CF&P E-mail Update, February 15, 2005

The Market Center Blog

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Center for Freedom and Prosperity's E-mail Update

1) Richard Rahn: International bureaucracies threaten global prosperity

2) Over-regulation discouraging foreign companies from U.S. market

3) Tax competition could force lower corporate tax in America

4) Law-of-the-Sea treaty threatens free markets and national sovereignty

5) Supply-side tax cuts generating more revenue for government

6) Low-tax states grow faster and create more jobs

7) Reaction to State of the Union Address

8) UN urges repeal of Bush tax cuts

9) Foreign aid undermines economic growth in poor nations

10) Schizophrenic OECD urges lower tax rates in Australia

11) Is the European Commission pro-tax competition?

12) Flat tax most ethical system, says legal scholar

13) Will government get out of the way of growth?

14) Leftists mischaracterize Social Security reform

15) Kyoto is an economic weapon aimed against America

 

1) Richard Rahn: International bureaucracies threaten global prosperity

International bureaucracies threaten global prosperity. Richard Rahn's Washington Times column is an excellent review of how international bureaucracies have become impediments to world economic growth - often by pursuing policies directly at odds with their charters. Instead of subsidizing these destructive bureaucracies, Dr. Rahn writes that the the U.S. government should work to curtail the pernicious activities of organizations such as the OECD:

[Excerpt from Dr. Rahn's op-ed:]

Are you aware we are increasingly regulated and even taxed by international organizations that are undermining the protections guaranteed by the U.S. Constitution? ...From the end of World War II, many new multinational organizations have been created, most with the ideal of promoting world peace and prosperity in one form or another. ...These organizations' professional staff quickly learn they are largely in charge of setting the agenda and operational structure. ...Bureaucrats, being bureaucrats, tend to want enhanced power and budgets. They can increase power by "mission creep," expanding the original purpose, which requires more staff and money. ...The following are a few examples of the problem. ...The World Bank has a 50-year record of mismanagement, and by lending almost exclusively to governments, it has ended up primarily promoting statism rather than free markets. This undermines economic growth and saddles poor nations with repaying loans that should have never been made. The International Monetary Fund (IMF) has a long record of insisting countries increase taxes, which has stunted rather than promoted economic growth. And the IMF's willingness to bail out states that have been fiscally mismanaged probably added to the systemic risk of world finance by diminishing the penalties for countries that behave badly. The Organization for Economic Cooperation and Development (OECD) charter includes responsibility for promoting policies that "contribute to sound economic expansion" and "extend the liberalization of capital movements." Yet, it now promotes limiting tax competition, which will undermine economic growth in its member states and the world at large. And it promotes blanket information-sharing that, by reducing privacy protections, will weaken the free flow of capital. ...Both our liberties and our pocketbooks will face continued danger unless adequate oversight is brought to the international institutions. Our elected representatives need to wake up before it is too late. [Link to full article below:]

February 11, 2005, The Washington Times, By Richard W. Rahn, Global protectors or oppressors?
http://www.washingtontimes.com/commentary/20050210-084104-2880r.htm

The Market Center Blog, February 11, 2005
http://www.freedomandprosperity.org/blog/2005-02/2005-02.shtml#117

 

2) Over-regulation discouraging foreign companies from U.S. market

A securities lawyer based in London explains why the Sarbanes-Oxley law is leading foreign companies to withdraw from U.S. financial markets. The law ostensibly was enacted to prevent future Enron scandals, but the main effect is to impose senseless costs on honest companies. It also is highly unlikely that the law would stop dishonest people in a company from engaging in Enron-type actions:

[Excerpt from the Wall Street Journal:]

