of the state's $1.50 per-pack tax. That's in addition to New York City's own $1.50 per-pack tax. Come July 1, New York City's smokers
will be paying on average $9 a pack for legal cigarettes. But if history is any guide, most cigarettes sold will actually be trucked up from Virginia,
or shipped in from China, by "butt-leggers" who can make over $1 million on each tractor-trailer load of smuggled smokes. The blunt fact,
which politicians of both political parties are determined to ignore, is that high cigarette taxes in New York have led to a bloody, decades-long
smuggling epidemic. ...As a state tax enforcement official noted, it soon became "literally more profitable to hijack a cigarette-delivery truck than
an armored truck." More tax hikes followed in the 1990s. City and state records of tax-paid cigarettes show sales plummeting, despite stable
smoking rates. This signals the resurgence of smuggling and large-scale tax evasion. As the Bureau of Alcohol, Tobacco and Firearms said in September 2002 of New York's cigarette smuggling, "Traditional
organized crime is involved, terrorist groups are involved, and street gangs are involved." Rivalry among these groups has resulted in numerous shootings and homicides. ...Politicians continue to use the
health of smokers as their excuse for higher cigarette taxes. This view is myopic. As Gov. Wilson argued three decades ago, high cigarette taxes
are bad public policy because of their effect on the rest of us. In the 1960s and '70s, organized crime exploited high cigarette taxes at our expense. Today we face an even deadlier adversary.
Friday, May 9, 2008 ~ 5:41 p.m., Dan Mitchell Wrote: In their ongoing war against U.S. oil producers, Senate Democrats say they'll slap Big Oil with a windfall profits tax and take away $17 billion in
tax breaks, among other punishments. The planned 25% tax on windfall profits would be imposed on oil company earnings above what the
Senate's wise members decided was "reasonable." ...Senators also want to impose steep penalties on "price gouging" - despite the fact that some
17 separate studies have found it doesn't exist. The plan amounts to little more than an attempt to impose price controls - a socialist tool dressed
up in populist garb. ...As any student who's taken Econ 101 at the local junior college can tell you, higher taxes don't encourage production; they
discourage it. ...They should at least have read the report from their own nonpartisan Congressional Research Service in 2006. ...Over the entire
1980-1986 period," the study said, "the (windfall profits tax) reduced domestic oil production from between 320 million barrels . . . and 1,268
million barrels." The study also concluded: "The effect of reducing domestic oil production was to increase the level of imported oil."
...Revenues from the windfall tax were far less than expected, because producers pumped less and nontaxed imports flooded our market. Compared with a forecast of $393 billion in windfall tax revenues from
1980 to 1988, Congress got a mere $80 billion.
Thursday, May 8, 2008 ~ 8:55 p.m., Dan Mitchell Wrote: ...it has emerged that yet another FTSE100 firm is considering switching its corporate HQ abroad in protest at the UK's increasingly burdensome
corporate tax regime. Sir Martin Sorrel, head of WPP - the world's second largest advertising firm - told the BBC on Monday that if the Treasury introduced proposed rules to tax dividends earned by companies
overseas in the UK, it could tip the balance in favour of relocating the firm's tax residence to a jurisdiction which does not tax such income, with
Ireland likely to be top of the list. ...Sorrel's comments come hot on the heels of decisions by Shire Pharmaceuticals and United Business Media to
set up holding companies in Jersey and relocate their corporate HQs to Ireland to cut their UK tax bills. He went on to point out that WPP already pays a significant sum in tax to the Treasury each year - about
GBP200mn (USD394mn) - and the proposed new rules could add tens of millions of pounds to the company's annual tax bill in the UK. ..."Firms are seriously concerned about the high level and rising complexity of
taxation in the UK and are increasingly prepared to vote with their feet. The Treasury cannot ignore this issue or argue that companies are crying
wolf," said Richard Lambert, Director-General of the Confederation of British Industry (CBI). Politicians fear loss of jobs and tax revenues when companies move their headquarters. ...Over the last decade, 6 per cent of multinationals have
relocated, partly for tax reasons, according to research from Oxford University's Centre for Business Taxation. Companies competing with
rivals based in lower-tax regimes are under pressure to cut their tax bills. ...UBS, the investment bank, predicts a "gradual erosion of governments'
ability to tax". ...there is little reason for governments to panic about the threat of shifting headquarters. Companies will still pay tax on the
factories, sales and other profitable activities in the countries where they operate. ...Kraft, Google, Electronic Arts and Yahoo have all recently
switched their European headquarters from the UK to Switzerland. Ebay, Amazon and Microsoft have moved to Luxembourg. The Netherlands boasts names such as Cisco Systems, Nike and Starbucks. ...Ireland's
success at attracting knowledge-based companies is seen as overly aggressive by some rival governments. Arnauld Montebourg, a French politician, last year accused low-tax Switzerland of "predatory
practices". The Netherlands – which attracted Ikea from Sweden and Gucci from Italy – was lambasted for its approach to taxing mobile income by the Amsterdam-based Centre for Research on Multinational
Corporations, a non-profit research group. "All the empirical evidence indicates that the Netherlands is a tax haven," it said. These criticisms are shrugged off by tax competition advocates, who believe tax
competitiveness encourages investment. ...Richard Lambert, director-general of the CBI, the British employers' federation, says companies "are seriously concerned about the high level and rising
complexity of taxation in the UK and are increasingly prepared to vote with their feet". ...more big companies are considering leaving the UK. International Power, WPP, AstraZeneca and GSK have all hinted that
the matter is under review. ...The UK has also promised to cut the corporation tax further, following a 2 percentage point fall to 28 per cent
this year. Gordon Brown last week told business leaders that one of his aims as prime minister was "to reduce corporation tax even further when
we can afford to do so". Some businesses are clamouring for radical cuts. A recent CBI taskforce called for the corporation tax rate to fall, over
time, to 18 per cent. ...if countries such as Britain become reconciled to losing headquarters to lower-tax rivals, they will pay a price. As well as
shedding well-paid jobs and advisory work, they risk a decline in influence and investment as decision-makers go elsewhere. When world-leading businesses uproot themselves, more is at stake than national pride.
