The Market Center Blog

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CF&P E-Mail Update,  April 22, 2004

Center for Freedom and Prosperity's E-mail Update

1) Independent Study Says IRS Regulation Will Drive $87 Billion Out of U.S. Banks…

2) Manzullo calls for withdrawal of IRS Interest Reporting Regulation for the Second Time in 3 Months

3) The slow death of the EU savings tax directive.

4) Liechtenstein leader warns that savings tax cartel will cause capital flight from Europe

5) Flat tax would boost growth according to academic study

6) Classical liberals ponder dangers of the EU and tax harmonization.

7) More wasteful government spending

8) Federal Reserve study confirms that higher taxes and spending hurt growth

9) Friend or Foe? What Americans should know about the European Union

10) Free Markets are the Answer … Foreign aid hinders development

11) Justice Department proves that its own persecution of Oracle is unfounded

12) Kerry's Acorn: Kerry's tax plan is still bad, even if it has one good idea.

13) Pro-market policies help Slovakia overcome legacy of communism and corruption

14) Jack Kemp says politicians should fix bad policies instead of persecuting "outsourcing."

15) Think tank blasts UN censorship, argues against bureaucratic control of the Internet

16) Left-wing residents of Massachusetts choose lower taxes by landslide margin.

17) CF&P Blogs and Clips

 

1) Independent Study Says IRS Regulation Will Drive $87 Billion Out of U.S. Banks and Raise Interest Rates; Report also Confirms that Agency Abused Regulatory Process

[CF&P Press Release]

The Internal Revenue Services' (IRA) proposed interest reporting regulation (REG-133254-02) will cause significant and measurable damage to the U.S. economy. This is the finding of a study on the economic consequences of the proposed IRS rule completed by Dr. Jay Cochran of George Mason University's Mercatus Center. The 15-page report, entitled "An Economic Analysis of the Proposed IRS Rules Governing the Reporting of Deposit Interest Paid to Nonresident Aliens," estimates that more than $87 billion of capital will be withdrawn from US financial institutions if the regulation is finalized. The study also warns that interest rates will rise and that the regulation will have an adverse effect on investment and the value of the dollar.

Andrew F. Quinlan, President of the Center for Freedom and Prosperity, welcomed the report, stating, "The Mercatus study demonstrates that the IRS interest reporting regulation could have a severe impact on the US economy. This analysis highlights the reasons why the misguided regulation should be withdrawn immediately." [Link to full press release below:]
http://www.freedomandprosperity.org/press/p04-15-04/p04-15-04.shtml

Link to full study:

March 9, 2004, Mercatus Center at George Mason University's Working Papers in Regulatory Studies: An Economic Analysis of the Proposed IRS Rules Governing the Reporting of Deposit Interest Paid to Nonresident Aliens, by Jay Cochran, III
http://www.mercatus.org/pdf/materials/635.pdf

CF&P's Dedicated IRS Interest Reporting Regulation Web Page:
http://www.freedomandprosperity.org/update/irsreg/irsreg.shtml

Complete List of Opposition to Proposed IRS Rule:
http://www.freedomandprosperity.org/against-irsreg.pdf

News article

April 19, 2004, LawAndTax-News.com, by Mike Godfrey, US Study Predicts That Interest Reporting Regulation Will Drive Away $87 Billion
http://www.tax-news.com/asp/story/story.asp?storyname=15734

 

2) Manzullo calls for withdrawal of IRS Interest Reporting Regulation for the Second Time in 3 Months

Commenting on a George Mason University's Mercatus Center study exploring the economic consequences of the IRS's proposed interest reporting rule, House Small Business Committee Chairman Don Manzullo, called for the withdrawal of the proposed regulation. This is the second time since January that Chairman Manzullo has urged for its removal.

The Chairman said:

 "Capital is the life-blood of small business, which is why I strongly oppose the IRS interest-reporting regulation. The Mercatus study provides additional evidence that this Clinton-era scheme will cause capital flight if it is ever implemented. As Chairman of the Small Business Committee, I once again call on the IRS to withdraw this burdensome regulation."

Link to Rep. Manzullo's January 24, 2004 statement on the three-year anniversary of the proposed rule
http://www.freedomandprosperity.org/congress/manzullo/manzullo.shtml

 

3) The slow death of the EU savings tax directive.