Talk to any European company with a U.S. listing right now and the discussion will soon turn to deregistration -- that is, the termination of U.S. reporting obligations and escape from corporate governance and related requirements under the Sarbanes-Oxley Act. There is unprecedented interest in this subject among European corporations, and perhaps a new sense of momentum. Currently four U.K. companies -- ITV, mmO2, Premier Farnell, and United Business Media -- are taking active steps toward deregistration, and numerous others here and on the Continent have signaled their eagerness to deregister if they can find a way to do so. Indeed, on Monday, ITV shareholders voted overwhelmingly in favor of plans to cash out unwanted U.S. shareholders as a prelude to deregistering. The rush to delist and deregister is, in the first instance, about money: Being a U.S. reporting company is about to get a whole lot more expensive. This is because of Section 404 of the Sarbanes-Oxley Act, which requires reporting companies to produce a detailed assessment of their internal control regime, together with an auditors' attestation report on that assessment. For non-U.S. companies, this requirement is currently due to come into force for financial years ending after July 15, 2005. The Section 404 attestation report looks to be phenomenally costly. ITV, for example, has claimed that if it succeeds in deregistering it will save £4 million this year and £3 million annually thereafter. A significant chunk of this can be traced to Section 404 compliance. ...This has not been lost on the SEC. In a speech at the London School of Economics on Jan. 25, SEC Chairman William H. Donaldson indicated that the SEC will consider delaying the effective date of the Section 404 internal-control requirements for non-U.S. registrants -- it is now widely expected that they will be deferred beyond the end of 2005 at least. In the same speech, Mr. Donaldson signalled clearly that new SEC rules on deregistration will be forthcoming soon: "We should seek a solution that will preserve investor protections without inappropriately designing the U.S. capital market as one with no exit." His remarks appeared to be aimed at slowing the rush to deregister and persuading non-U.S. registrants to adopt a wait-and-see attitude to their U.S. listings. [Link to full article below:]

February 9, 2005, The Wall Street Journal, By Daniel Epstein, Goodbye, Farewell, Auf Wiedersehen, Adieu . . .
http://online.wsj.com/article/0,,SB110791562792149666,00.html?mod=opinion&ojcontent=ote p (subscription required)

The Market Center Blog, The Market Center Blog, February 9, 2005
http://www.freedomandprosperity.org/blog/2005-02/2005-02.shtml#091

 

3) Tax competition could force lower corporate tax in America

The Wall Street Journal has a thorough article on the worldwide shift to lower tax rates. Tax competition is the driving force, and even US policy makers are being pushed in the right direction:

[Excerpt from Wall Street Journal:]

European countries have been steadily slashing corporate-tax rates as they vie for foreign investment, potentially adding to pressure on the U.S. for similar cuts as it weighs a tax overhaul. Following the lead of Ireland, which dropped its rates to 12.5% from 24% between 2000 and 2003, one nation after another has moved toward lower corporate rates with fewer loopholes. The Netherlands, the second most popular European target for U.S. investment, recently joined the movement, lowering its corporate rates by three percentage points to 31.5% and simplifying its tax structure. The corporate-tax cutters of recent years stretch from Portugal, where the rate has dropped 10 points to about 27%, to Austria, down nine points to about 25%. Even Germany, which has Europe's highest rate and has bitterly opposed the plummeting tax rates elsewhere in the region, has done some dramatic trimming -- from as high as 56% six years ago, according to data from KPMG LLP, to 38.3% last year. Germany's trims leave the standard U.S. rate -- about 40% including average state taxes -- above that of every country in Europe, according to separate studies by the Organization of Economic Cooperation and Development and KPMG. ..."We are living in a global economy and we compete in a global economy, and if our corporations are competing against societies that don't tax their corporations as much, we have to consider that," says John Breaux, a former Democratic senator from Louisiana and the co-chairman of a new White House-sponsored tax-reform panel, in an interview. The European tax rivalry has accelerated with the European Union's expansion this year to include Eastern European members like Poland, which cut its corporate rates to 19% from 27% last year. ...Bush administration officials have saluted the corporate-tax cutting in Europe. Last November in London, Treasury Secretary John Snow said of the Irish government, "I applaud them and believe they ought to be emulated." [Link to full article below:]

January 28, 2005, The Wall Street Journal, By Glenn R. Simpson, As Europe Cuts Corporate Tax, Pressure Rises on U.S. to Follow
http://online.wsj.com/article/0,,SB110687085522438730,00.html?mod=home%5Fpage%5Fone %5Fus   (subscription required)

The Market Center Blog, January 28, 2005
http://www.freedomandprosperity.org/blog/2005-01/2005-01.shtml#286

 

4) Law-of-the-Sea treaty threatens free markets and national sovereignty

Phyllis Schafly's Townhall.com column explains why a U.N. treaty that Ronald Reagan rejected more than 20 years ago is still a bad idea today:

[Excerpt from Mrs. Schafly's article:]