Wednesday, May 7, 2008 ~ 5:31 p.m., Dan Mitchell Wrote: As a state senator in Illinois, he voted to require that dental anesthesia be covered by every health plan for difficult medical cases. Today, the
requirement is one of 43 mandates imposed by Illinois on health insurance, according to the Illinois Division of Insurance. Other mandates
require coverage of infertility treatments, drug rehab, "personal injuries" incurred while intoxicated, and other forms of care. By my count, during
Mr. Obama's tenure in the state Senate, 18 different laws came up for a vote and passed that imposed new mandates on private health insurance.
Mr. Obama voted for all of them. As a presidential candidate, Mr. Obama says people lack health insurance because "they can't afford it." He's
right. But he is also partly responsible for why health insurance is too expensive. A long list of studies show that mandates like the ones Mr.
Obama has championed drive up the cost of insurance for the very people priced out of coverage. A 2008 study by an insurance-industry supported research organization, the Council for Affordable Health Insurance
(CAHI), estimates that mandates increase the cost of basic health coverage by 20% to 50%, depending on the state. Average policies in high-mandate New Jersey cost about $4,000 according to a 2004
insurance survey, much more than the $1,200 charged in low-mandate Wyoming. ,,,The burden of paying for state mandates is usually borne by individuals who buy their own insurance, small employers and others not
covered by ERISA. In total, about half of the people who have insurance bear the brunt of the cost of state mandates. ...If insurers were allowed to
offer "bare-bones" plans – which would be cheaper because they would cover just essential care – many consumers who are priced out of health
insurance now would likely buy these plans instead of living without insurance.
Tuesday, May 6, 2008 ~ 11:47 a.m., Dan Mitchell Wrote: ...the US should take the lead in promoting global co-operation in the international tax arena. There has been a race to the bottom in the
taxation of corporate income as nations lower their rates to entice business to issue more debt and invest in their jurisdictions. Closely
related is the problem of tax havens... an increased focus of international economic diplomacy should be to prevent harmful regulatory competition. In many areas it is appropriate that regulations differ
between countries in response to local circumstances. But there is a reason why progressives in the early part of the 20th century sought to have the federal government take over many kinds of regulatory
responsibility. They were concerned that competition for business across states, and their ease of being able to move, would lead to a race to the
bottom. Financial regulation is only one example of where the mantra of needing to be "internationally competitive" has been invoked too often
as a reason to cut back on regulation. There has not been enough serious consideration of the alternative – global co-operation.
Tuesday, May 6, 2008 ~ 11:03 a.m., Dan Mitchell Wrote: Thousands of wealthy Germans are considering exile as an alternative to seeing their assets eroded by Germany's first capital-gains tax and a
proposed inheritance tax. Most of those concerned are industrialists -- successful members of the Mittelstand. The exodus bears comparison with
the crisis in the U.K. over taxing nondomiciled residents, who comprise a large proportion of the country's financial-services community. ..."Up to
500 of the wealthiest people in Germany are leaving for Switzerland, Austria and the U.K. each year for tax reasons. A few years ago that number might have been just 100," according to Stephan Scherer, a
partner of international law firm Shearman & Sterling in Mannheim, Germany. Capital-gains taxes, which can be as high as 25%, will come into force in Germany at the beginning of 2009.
Monday, May 5, 2008 ~ 7:02 p.m., Dan Mitchell Wrote: United Business Media plc (UBM) has announced plans to relocate its tax residency from the UK to the Republic of Ireland to take advantage of the
latter country's "less complex system of taxation". Under the proposals, a new UBM holding company would be created which is UK-listed,
incorporated in Jersey, but resident for tax purposes in Ireland. If the plan is approved by shareholders, UBM will be following in the footsteps
of drug maker Shire, which on 15th April announced proposals for a similar corporate structure to "protect the group's taxation position".