[From The Market Center Blog, Wednesday, April 21, 2004 ~ 1:10 p.m., Dan Mitchell Wrote]

Great news from Switzerland, where leaders have refused to capitulate to the EU's bait-and-switch assault on financial privacy. As the Financial Times acknowledges, the EU wants to use the Schengen convention to eviscerate Swiss bank secrecy laws - even though the EU wants Switzerland to acquiesce to a savings tax directive scheme that ostensibly protects the right to financial privacy. Thankfully, the Swiss are not stupid and are refusing to make huge concessions when they know that the bureaucrats in Brussels have no intention of complying with their side of the deal:

[From the Financial Times:]

The EU savings tax directive is supposed to take full effect next January, but Joseph Deiss, Switzerland's president, said his country could not co-operate without a separate agreement on border controls. The European Commission is pressing Switzerland to sign an agreement on the directive by the end of June, but Bern wants eight further deals with the EU on matters such as agriculture and the environment. Most of those additional deals are completed, but Switzerland is seeking important concessions on the Schengen convention on border controls. ...Bern is seeking concessions to ensure its authorities do not have to exchange information on tax evasion, which is not a criminal offence in Switzerland. Switzerland is also resisting pressure from fellow members of the Organisation for Economic Co-operation and Development, the club of rich nations, over its crackdown on tax evasion. Last year Switzerland blocked agreement on proposals for exchange of banking information between OECD countries from 2006 in order to verify people's tax liabilities. Austria, Belgium and Luxembourg also refused to support the 2006 deadline because of their banking secrecy systems.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT &cid=1079420448193   (subscription required)

April 21, 2004, The Market Center Blog, The slow death of the EU savings tax directive.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#215

Additional blogs and clips on the EU savings tax directive and the European Union:

April 21, 2004, The Market Center Blog, Blair poses false choice on EU constitution.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#214

April 21, 2004, The Market Center Blog, The Brussels power-grab.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#213

April 20, 2004, LawAndTax-News.com, by Ulrika Lomas, Gerhard Schroeder Reiterates Tax Warning For New EU Member States
http://www.tax-news.com/asp/story/story.asp?storyname=15751

April 20, 2004, The Market Center Blog, More take-it-or-leave-it brinksmanship on the EU constitution.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#207

April 20, 2004, The Market Center Blog, EU sides against German exit tax.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#205

April 19, 2004, The Market Center Blog, Will the English save Europe?
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#191

April 18, 2004, The Market Center Blog, The looney left wants Ireland to return to its dismal high-tax past.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#181

April 17, 2004, The Market Center Blog, Democracy in Britain?
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#171

April 16, 2004, The Market Center Blog, Will Swiss politicians sell their people into EU slavery?
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#168

April 16, 2004, The Market Center Blog, British Labor Party rebels against European super-state.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#162

April 16, 2004, The Market Center Blog, Will bloated government turn Europe into a tourist attraction?
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#161

April 15, 2004, Swissinfo, by Jonathan Summerton, Bigger EU prompts second thoughts in Switzerland
http://www.swissinfo.org/sen/swissinfo.html?siteSect=111&sid=4845398

April 14, 2004, TechCentralStation.com, By Marian L. Tupy, Mitteleuropa: German Threat Resurgent
http://www.techcentralstation.be/041404A.html

April 14, 2004, The Market Center Blog, French socialist whines that "shadow of sovereignty" is undermining Europe.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#143

April 12, 2004, The Market Center Blog, Wasteful spending in Brussels.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#123

April 12, 2004, The Market Center Blog, EU bureaucrats continue their assault on Gibraltar.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#121

April 10, 2004, The Market Center Blog, French and German politicians: United in stupidity.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#104

April 10, 2004, Washington Post, By Glenn Frankel, No Permit, No Work: A Price of Joining EU: East Europeans Face New Restrictions
http://www.washingtonpost.com/wp-dyn/articles/A248-2004Apr9.html

April 9, 2004, The Market Center Blog, Will Blair allow a vote on staying in the EU?
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#093

April 8, 2004, Tech Central Station, by Daniel J. Mitchell, The Constitution Europe Needs
http://www.techcentralstation.com/040804A.html

April 7, 2004, The Market Center Blog, Free market tax policies are verboten!
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#072

April 6, 2004, Tax-News.com, by Ulrika Lomas, Swiss Insist Banking Confidentiality Is Non-Negotiable
http://www.tax-news.com/asp/story/story.asp?storyname=15615

April 6, 2004, The Market Center Blog, Is the EU savings tax cartel dead?
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#065

April 6, 2004, The Market Center Blog, Greedy EU bureaucrats lobby for bigger budget.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#063

April 6, 2004, The Market Center Blog, Swiss resist EU duplicity.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#062

April 5, 2004, The Market Center Blog, EU's attack on Microsoft symptomatic of broader problem.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#051

 

4) Liechtenstein leader warns that savings tax cartel will cause capital flight from Europe

[From The Market Center Blog, Monday, April 12, 2004 ~ 2:12 p.m., Dan Mitchell Wrote]