The United Nations Convention on the Law of the Sea was a terrible idea when then-President Reagan refused to sign it in 1982 and fired the State Department staff who helped negotiate it. It's an even worse idea today because of the additional dangers it poses. ...The LOST is grounded in such un-American and un-Republican concepts as global socialism and world government. There is not much of a constituency today for giving more power and wealth to the United Nations, whose officials just committed the biggest corruption in history (oil-for-food) and continually use the United Nations as a platform for anti-American diatribes. LOST is so bad that it is a puzzlement how anyone who respects American sovereignty could support it with a straight face. LOST would give its own creation, the International Seabed Authority, the power to regulate 70 percent of the world's surface area, a territory greater than the Soviet Union ruled at its zenith. LOST would give the authority power to levy international taxes, one of the essential indicia of sovereignty. This authority power is artfully concealed behind direct U.S. assessments and fees paid by corporations, but the proper word is taxes. LOST would give the authority power to regulate ocean research and exploration. The LOST would give the authority power to impose production quotas for deep-sea mining and oil production. LOST would give the authority the power to create a multinational court system and to enforce its judgments. ...The real purpose of LOST is to force the United States to use our wealth and technology to mine the riches of the sea and turn them over to a gang of Third World dictators who are consumed with envy of America. [Link to full article below:]

February 7, 2005, Townhall.com, by Phyllis Schlafly, Opportunity knocking: defeat Law of the Sea Treaty
http://www.townhall.com/columnists/phyllisschlafly/ps20050207.shtml

The Market Center Blog, February 8, 2005
http://www.freedomandprosperity.org/blog/2005-02/2005-02.shtml#083

 

5) Supply-side tax cuts generating more revenue for government

Unlike the 2001 tax cut (which focused on rebates and tax credits), the 2003 tax cut was dominated by supply-side rate reductions (including not only the lower tax rates on dividends and capital gains, but also the immediate implementation of the lower income tax rates that were approved in 2001 but not scheduled to take effect until 2004 and 2006). These supply-side tax rate reductions significantly boosted economic performance, and this has resulted in a lot more revenue for government. But as the Tax Foundation explains, government spending is growing much too fast, so most of this new revenue is not being used for deficit reduction:

[Excerpt from Tax Foundation report:]

While much of Washington's attention will be on the $368 billion deficit that CBO projects for 2005, the real story is CBO's forecast of tax revenue collections. CBO estimates that federal tax revenues will total $2.057 trillion for FY 2005-$177 billion more than was collected last year, an increase of 9.4 percent. This surge of new tax revenues for the federal Treasury is having a limited effect on lowering the federal deficit because spending continues to grow at a relatively rapid pace. CBO projects FY 2005 outlays to top $2.425 trillion, a 5.8 percent (or $133 billion) increase above last year's level. This growth rate is two and one-half times the rate of inflation and excludes any forthcoming appropriations for the war in Iraq. If spending were held to the rate of inflation rate this year (2.4 percent), the budget deficit could be trimmed to $290 billion, rather than the projected $368 billion. [Link to full article below:]

January 26, 2005, Tax Foundation, By Scott A. Hodge, Fiscal Facts: CBO Forecast Shows Runaway Spending—Not Tax Cuts—Causing Deficits
http://www.taxfoundation.org/ff/cbo-forecast.html

The Market Center Blog, February 7, 2005
http://www.freedomandprosperity.org/blog/2005-02/2005-02.shtml#074

 

6) Low-tax states grow faster and create more jobs

A Nationalreview.com column examines Nevada's impressive performance. The absence of income taxes has helped the state attract jobs and capital from inefficient high-tax states such as California. The presence of tax competition between states is a powerful force for better tax policy. States with high burdens of government inevitably fall behind and this often leads voters to punish the politicians who caused the problem - as happened in California when voters replaced Gray Davis with Arnold Schwarzenegger in the governor's mansion:

[Excerpt from Mr. Kaza's article:]

Are tax rates a factor in job growth and economic development? Nevada, which does not levy a state corporate or individual income tax, has recorded the highest percentage employment growth in the U.S. for the second consecutive year. Coincidence? ...Capital investment isn't fleeing to Nevada because of all that water in the desert. Factors influencing any state's robust economic development include the rule of law, infrastructure, presence of a skilled work force, consistent regulatory policy, access to markets, and favorable tax rates. Nevada's lack of a state corporate or individual income tax has attracted capital from states like California, Arkansas, and Michigan. California has a top corporate rate of 8.84 percent and an individual rate of 9.3 percent - rates that are noticeably higher than the state's desert neighbor. The Golden State's labor market expanded at a much lower rate of 1.1 percent in 2004. Tax rates in Arkansas on capital investment are among the highest in the South. That state's job-creation rate barely budged last year while the U.S. economy created 2.2 million jobs. ...A veritable job-creation machine has existed in No Tax Nevada for a long time. Nevada's economic growth rate of 12 percent has led all 50 states since the last recession ended in 2001. Only one state - Florida - recorded more new jobs (379,000) than Nevada (124,000) in the period. Nevada also led the U.S. in job creation (68 percent) in the record 10-year expansion of 1991 to 2001. Are tax rates a factor in job growth and economic development? Yes, indeed. Nevada's yet another case in point. [Link to full article below:]

