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CF&P  Press Release, March 1, 2011

Center for Freedom and Prosperity Foundation

For Immediate Release
Tuesday, March 1. 2011

New CF&P "Economics 101" Video Explains the
Benefits of Tax Competition

(Washington, D.C., Tuesday, March 1. 2011) The latest "Economics 101" video released today by the Center for Freedom and Prosperity Foundation (CF&P) features Natasha Montague of Americans for Tax Reform explaining the benefit to people and economies when governments compete through tax policy. The video, entitled "Tax Competition: A Powerful Force to Restrain Big Government," shows why public policy is much better when governments have to compete for jobs and investment.

As then-Governor Bill Richardson explained while lowering New Mexico's tax rates, "businesses move to states where taxes are falling, not rising." As globalization makes it ever easier for capital and jobs to cross borders, nations increasingly feel the same pressures to lower tax rates. The subsequent benefits of tax competition are straight-forward: citizens see lower tax rates, while economies grow faster thanks to greater investment.

Yet, as the video explains, politicians often resent having to lower taxes and they get angry when jobs and investment move across borders in response to punitive policy. In hopes of tilting the playing field further in their direction, they want to form tax cartels to insulate themselves from the beneficial pressures of competition. On the international level, global bureaucracies such as the OECD seek to undermine the sovereign right of nations to adopt pro-growth policy. On the domestic level, some politicians work to undermine tax competition through the so-called Streamlined Sales Tax Project, which allows states to tax sales made in other jurisdictions. These policies not only harm local economies, but also reduce everyone's freedom to escape bad policies.


Links to the video: YouTube | Dailymotion | Blip.TV

"With welfare states like Greece and Portugal collapsing," said CF&P Foundation President Andrew Quinlan, "it is more important now than ever to ensure that citizens can escape high tax jurisdictions. Without the pressures of tax competition, politicians would never admit that their big spending welfare states are unsustainable," he concluded.

"Tax competition is constantly under assault from politicians and international bureaucracies," added Dan Mitchell of the Cato Institute. "If high-tax governments are allowed to form an 'OPEC for politicians,' the result will be less freedom and reduced prosperity for all."

Executive Summary

This Economics 101 video succinctly explains why tax competition restrains excessive government since politicians realize that jobs and investment can cross borders if they get too greedy and impose punitive tax policy.


This new video is part of CF&P's Economics 101 video series, which is designed to explain free market concepts, with particular emphasis on reaching students and young people. This is the twelfth video in the series.

The other Econ 101 videos: Four Reasons Why Big Government Is Bad Government; Keynesian Economics Is Wrong: Economic Growth Causes Consumer Spending, Not the Other Way Around; Indexing the Capital Gains Tax to Protect Taxpayers from Inflation; Repealing Obamacare and Restoring a Free Market in Healthcare; The Job-Killing Impact of Minimum Wage Laws; Deficits, Debts and Unfunded Liabilities; Cost of the Internal Revenue Code; Lessons Learned From Sweden; Government Monopolies; Moral Hazard; and Don't Copy Europe's Mistakes.

Web Page for Economics 101 Videos:

CF&P Foundation has also released more than three-dozen mini-documentaries since 2007. These videos include Tax Competition Primer, VAT-Hidden Tax, Global Flat Tax Revolution, Cutting the U.S. Corporate Income Tax, Promoting Prosperity, Obama's So-Called Stimulus, Obama's Deferral Proposal, Case Against Class-Warfare Tax Policy, President Obama's Dishonest Demagoguery on Tax Havens, Six Reasons Why the Capital Gains Tax Should Be Abolished, a three part series on the Benefits of Tax Havens and another three-part series on the Laffer Curve.



For additional comments:
Andrew Quinlan can be reached at 202-285-0244,
Dan Mitchell can be reached at 202-218-4615,




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