Prince Hans-Adam II notes that the proposed savings tax directive will cause a huge exodus of funds from Europe if it is ever implemented. The Prince specifically cites Singapore and Hong Kong as likely beneficiaries, but the United States and Panama also would be attractive options for oppressed European taxpayers. But the one thing that is certain is that European economies will be further depressed as a result of the capital outflow:

[From Liechtenstein News:]

"If a comprehensive exchange of data in matters of finance develops within Europe and if taxes continue to increase, these assets will be transferred out of Europe, possibly to Singapore or Hong Kong." Thus the statement of the reigning Prince of Liechtenstein, Hans-Adam II, in an interview published in last week's issue of the Austrian news magazine "Profil". Prince Hans-Adam II expects the pressure of the European Union on Switzerland and Liechtenstein to accept a comprehensive exchange of data in financial matters to increase. [Full article can be found at http://www.news.li/]

April 12, 2004, The Market Center Blog, Liechtenstein leader warns that savings tax cartel will cause capital flight from Europe.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#124

 

5) Flat tax would boost growth according to academic study

[From The Market Center Blog, Tuesday, April 6, 2004 ~ 12:27 p.m., Dan Mitchell Wrote]

Flat tax would boost growth according to academic study. Bruce Bartlett has a column in Townhall.com today about the inverse relationship between tax rates and tax collections from the rich. Bruce notes that the rich pay a larger share of the tax burden now that tax rates have been reduced. But his column also reports on a new scholarly study demonstrating that a low-rate flat tax will boost economic growth:

[Bruce Bartlett writes:]

Unfortunately, all taxpayers pay a price for the steeply graduated tax system that has evolved. A new study by economists Steven Cassou and Kevin Lansing shows that a flat rate tax would add significantly to economic growth. Published in the April issue of Economic Inquiry, it concludes that real per capita gross domestic product might rise by 0.143 percentage points per year. This may not sound like much, but it's the difference between doubling in 33 years instead of 36 years. [Link to full article below:]

April 6, 2004, Townhall.com, by Bruce Bartlett, Who pays the taxes?
http://www.townhall.com/columnists/brucebartlett/bb20040406.shtml

April 6, 2004, The Market Center Blog, Flat tax would boost growth according to academic study.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#064

Additional tax blogs and clips:

April 20, 2004, The Market Center Blog, Class warfare tax provision hits the middle class.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#203

April 19, 2004, Tax-News.com, by Mike Godfrey, Snow Supports Introduction Of Flat Tax To Simplify Tax Code
http://www.tax-news.com/asp/story/story.asp?storyname=15727

April 16, 2004, The Market Center Blog, House Majority Leader urges complete repeal of income tax.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#166

April 16, 2004, The Market Center Blog, Tax complexity gets worse.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#165

April 15, 2004, The Washington Times, By Daniel J. Mitchell, Taxes, civil liberties . . .
http://www.washtimes.com/commentary/20040414-091203-4772r.htm

April 15, 2004, The Market Center Blog, Future tax cuts don't help today's economy.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#15-11

April 15, 2004, The Market Center Blog, Former bureaucrat admits IRS targets small business.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#15-10

April 15, 2004, The Market Center Blog, Tax-consumers versus taxpayers.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#153

April 14, 2004, The Heritage Foundation -- WebMemo #476, by Daniel J. Mitchell, A Tax Code Report Card
http://www.heritage.org/Research/Taxes/wm476.cfm

April 13, 2004, The Market Center Blog, Will Schwarzenegger turn into a high-tax European?
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#135

April 13, 2004, The Market Center Blog, Tax amnesty doesn't work when taxes are too high.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#131

April 12, 2004, The Heritage Foundation, by Brian Riedl, Beyond April 15: How Washington Spends Your Taxes
http://www.heritage.org/Press/Commentary/ed041204d.cfm

April 10, 2004, The Market Center Blog, Time for Republican traitors to switch sides.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#102

April 8, 2004, USA Today, By Sandra Block, The trouble with taxes: Too hard and they make no sense
http://www.usatoday.com/money/perfi/taxes/2004-04-08-tax-troubles_x.htm

April 7, 2004 , GovExec.com, By Chloe Albanesius, Tax agency blasted for slow pace of computer upgrades
http://www.govexec.com/dailyfed/0404/040704tdpm1.htm

April 6, 2004, Associated Press, IRS asks workers to spy on bosses
http://www.tdn.com/articles/2004/04/06/biz/news02.txt

April 6, 2004, The New York Times, By Lynnley Browning, In Study, Most Companies Reported No Taxes
http://www.nytimes.com/2004/04/06/business/06tax.html