February 4, 2005, National Review Online, By Greg Kaza, The Nevada Jobs Machine: A low-tax environment is equating to hot employment in the desert.
http://www.nationalreview.com/nrof_comment/kaza200502040831.asp

The Market Center Blog, February 7, 2005
http://www.freedomandprosperity.org/blog/2005-02/2005-02.shtml#073

 

7) Reaction to State of the Union Address

David Frum highlights the President's powerful support for Social Security reform. Veronique de Rugy, meanwhile, praises the President's anti-spending rhetoric, but asks whether he will use his veto pen to block big government:

[Excerpt from Mr. Frum's diary:]

The president left no doubt that Social Security will be his supreme priority in this second term - and this is as it should be. Nothing this president can do at home will have longer and more profound consequences than the creation of ownership accounts. Tax changes come and go: The great tax reform of 1986 was undone in part in 1991 and then again in 1993 and was very nearly unraveled altogether by the year 2000. But the conversion of the unreliable promises of a state pension system into the solid reality of assets in your own hands, protected by the Fifth Amendment to the US Constitution. Bush directly challenged the Democrats' trust-fund myth - the idea that the system will be okay into the 2040s because the Congress has written a lot of IOUs to itself. And he framed the issue exactly correctly: as one of character and courage against self-delusion and cowardice. [Link to full article below:]

[Excerpt from Dr. de Rugy's article:]

There is much to celebrate in George W. Bush's State of Union 2005 address. The president appears really committed to much-needed reform of the Social Security. Equally important, he is proposing to make his tax cuts permanent to encourage competition and move us closer to a simple and fair flat tax. Also, in an effort to restore the fiscal credibility of his administration, the president called on Congress to support a tough budget which reins in domestic spending. The president appears to have learned from his first-term mistakes. His speech Wednesday night contained much more detailed proposals about controlling the size of government. But there still remains the challenge of translating good rhetoric into fiscal actions - even vetoes, if required. President Bush has a very bad track record of doing was he says he will do on the issue of federal spending, largely because he has failed to veto a single bill for spending too much money. ...So when the president tells us that this time the administration is really committed to fiscal responsibility, one can at best be cautiously hopeful. The president, for instance, told us that "America's prosperity requires restraining the spending appetite of the federal government." But then he turns around and undermines his own rhetoric by giving a non-exhaustive list of over two dozens new or expanded spending initiatives such as funding for job-training and community colleges, small businesses to strong funding for leading-edge technology, from hydrogen-fueled cars to clean coal to renewable sources such as ethanol. The good news is that unlike previous State of the Union addresses, the president did tell us that he was planning on cutting the budget and eliminating useless programs. He said "My budget substantially reduces or eliminates more than 150 government programs that are not getting results or duplicate current efforts or do not fulfill essential priorities." ...President Bush's tax agenda is great news for the American people. His Social Security reform agenda is good for workers and retirees. But in order to maximize the economic benefits of these policies, the president needs to put our money where is mouth is and actually deliver on Wednesday night's budget promises. [Link to full article below:]

February 2, 2005, David Frum's Diary, Bush At His Best
http://www.nationalreview.com/frum/diary020205.asp

February 3, 2005, National Review Online, By Veronique de Rugy, Is the Money Where W's Mouth Is? The state of the coming budget.
http://www.nationalreview.com/comment/derugy200502030749.asp

The Market Center Blog, February 3, 2005
http://www.freedomandprosperity.org/blog/2005-02/2005-02.shtml#038

 

8) UN urges repeal of Bush tax cuts

If nothing else, the United Nations knows how to bite the hand that feeds it. This wasteful and corrupt bureaucracy takes more than $1 billion of money from US taxpayers every year, yet it goes out of its way to undermine America. The latest example comes from the UN's annual "World Economic Situation and Prospects," a report that calls for higher taxes in America. The UN's analysis is grossly inaccurate (if the UN's economic theorizing was correct, places like France and Japan would be economic power-houses rather than basket-cases). Indeed, the report would be amusing if American taxpayers did not foot the bill:

[Excerpt from UN report:]

...there is a need to increase private savings, reduce public dissaving or do some of both in the United States. With the savings of both the public and private sectors having declined in recent years, the preferable solution would be to both encourage private sector savings and reduce the fiscal deficit. Long-term interest rates in the United States already appear likely to increase, both for cyclical reasons and because of the uncertainties associated with the imbalances, and this should stimulate savings in the short run. Additional measures will be necessary to raise the underlying savings rate over the longer term. Federal expenditures are likely to be difficult to reduce in the short run, implying that a reversal of earlier tax cuts should be part of the effort to reduce the fiscal deficit. [Link to full article below:]

January 2005, United Nations, World Economic Situation and Prospects 2005
http://www.un.org/esa/policy/wess/wesp2005files/wesp2005.pdf

The Market Center Blog, January 31, 2005
http://www.freedomandprosperity.org/blog/2005-01/2005-01.shtml#316

 

9) Foreign aid undermines economic growth in poor nations

A former World Bank economist explains why good intentions often yield bad results:

[Excerpt from Wall Street Journal:]

But once the immediate needs of the victims are met, the long-term impact of foreign aid must be considered. More is not necessarily better. Aid agencies have a duty -- to recipients, donors and taxpayers alike -- to use the funds as effectively as possible. They should prevent resources being siphoned off by corrupt officials and aid contractors. They should avoid creating "backwash" effects on survivors and their fellow citizens when the flood of foreign aid crowds out potential domestic suppliers. They should strengthen, not undermine, development mechanisms and institutions. And aid agencies should not exaggerate the problems faced, or the benefits resulting from their own efforts, just to ensure a piece of the action and a continued flow of funds. Without diminishing the scale of the tragedy, the number of persons affected should be rigorously checked. There are already reports that the number of refugees in Aceh camps has been significantly inflated by local officials seeking more aid. ...If housing, food, health and education services are supplied free or below cost to refugees for prolonged periods, they may lose the motivation to return to their former jobs or seek new activities. The recently exposed abuses associated with the U.N.'s refugee program in the Palestinian territories and its Oil for Food program in Iraq should be taken as a salutary warning. ...The free goods and services given by foreign donors reduce the demand for domestic producers and distributors. They pre-empt the opportunities for indigenous enterprises to move into new markets. Incomes generated by national responses to disasters are retained domestically. And they are eventually diffused through local communities, stimulating higher employment and consumption levels. When aid programs are based largely on inputs from outside the region, many of the secondary and tertiary benefits remain overseas. [Link to full article below:]

January 27, 2005, The Wall Street Journal, By Keith Marsden, The Aid Flood
http://online.wsj.com/article/0,,SB110679477511737651,00.html?mod=opinion&ojcontent=ote p (subscription required)

The Market Center Blog, January 30, 2005
http://www.freedomandprosperity.org/blog/2005-01/2005-01.shtml#303

 

10) Schizophrenic OECD urges lower tax rates in Australia

 

Just days after endorsing higher taxes in Japan (http://www.freedomandprosperity.org/blog/2005-01/2005-01.shtml#245), the OECD endorses lower taxes in Australia. This sounds like a case of split-personality, but it actually reflects the fact that the Paris-based bureaucracy has some good economists and some bad economists. Unfortunately, the worst economists are associated with the Fiscal Affairs Committee and the anti-tax competition project:

[Excerpt from OECD report:]

...there is still unfinished business in the area of tax reform. A large gap between the top personal marginal income tax rate and the company tax rate creates an incentive for a redefinition of personal income as company income. Also, while the maximum marginal income tax rate is around the average by international standards, it cuts in at a relatively low income level, which may harm work incentives and discourage skill acquisition. An additional important issue is that of effective marginal tax rates which, despite recent reforms, remain high for many low income earners, deterring labour force participation, including by secondary earners and older workers. The priority for tax reform should be the simultaneous continuation of policies which contribute to the lowering of these high effective marginal tax rates, and the raising of the threshold at which the maximum marginal income tax rate cuts in... [Link to full article below:]

January 2005, Organization for Economic Co-operation and Development, Economic Survey of Australia 2004 - Fiscal policy: short-term issues and long-term challenges
http://www.oecd.org/document/27/0,2340,en_2649_201185_34037915_1_1_1_1,00.html

 

11) Is the European Commission pro-tax competition?