...For historical reasons, the United Business Media group's parent company has been tax resident in the UK. However UBM has been progressively disposing of its UK media businesses, including the Anglia,
HTV, Meridian and Channel 5 television franchises, Express Newspapers, NOP market research and Exchange & Mart. "Consequently, the Board of UBM now believes that the long term interests of UBM and its
Shareholders are best served by the adoption of an international holding company corporate structure that domiciles UBM's parent company in
the Republic of Ireland, which has a less complex system of taxation," the company's statement explained. It continued: "In contrast, the UK tax
system imposes tax on all companies in a worldwide group, and consequently UBM has had to manage the interaction between the UK tax system and the tax systems of the multiple countries in which UBM
operates. This has given rise to both significant compliance costs and risks of inadvertent tax charges arising."
Monday, May 5, 2008 ~ 6:23 p.m., Dan Mitchell Wrote: It was announced on Thursday that the Korean government's first phase of corporate tax cuts will be coming into force next month. In a radio
interview, Vice Finance Minister, Choi Joong Kyung announced that the corporate tax rate would be cut from 25% to 22% in June, in a move designed to assist in the government's drive to improve the business
environment in Korea. There are plans to cut the rate still further in coming years, bringing it down to between 10% and 20% by 2013. According to regional media reports, Choi observed that: "A high
corporate tax rate scares away investors, takes away chances of creating new jobs."
Sunday, May 4, 2008 ~ 2:25 p.m., Dan Mitchell Wrote: Polish Prime Minister Donald Tusk has announced that the government will introduce the flat rate income tax in 2011. "The aim of this
government is to simplify and lower taxes" - Tusk declared in an interview for "Polityka" weekly. He emphasized that the bill on flat tax,
according to an "initial agreement" between coalition parties: PO and PSL will be debated by the Polish Parliament after the presidential elections in 2010 - in the last year of this parliament's term.
Saturday, May 3, 2008 ~ 7:24 p.m., Dan Mitchell Wrote: Canada's 1917 income-tax act was just 10 pages long; today's comprises more than 1,100 pages in each language. The forms and publications
(www.cra-arc.gc.ca) are trackless thickets of legalese. Even the simple basic personal tax form (due today!) is a challenge, so most of us need
professionals to fill it out. Very few corporations can do without tax pros. ...Income tax is so complicated because the system does so many things.
Home-relocation loans, "grubstakers' shares," northern residents, "ecological gifts," the list of special deals goes on and on. ...the Canada
Revenue Agency needs 44,000 employees, to joust with the countless expensive private-sector tax wizards who help corporations and the rich exploit every loophole and argue for more. None of them creates any
wealth; they just haggle over the wealth others create. There is a better way. Imagine everyone paying at one rate, on every dollar earned. You
could "do your taxes" on a postcard. About 20 versions of the flat tax exist already, many in ex-communist countries where a new tax system
was designed without kowtowing to special interests. Alberta has it.
Friday, May 2, 2008 ~ 4:16 p.m., Dan Mitchell Wrote: Unless the government watches closely, the airlines will kill you. That seems to be what many reporters and politicians believe. ..Let me get this
straight. The only reason airlines care about safety is because of the FAA? So without government, multibillion-dollar companies would jeopardize millions of passengers by unsafely flying $50-million
airplanes? The media and politicians suggest that airlines would cut corners to make money, but how would that work exactly? Crashing airliners is a route to bankruptcy, not profits. ..Populists in politics and
the media get attention by scaring people into thinking the skies are dangerous. The politicians want more power and attention; the clueless
media are genuinely scared. The latest "crisis" was launched when the FAA fined Southwest Airlines, which has an excellent safety record, $10.2
million for missing inspection deadlines. When Rep. Oberstar criticized the FAA for being too close to the airlines, the agency sprung into
overreaction. "An industry-wide 'audit' commenced, and FAA inspectors set about finding something -- anything -- to show Mr. Oberstar and other
Congressional overseers that the agency was up to the job of enforcing federal maintenance requirements to the letter," said The Wall Street
Journal. One result was the cancellation of 3,300 American Airlines flights and the stranding of 250,000 passengers over several days... We need to rethink the premise that government inspections keep us safe.
Thursday, May 1, 2008 ~ 6:17 p.m., Dan Mitchell Wrote: While it's politically popular to impose confiscatory taxes on America's 40 million tobacco smokers, there are a number of consequences one might
consider, but let's start out with a quiz. If a carton of cigarettes sells for $160 in New York City, and $35 in North Carolina, what do you predict
will happen? If you answered tons of cigarettes will be going up I-95 from North Carolina to New York City, go to the head of the class. ...Some
smugglers are good people who differ little from the founders of our nation such as John Hancock, whose flamboyant signature graces our Declaration of Independence. The British had levied confiscatory taxes on
molasses, and John Hancock smuggled an estimated 1.5 million gallons a year. ...Like Hancock, some of today's cigarette smugglers are providing
a service to their fellow man caught in the grip of confiscatory taxation. ...People in government or those in pursuit of a do-good agenda think
they know better and think they have a right to use government's brute force to hinder peaceable voluntary exchange. In comes my hero the
smuggler to the rescue. ...The easy solution to cigarette smuggling, and its attendant activities, is to eliminate the confiscatory taxes. |
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