April 6, 2004, USA Today, By Richard Shelby, IRS has enough resources
http://story.news.yahoo.com/news?tmpl=story&cid=679&ncid=742&e=1&u=/usatoday/200 40406/cm_usatoday/irshasenoughresources

April 5, 2004, The Market Center Blog, So-called moderate Republicans advance the left-wing agenda.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#053

April 4, 2004, The Washington Times, By Richard W. Rahn, All so taxing
http://www.washingtontimes.com/commentary/20040403-100447-8023r.htm

April 1, 2004, Ludwig von Mises Institute, by William H. Peterson, The Power to Destroy
http://www.mises.org/fullstory.asp?control=1477

April 2004, Newsweek, By Allan Sloan, Why Your Tax Cut Doesn't Add Up: Behind the promises to save you money, a hidden agenda is at work, with a stealth tax to pay for it all
http://msnbc.msn.com/id/4660655/

 

6) Classical liberals ponder dangers of the EU and tax harmonization.

[From The Market Center Blog, Thursday, April 15, 2004 ~ 1:29 p.m., Veronique de Rugy Wrote]

Classical liberals ponder dangers of the EU and tax harmonization. The world's leading forum for classical liberal scholars featured intense discussion about the risks of European expansion. Writing for the Scotsman, a journalist who attended the Mont Pelerin Society regional meeting ponders the coming clash of high-tax nations in Old Europe and market-oriented nations from New Europe.

[Allister Heath writes:]

This was the main theme to emerge from a series of papers and presentations delivered at a gathering of the prestigious Mont Pelerin Society last week in Hamburg. The participants, which included Vaclav Klaus, the Czech president and an impressive collection of Nobel-prize winning economists, leading international academics and think-tankers, exposed the European Union's enlargement and its new constitution as what it really is: a bureaucratic nightmare which will prove immensely damaging for the prosperity of ordinary Europeans.

The biggest and most important battle looming will be over tax competition, as Daniel Mitchell of the Heritage Foundation and Richard Rahn of the Institute for Global Economic Growth argued at the conference. ...For high-tax EU nations, the challenge is clear. Either they succeed in crushing the small, low-tax member states and impose tax harmonisation, perhaps with the help of the European Court of Justice and the new charter of fundamental rights, or else they will have to slash their taxes too to retain capital and people.  [Link to full article below:]

April 11, 2004, Scotsman.com, by Allister Heath, Heading for reform or oblivion
http://business.scotsman.com/index.cfm?id=409012004

April 15, 2004, The Market Center Blog, Classical liberals ponder dangers of the EU and tax harmonization.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#156

Other tax competition and tax harmonization blogs and articles:

April 21, 2004, The Market Center Blog, More German whining about tax competition.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#211

April 20, 2004, The Market Center Blog, More evidence that tax competition is working.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#204

April 20, 2004, The Market Center Blog, Tax haven policy gives England a competitive edge
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#202

April 15, 2004, The Market Center Blog, The OECD urges higher taxes in America, possibly even a VAT.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#157

April 13, 2004, The Market Center Blog, Academic study links city job losses with tax increases.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#133

April 9, 2004, The Market Center Blog, Italian leaders move nation toward pro-growth policies.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#091

 

7) More wasteful government spending

[From The Market Center Blog, Monday, April 5, 2004 ~ 5:02 p.m., Dan Mitchell Wrote]

Government is too big and it spends too much, but sometimes it is the "little" examples that really demonstrate the waste in Washington, DC. Citizens Against Government Waste just released its annual Pig Book, and Cal Thomas culls through the latest issue and writes about some of the scandalous ways politicians are squandering our tax dollars:

[Cal Thomas writes:]

Spending runs the gamut from ridiculous to outrageous. Why must taxpayers shell out $100,000 to renovate an historic Coca-Cola building in Macon, Ga., when the soft drink company made millions last year and could fund the project itself? When we have a $521 billion deficit and a $7.1 trillion national debt, why is Congress playing Santa Claus by spending $200,000 for "recreational improvements" in North Pole, Alaska? [Link to full article below:]

March 31, 2004, Townhall.com, by Cal Thomas, Our misspent tax dollars
http://www.townhall.com/columnists/calthomas/ct20040331.shtml

April 5, 2004, The Market Center Blog, More wasteful government spending.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#054

Additional blogs and articles on big government:

April 19, 2004, The Market Center Blog, Greedy politicians attack Colorado's spending restraint law.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#192

April 16, 2004, The Market Center Blog, A victory for the Terminator.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#164

April 15, 2004, The Market Center Blog, Tax and spend Republicans in Virginia.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#15-12