The Wall Street Journal has a remarkable news report indicating that the new European Commission has a much more sympathetic view of tax competition than its predecessor. This could be the first step on the long journey to a rejuvenated Europe:

[Excerpt from Wall Street Journal:]

Laying out his ambition to shake up Europe's economy, the new president of the European Commission launched a blunt attack on French and German efforts to end tax competition among European Union countries. Jose Manuel Barroso on Wednesday will present details of his economic-overhaul plans as the top priority of the commission, the European Union's executive. The aim will be to create more growth and jobs by fostering greater cross-border competition, promoting technological innovation and pressing EU members to make their labor markets more flexible and their welfare systems less burdensome on business and employment. ..."Some member countries would like to use tax harmonization to raise taxes in other countries to the high-tax levels in their own countries," Mr. Barroso said in an interview during the World Economic Forum's annual meeting at this Swiss ski resort. "We do not accept that. And member states will not accept it." His support for tax competition is a direct challenge to German Chancellor Gerhard Schroeder, who last year accused new EU members of "tax dumping." Slovakia, Poland and Latvia have 19% corporate-tax rates, compared with 38% in Germany... Mr. Barroso's stance exemplifies the new push for greater economic competition in Europe from Brussels, where the EU bureaucracy is better known for creating regulation than for free-market zeal. [Link to full article below:]

January 31, 2005, The Wall Street Journal, By Marcus Walker, Frederick Kempe and Alan Friedman, Tax Showdown Promised by EU Chief
http://online.wsj.com/article/0,,SB110712918137740577,00.html?mod=economy%5Flead%5Fs tory%5Flsc (subscription required)

The Market Center Blog, February 1, 2005
http://www.freedomandprosperity.org/blog/2005-02/2005-02.shtml#016

 

12) Flat tax most ethical system, says legal scholar

Richard Epstein of the University of Chicago Law School has a column in the New Zealand Herald explaining why a flat tax is the only tax system that is both fair and pro-growth:

[Excerpt from New Zealand Herald:]

...is a flat tax or a progressive tax better? A progressive tax can have a marginal rate for the first dollar at 30 per cent and a marginal rate for the last dollar at 30.1 per cent. Alternatively, a tax also counts as progressive if it starts at zero and goes up to 100 per cent. Anyone who favours a progressive tax must decide which tax rate structure they support out of the billions that could be conjured up. The defender of the progressive tax will point to the undisputed proposition of the diminishing marginal utility of wealth. But it is impossible to come up with a principled, intellectual way of determining the extent of diminishing marginal utility of wealth, just as it is impossible to come up with a principled, intellectual way of setting the marginal increases in the rate of the progressive tax. Thus the task becomes a purely political matter. Without principled argument, it is difficult to avoid a strong division of opinion and clash of wills. Legitimacy becomes difficult to obtain or retain. The process of figuring out the optimal level of progressivity will create uncertainty and dissipate political capital that could be better spent on more productive activities. ...It is ironic that the flat tax is popular in former communist countries. It was Karl Marx, in his Communist Manifesto of 1848, who was among the first to call for "a heavy progressive or graduated income tax" at a time when a flat rate was the norm in the early industrialising countries. It is no accident that every strong defender of limited government has gravitated toward the flat tax. This is true of John Locke, Adam Smith and Friedrich Hayek. Nobody would try to put themselves in that league, but I shall cast my vote with the giants and let those who dissent find some other champion - perhaps Karl Marx. [Link to full article below:]

January 31, 2005, The New Zealand Herald, by Richard A. Epstein, The case for flat taxes
http://www.nzherald.co.nz/index.cfm?c_id=3&ObjectID=10008728

The Market Center Blog, February 1, 2005
http://www.freedomandprosperity.org/blog/2005-02/2005-02.shtml#015

 

13) Will government get out of the way of growth?