April 15, 2004, The Market Center Blog, The looming Medicare crisis.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#158

April 15, 2004, The Market Center Blog, How would the budget look if taxpayers could choose how money is spent?
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#155

April 15, 2004, The Market Center Blog, More education spending by government does not produce better test scores.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#152

April 14, 2004, The Market Center Blog, Maybe the government should shoot us if we don't exercise.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#147

April 14, 2004, The Market Center Blog, Smaller government will lead to less bribery.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#146

April 14, 2004, The Market Center Blog, The government's misplaced priorities.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#141

April 11, 2004, The Market Center Blog, Destroying jobs with government intervention.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#111

April 7, 2004, The Market Center Blog, Republicans and Democrats are both big government parties.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#071

 

8) Federal Reserve study confirms that higher taxes and spending hurt growth

[From The Market Center Blog, Tuesday, April 6, 2004 ~ 9:15 a.m., Andrew Quinlan Wrote]

A detailed academic study from the Dallas Federal Reserve Bank uses sophisticated statistical techniques to confirm that big government is economically destructive. This is hardly a surprise to anyone who has examined French economic performance, but it is good to see further evidence on the importance of limited government. Key findings include:

[From the Dallas Federal Reserve Bank study:]

..an increase in spending and taxes leads to a decrease in employment growth that is significant for two years. As the lower figure shows, this increase in the size of the public sector leads to a persistently slower rate of job growth. ...Taken as a whole, the three policy cases support two broad conclusions. First, growth in government stunts general economic growth. Regardless of how it is financed, an increase in government spending leads to slower economic growth. Second, the deficit is an unreliable indicator of the stance of fiscal policy. Depending on the budgetary action being financed-a tax cut or spending increase-an increase in the deficit can be either expansionary or contractionary. Tax increases that reduce the deficit are contractionary where spending cuts that accomplish the same goal are expansionary. [Link to full study below:]

January 2003, Federal Reserve Bank of Dallas: Working Paper 0301, by Dong Fu, Lori L. Taylor and Mine K. Yücel, Fiscal Policy and Growth
http://www.dallasfed.org/research/papers/2003/wp0301.pdf

April 6, 2004, The Market Center Blog, Federal Reserve study confirms that higher taxes and spending hurt growth.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#061

 

9) Friend or Foe? What Americans should know about the European Union

[Abstract fom IEA's study:]

The EU is often seen as a benign political construct designed to promote economic freedom, particularly free trade. The analysis In this paper demonstrates this view to be incorrect. Instead, from the very beginning, the EU has used economic integration to promote political ends. At first this economic integration may have promoted trade in the manufacturing sector. But in the last 30 years economic integration has been forged by increasing and making more uniform economic regulation. If this succeeds in creating political union, as is envisaged by the EU itself, this will be a Union that is damaging to European and global economic freedom and hostile to the US.

January 26, 2004, Institute of Economic Affairs, By John Blundell and Gerald Frost, Friend or Foe? What Americans should know about the European Union
http://www.iea.org.uk/files/upld-article71pdf?.pdf

 

10) Free Markets are the Answer … Foreign aid hinders development

[From The Market Center Blog, Saturday, April 10, 2004 ~ 6:31 a.m., Dan Mitchell Wrote]

Charles Krauthammer has an excellent column explaining how foreign aid subsidizes economically destructive policies. The real solution to poverty is free markets. Unfortunately, bureaucracies such as the IMF and World Bank are reluctant to support liberalization since it would reduce their power. Krauthammer's column provides plenty of evidence on the failure of income transfers.

[Charles Krauthammer writes:]

The answer is not foreign aid, which is corrupting and often worse than useless. In many cases, it actually further impoverished an already poor country. Enriched urban elites bought luxury goods, while donated food and socialist controls drove down the local price of food, ruining the farmers on whom these subsistence economies had depended.  We now know that the secret to curing hunger and poverty is capitalism and free trade. We have seen that demonstrated irrefutably in East Asia, which has experienced the greatest alleviation of poverty in the history of man. In half a century, places like Hong Kong, Taiwan and South Korea have gone from subsistence to First World status. And now free markets and free trade are lifting tens of millions of people out of poverty in India and China. [Link to full article below:]

April 9, 2004, Townhall.com, by Charles Krauthammer, How times have changed
http://www.townhall.com/columnists/charleskrauthammer/ck20040409.shtml

April 10, 2004, The Market Center Blog, Foreign aid hinders development.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#101

Additional free market blogs and articles:

April 15, 2004, The Market Center Blog, Breaking news: The OECD adopts a free-market position. Miracles do happen.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#159

April 14, 2004, The Market Center Blog, Economic reform in Russia.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#145

April 14, 2004, The Market Center Blog, Class warfare works in Europe, not America.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#144

April 13, 2004, The Market Center Blog, Reunification, ja; redistribution, nein.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#132

April 12, 2004, The Market Center Blog, Are the Germans coming to their senses?
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#122

April 9, 2004, The Market Center Blog, Slovakia continues to lead the way toward economic reform.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#092

April 8, 2004, The Market Center Blog, No wonder the French are so ill-informed.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#081

 

11) Justice Department proves that its own persecution of Oracle is unfounded

[From The Market Center Blog, Friday, April 9, 2004 ~ 11:43 a.m., Andrew Quinlan Wrote]

Thanks to flawed economic, the lawyers at the Justice Department have been blocking Oracle's purchase of PeopleSoft. According to the lawyers, there are only three firms in the market and a merger would be anti-competitive. Yet the Justice Department just purchased high-function enterprise software from another company. Maybe the purchasing bureaucrats should talk to the antitrust bureaucrats so this foolish intervention by the Department can be withdrawn.

[The Wall Street Journal comments:]

Oracle has taken a lot of hits as it tries to complete its hostile takeover, but the biggest blow came in February when DOJ sued to stop the deal. The Antitrust Division says Oracle can't be allowed to swallow up PeopleSoft because that would leave big software buyers hostage to two major suppliers -- Oracle and SAP. How inspiring then to hear that Justice -- a big software buyer itself -- had broken free of this industry tyranny and picked an entirely different firm to supply its internal financial-management software. DOJ will pay as much as $24 million for software from American Management Systems, one of the many niche players that makes this market so dynamic. Oracle, PeopleSoft and SAP -- the "only three vendors of high-function enterprise software" (according to the DOJ suit) -- didn't make the cut. [Link to full article below:]

April 8, 2004, The Wall Street Journal, Review & Outlook: Software Revelation
http://online.wsj.com/article/0,,SB108138476708577494,00.html?mod=opin%20ion (subscription required)

April 9, 2004, The Market Center Blog, Justice Department proves that its own persecution of Oracle is unfounded.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#095

 

12) Kerry's Acorn: Kerry's tax plan is still bad, even if it has one good idea.

[From The Market Center Blog, Sunday, April 11, 2004 ~ 11:07 a.m., Dan Mitchell Wrote]

Kerry's tax plan is still bad, even if it has one good idea. If a lunatic said he was going to give you $5, but then cut off your leg, that would be a step in the wrong direction because the benefit (presumably) is outweighed by the cost. The same is true of John Kerry's tax plan. It does have a few decent ideas, including a tiny reduction in the corporate tax rate and a provision to reduce the tax rate on past profits. But these policies are more than offset by the panoply of higher tax rates proposed by the Massachusetts lawmaker.

[Steve Moore writes in the Wall Street Journal in support of one of Kerry's few good ideas:]

Sen. Kerry would reduce the tax on profits that our companies earn abroad, if they reinvest the capital in job-producing investments back here in the U.S. It's a sensible idea, since an estimated $500 billion of capital owned by U.S. multinational firms -- ranging from Sun Microsystems to Microsoft, to GE -- remains trapped overseas. But these firms are not "Benedict Arnolds," as Sen. Kerry has alleged. They are simply responding to unpatriotic features of the federal tax code that penalize reinvestment in the U.S., at the expense of our own workers. Under the current IRS law, American multinational firms must pay the business taxes in the foreign country in which they earned the money; and then they are whacked with a second, add-on tax of up to 35% if they reinvest the capital here. We are virtually the only nation in the world that penalizes repatriated capital in this way. [Link to full article below:]

April 8, 2004, The Wall Street Journal, By Stephen Moore, John Kerry's Acorn
http://online.wsj.com/article/0,,SB108138596868577528,00.html?mod=opin%20ion (subscription required)

April 11, 2004, The Market Center Blog, Kerry's tax plan is still bad, even if it has one good idea.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#112

Additional Kerry fiscal policy article:

April 2, 2004, National Review, By Cesar Conda and Eric V. Schlecht, The Fiscally Promiscuous Candidate: John Kerry has proposed $2.76 trillion in new spending. Ouch.
http://www.nationalreview.com/nrof_comment/conda_schlecht200404020826.asp

 

13) Pro-market policies help Slovakia overcome legacy of communism and corruption

[From The Market Center Blog, Tuesday, April 13, 2004 ~ 11:56 a.m., Dan Mitchell Wrote]

The International Herald Tribune reports today on the incredible rise of Slovakia. Interestingly, the left-leaning paper acknowledges the role of market-oriented reforms, including the 19 percent flat tax.