A Washington Times column explains that the private sector generate enormous productivity and wealth - but only if government is not too much of a burden. This is why President Bush's reform agenda is so important to US competitiveness:

[Excerpt from Washington Times:]

Almost bursting at the seams with new technologies, U.S. businesses are more able than ever to deliver a good product, on time and at a reasonable price - in a competitive world market that quickly rewards merit and punishes fault. And where is our government in this race for excellence? It is a hindrance - unable to keep up but too clumsy and stubborn to get out of the way. ...Tax reform and Social Security reform are both about economic growth - the one about eliminating tax rules that unduly impede growth, and the other, through private accounts, about allowing more Americans to participate in the benefits of a growing economy. The issue is whether the entrenched management of Government Inc. will give up some of its power and perquisites in the best interests of the shareholders. Will the members of Congress cede to tax reform a large portion of the regulatory (and political) power they now exercise through the tax code? In the case of Social Security reform, will they be willing today to pay the price for preserving the enterprise for future generations of shareholders? [Link to full article below:]

January 31, 2005, The Washington Times, By Ernest S. Christian, Government in the way
http://www.washingtontimes.com/commentary/20050130-094530-1500r.htm

The Market Center Blog, February 1, 2005
http://www.freedomandprosperity.org/blog/2005-02/2005-02.shtml#014

 

14) Leftists mischaracterize Social Security reform

Both the Washington Post (http://www.washingtonpost.com/wp-dyn/articles/
A60749-2005Feb3.html
) and columnist Paul Krugman of the New York Times (http://www.nytimes.com/2005/02/04/opinion/4krugman.html?oref=login&hp) got caught with egg on their face by incorrectly describing the President's Social Security plan. The Washington Post can be forgiven since everyone is scrambling to get details, and sometimes rumors turn out to be false. And the Post even apologized (http://www.washingtonpost.com/wp-dyn/articles/A62106-2005Feb3.html). Krugman kills two birds with one stone , however, by making a  fool of Peter Orzsag from Brookings Institute and himself  by publishing his column after the Post's story has been proven inaccurate.  Krugman either is dishonest or does not care to check his facts before he write his column.  Donald Luskin explains:

[Excerpt from National Review Online:]

According to Krugman's New York Times column Friday, when you divert some of your Social Security payroll-tax dollars into a personal account of the kind that President Bush is proposing, the government is effectively making a loan to you so that you can buy stocks on margin — "speculation that no financial adviser would recommend."After the White House issued a statement noting the error, the Post published a substantially correct version of the story on its website — removing the quotation from Orszag cited by Krugman in America's "newspaper of record"! The New York Times's new motto: all the news the others find unfit to print. [Link to full article below:]

February 4, 2005, National Review Online, by Donald Luskin, Loan Bull: More tortured logic from Paul Krugman on Social Security personal accounts.
http://www.nationalreview.com/nrof_luskin/kts200502040954.asp

The Market Center Blog, February 5, 2005
http://www.freedomandprosperity.org/blog/2005-02/2005-02.shtml#054

 

15) Kyoto is an economic weapon aimed against America

Kyoto is an economic weapon aimed against America. Patrick Michaels of the Cato Institute has an excellent explanation of the climate change treaty that won't change the climate but will cripple the U.S. economy:

[Excerpt from Dr. Michaels' op-ed:]

Kyoto is absurd because it does absolutely nothing measurable within the foreseeable future about planetary temperature, while one nation - the United States - bears almost all the cost. Kyoto is an economic weapon, not a climatic instrument, pointed at America. Europeans, allies or not, know this full well. That is why, for several years, not only did the French and Germans demand the U.S. implement it but do so in the way that would do us the most financial harm. ...The 1-degree warming already observed was accompanied, in developed nations, by doubled life expectancy, quintupled yields of some crops, and democratized wealth. Global warming actually contributed to the crops, thanks to the fertilizing effect of carbon dioxide and the fact that warming the coldest air (the greenhouse effect "signature") lengthens the growing season a bit. Where measured by aircraft, the human warming was concurrent with a decline in maximum winds in destructive hurricanes, no change in the frequency of severe tornadoes, and a general slight increase in precipitation in the agricultural mid-latitudes. Contrary to popular media accounts, the professional climatology literature demonstrates this increase is not disproportionately in extreme rains. [Link to full article below:]

February 13, 2005, The Washington Times, By Patrick J. Michaels, Shifting alliance on climate
http://www.washingtontimes.com/commentary/20050212-093433-8002r.htm

The Market Center Blog, February 14, 2005
http://www.freedomandprosperity.org/blog/2005-02/2005-02.shtml#141

 

Best regards,

Andrew Quinlan
Center for Freedom and Prosperity
President
202-285-0244
quinlan@freedomandprosperity.org
www.freedomandprosperity.org

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