[From the International Herald Tribune:]

Slovakia, which came into independence in 1993 as the poor cousin of its former mate, the Czech Republic, became ever more isolated. Shunned by foreign investors, Slovakia's economy lagged its neighbors. In 1997, near the end of Meciar's bleak tenure, it received only $84 million in foreign direct investment, compared to $1.2 billion in the Czech Republic, $1.7 billion in Hungary, and $3 billion in Poland. .When Dzurinda took over in 1998, his center-right government overhauled the pension and health care systems, shook loose the calcified labor market, and introduced a flat tax of 19 percent for corporations and individuals. .Slovakia's tax has captured most of the attention, especially among analysts in Western Europe, who say this ex-Communist country is now more enlightened in its tax policy than Germany or France. ."Slovakia has become the fair-haired child of Central Europe," said Ben Slay, the director of the Bratislava regional center of the United Nations Development Program. [Link to full article below:]

April 13, 2004, International Herald Tribune, by Mark Landler, A 'Detroit' for Europe takes shape in Slovakia
http://www.iht.com/articles/514413.html

April 13, 2004, The Market Center Blog, Pro-market policies help Slovakia overcome legacy of communism and corruption.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#134

Additional article on Slovakia's revival:

February 1, 2004, The Heartland Institute, By: John Skorburg, Slovakia Adopts Personal Retirement Accounts: Social security reform movement gains steam across the globe
http://www.heartland.org/Article.cfm?artID=14327

 

14) Jack Kemp says politicians should fix bad policies instead of persecuting "outsourcing."

[From The Market Center Blog, Wednesday, April 7, 2004 ~ 2:03 p.m., Dan Mitchell Wrote]

Writing for Townhall.com, former Vice Presidential candidate Jack Kemp argues for free-market reforms to help make America more attractive for job creation. This is in contrast to the "punish the victim" approach of John Kerry and other statist lawmakers.

[Jack Kemp writes:]

The hot-button issue for the Democratic Party this year is "outsourcing," the latest political euphemism that seeks to stigmatize companies voting with their feet and escaping high taxes and onerous regulations that drive up the cost of labor, increase the cost of capital and drive down rates of return on investment. By way of illustration, Sen. John Kerry seeks to demonize firms that move operations offshore to more business-friendly environs by labeling their CEOs "Benedict Arnold CEOs" with the obvious implication that they are traitors. The enemy of American jobs is not Japan, India or China, but rather stupid policy made in Washington, D.C. Therefore, a more apt metaphor is "refugee CEOs" who are fleeing punitive government policies that hurt both capital and labor. [Link to full article below:]

April 5, 2004, Townhall.com, by Jack Kemp, Refugee CEOs
http://www.townhall.com/columnists/jackkemp/jk20040405.shtml

April 7, 2004, The Market Center Blog, Jack Kemp says politicians should fix bad policies instead of persecuting "outsourcing."
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#073

 

15) Think tank blasts UN censorship, argues against bureaucratic control of the Internet

[From The Market Center Blog, Friday, April 16, 2004 ~ 11:28 a.m., Andrew Quinlan Wrote]

Encouraged by repressive third world governments, the United Nations wants regulatory control over the Internet. This is a dangerous proposal, both because of the left-wing regulatory mindset of UN bureaucrats, but also because the UN has a track record of supporting censorship.

[An expert from the Competitive Enterprise Institute provides some historical background:]

In 1995, delegates attending a UNESCO-convened meeting on "Women and the Media" held in Toronto, Canada called for various forms of government control on the media. These included taking legislative action to combat the "predominantly male culture of the mainstream media" by passing laws mandating "gender-sensitive" hiring practices for media outlets. (This heavy-handed regulatory approach echoed again that year during a UN conference on women's issues in Beijing). This attitude does not suggest a very high appreciation on the UN's part regarding the value of ensuring that media outlets are free from clumsy government interference. The UN's readiness to sympathize with supporters of censorship made an appearance last year. Its 2002 Human Development Report praised South Africa's Human Rights Commission (a government-funded body) for persecuting journalists in 2000 who dared to write investigative reports of high-level corruption. The Commission slapped the journalists with trumped-up charges of "subliminal racism." The UN, bizarrely, said that this persecution helped to build "respect for human rights." [Link to full article below:]

December 15, 2003, Competitive Enterprise Institute, by Neil Hrab, Should the UN Control the Internet?
http://www.cei.org/gencon/019,03775.cfm

April 16, 2004, The Market Center Blog, Think tank blasts UN censorship, argues against bureaucratic control of the Internet.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#167

Additiomal articles and blogs on the United Nations:

April 7, 2004, National Review, By Claudia Rosett, U.N.Reliable: U.N. investigations focus on process, not substance.
http://www.nationalreview.com/comment/rosett200404070853.asp

April 5, 2004, The Market Center Blog, Columnist warns against UN plan to seize control of Internet.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#052

 

16) Left-wing residents of Massachusetts choose lower taxes by landslide margin.

[From The Market Center Blog, Tuesday, April 20, 2004 ~ 12:18 a.m., Dan Mitchell Wrote]

An astounding 99.7 percent of Massachusetts taxpayers opted to pay a lower rate of tax when given the option according to a recent analysis of state tax returns. Interestingly, Sen. John Kerry was not among the 624 residents (out of 2.1+ million) who chose to pay the higher rate.

[The New York Post has the story:]

Weary of liberals always clamoring for higher taxes on other people, an anti-tax group managed to place a line on the tax form giving Bay Staters the option of paying at the old, since-repealed 5.85 percent rate, rather than at the current 5.3 percent rate. ...Of 2,104,326 Massachusetts state returns filed by April 15, exactly 624 taxpayers had opted to pay at the higher rate, a very small number indeed, considering that in a statewide referendum, 1,055,181 good liberals voted against cutting the income tax rate. [Link to full article below:]

April 19, 2004, The New York Post, By Howie Carr, A Flying Squirrel
http://www.nypost.com/postopinion/opedcolumnists/22886.htm

April 20, 2004, The Market Center Blog, Left-wing residents of Massachusetts choose lower taxes by landslide margin.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#201

 

17) CF&P Blogs and Clips

April 21, 2004, The Market Center Blog, Decentralization could be the key for Iraq's future.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#212

April 18, 2004, The New York Times, By Alan Cowell, Stealing May Be Easy, but Hiding Gets Harder
http://www.nytimes.com/2004/04/18/weekinreview/18cowe.html?adxnnl=1&adxnnlx=1082499 789-7W+2Ax00n33qMxQRSU12Vw

April 16, 2004, The Business Times (Singapore), By Matthew Lynn, Why the super-rich cluster in London
http://business-times.asia1.com.sg/aboutus/0,4703,,00.html?

April 16, 2004, The Market Center Blog, Tom Sowell comments on French hypocrisy and phony discrimination arguments.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#163

April 15, 2004, The Market Center Blog, Clinton Administration put tax harmonization above fighting terrorists.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#154

April 15, 2004, The Market Center Blog, Leftists undermine higher education.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#151

April 15, 2004, BBCCaribbean.com, Money laundering rules 'will increase costs': Authorities in Anguilla have said proposed international rules to combat money laundering will increase the costs of business transactions.
http://www.bbc.co.uk/caribbean/news/story/2004/04/040415_anguilla-money.shtml

April 15, 2004, The Salt Lake Tribune, By Pamela Manson, Utah witnesses blister Patriot Act
http://www.sltrib.com/2004/Apr/04152004/utah/157238.asp

April 14, 2004, The Economist, Cash and carry: Good news on American jobs and surprising news on American inflation may have troubling repercussions for emerging markets
http://www.economist.com/agenda/displayStory.cfm?story_id=2577513

April 14, 2004, RTÉ Business, OECD says US may need more taxes
http://www.rte.ie/business/2004/0414/oecd.html

April 14, 2004, The Market Center Blog, Congress acts to protect US legal sovereignty.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#142

April 13, 2004, The Market Center Blog, Davey Crockett: Before the Alamo, he fought for freedom.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#136

April 12, 2004, Barbados Advocate, By Shawn Cumberbatch, Barbados under watch [by OECD]
http://www.barbadosadvocate.com/NewViewNewsleft.cfm?Record=17202

April 11, 2004, The Detroit News, By Nolan Finley, Why protect privacy? Because Lary Howard's story could be yours
http://www.detnews.com/2004/editorial/0404/11/a13-118713.htm

April 10, 2004, Telegraph (London), By Jeremy Skidmore and Richard Luscombe, US security 'will drive visitors away'
http://www.telegraph.co.uk/travel/main.jhtml?xml=/travel/2004/04/10/etnewslead100404.xml& sSheet=/travel/2004/04/10/ixtrvhome.html

April 10, 2004, The Market Center Blog, France's continuing collapse.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#103

April 9, 2004, The Market Center Blog, US governments ignore World Court interference.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#094

April 8, 2004, The Moscow Times, By Alex Fak, World Bank Assails 'Robber Barons'
http://www.themoscowtimes.com/stories/2004/04/08/001.html

April 8, 2004, The Market Center Blog, Conservatives seek changes in Patriot Act.
http://www.freedomandprosperity.org/blog/2004-04/2004-04.shtml#082

 

Best regards,

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

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