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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 Heritage Foundation, respectively. |
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The Market Center Blog |
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Observations and insights on the global fight |
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CF&P's Market Center Blog Archives |
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Thursday, September 30, 2004 ~ 10:19 p.m., Dan Mitchell Wrote: While handguns are banned for citizens in Washington, D.C., congressmen are allowed to have a gun for self-protection on the Capitol grounds. Well-known liberal politicians
such as Senators Chuck Schumer and Ted Kennedy have armed bodyguards. The wives of politicians, such as Senate Minority Leader Tom Daschle's wife, Linda, also have bodyguards. Undoubtedly, these politicians and
their families have extremely good reasons for this protection, but many other Americans, especially those living with the high crime rates in D.C., also feel the same way. ...While these politicians have
protection both in their homes and as they travel around in public, since September 24, 1976, other D.C. residents have lived under the nation's most restrictive gun laws. Police enforce a citywide handgun ban,
and local statutes require residents to keep long guns disassembled, unloaded, and locked up. Yet, with a murder rate of 46 per 100,000 people in 2002, the District easily holds the title of the U.S. murder
capital among cities with over 500,000 people. This was not even close to being the case prior to the ban. Crime rose significantly after the gun ban went into effect. In the five years before Washington's ban
in 1976, the murder rate fell from 37 to 27 per 100,000. In the five years after it went into effect, the murder rate rose back up to 35. During this same time, robberies fell from 1,514 to 1,003 per 100,000 and
then rose by over 63 percent, up to 1,635. ...The irony over the gun-ban debate is that Democratic national standard bearers at least publicly give lip service to the claim that Americans have an individual
right to own guns for self-protection. Senator John Kerry has said, "I believe that the Constitution, our laws and our customs protect law-abiding American citizens' right to own firearms." Senator
John Edwards claims "I believe that the 2nd Amendment protects Americans' right to own firearms for purposes like hunting and personal protection...." Senator Tom Daschle, the Democratic minority
leader, has also just affirmed his support for the Second Amendment in ads airing in his tight race in South Dakota.
Thursday, September 30, 2004 ~ 7:41 p.m., Andrew Quinlan Wrote: Greece's handouts from the EU are not yet in danger despite Athens' budgetary crisis, a spokesman from the European Commission said on
Wednesday (29 September). Brussels has allocated 563 million euro in so-called "cohesion funds" destined for Athens in 2004, of which 189 million euro had been transfered by 1 August. The Commission
spokesman for regional policy had told Reuters news agency, "We might consider the possibility of suspending cohesion funds for Greece as
foreseen by the regulations". However, the spokesman for economic affairs, Gerassimos Thomas said, "The Commission will have to evaluate
[the 2005] budget and come back with an assessment in November", adding that fines are often not needed "once a country has taken action to correct its deficit".
Thursday, September 30, 2004 ~ 8:34 a.m., Dan Mitchell Wrote: Developing countries all too often create policy risks, and add costs and barriers to competition that hamper businesses--from farmers to
micro-entrepreneurs to local manufacturing companies, the World Bank said in a new report Sept. 28. In World Development Report 2005: A Better Investment Climate for Everyone, the bank makes the case that
economic growth is needed for poverty reduction but macroeconomic stability by itself is insufficient if other conditions are absent. "A vibrant
private sector creates jobs, provides the goods and services needed to improve living standards, and contributes taxes necessary for public
investment in health, education, and other services," said Francois Bourguignon, World Bank chief economist. "But too often governments
stunt the size of those contributions by creating unjustified risks, costs, and barriers to competition." ...
Thursday, September 30, 2004 ~ 7:58 a.m., Dan Mitchell Wrote: We've long been skeptics about the science behind the political campaign to regulate greenhouse gasses, so imagine our surprise to discover that
some of the global warmists seem to agree. How else to read a paragraph that was included in a recent Senate spending bill exempting climate programs from having to pass scientific scrutiny? The legislative
language excuses any "research and data collection, or information analysis conducted by or for the National Oceanic and Atmospheric Administration" (the agency charged with monitoring climate change)
from the Data Quality Act, a new law that requires sound science in policymaking. This is the sole exemption in the bill. ...our sources say it was included at the request of Democrats on the Senate subcommittee
that wrote the spending bill in question, but that now the exemption is getting the attention of Chairman Judd Gregg, who says he intends to remove it. Let's hope so. Surely those who claim to believe most in
climate change aren't afraid to subject their theories to even basic tests of scientific accuracy. Or are they?
Thursday, September 30, 2004 ~ 6:21 a.m., Dan Mitchell Wrote: ...there is a good way to see whether charter schools raise achievement. Since most charter schools cannot admit as many as want to attend, they
choose students based on random lotteries. We can compare the performance of students who are and are not randomly assigned to charter schools. This is the method used by Department of
Education-sponsored studies and a study by Jonah Rockoff and me. We found that a large system of Chicago charter schools raised math and reading scores by about six percentiles among students who entered in
third grade or below. (Relatively few students enter after third grade, so we don't have statistically significant findings for them.) Any scientific
study of charter schools must compare apples to apples, and the lottery method is best. The AFT, in contrast, has been pushing results based on
an "apples to oranges" comparison, pitting charter students against all regular public school students, who are very different. In fact, when the
AFT narrowed in on black and Hispanic students, they found no differences between charter and public schools. This has not kept them from trumpeting the result of the crude comparison. Another serious
problem with their study: It is based on only a 3% sample of charter students in the fourth and eighth grades. ...For the entire U.S., I found
that charter students were 3.8% more likely to be proficient on their state's reading exam and 1.2% more likely to be proficient on their state's
math exam than students in the nearest regular public school. These differences rise to 5% in reading and 2.8% in math if we compare charter
schools to the nearest public school with a similar racial composition. In fact, the more similar the schools are, the more positive the differences.
Consider states where charter schools are relatively well-established. Arizona's and California's charter students are 7% to 8% more proficient
in reading than students in the nearest similar public school. Colorado's are 11% more proficient in reading and math. D.C.'s post large differences in achievement: About 36% more proficient in reading and math.
Wednesday, September 29, 2004 ~ 2:00 p.m., Dan Mitchell Wrote: The Financial Crimes Enforcement Network expects to make a recommendation by the end of the year on whether to raise the current
$10,000 threshold that triggers the filing of currency transaction reports, FinCEN Director William J. Fox told the Senate Banking Committee Sept. 28. ...He said FinCEN and the Bank Secrecy Act Advisory Group
currently are working on a recommendation. The Bank Secrecy Act Advisory Group is a team of regulators and experts from the private sector that meet regularly to discuss implementation of the Bank Secrecy
Act and other federal anti-money laundering issues. Bankers complain that CTR filings are a major regulatory burden, and that federal regulators sometimes never examine the many CTRs that banks file each year.
Wednesday, September 29, 2004 ~ 1:18 p.m., Dan Mitchell Wrote: The key problem with Social Security is that it has never taken in enough to cover all the pensions it promised to pay. Promises win votes but
collecting enough money to pay for them does not. Should we be surprised that politicians take the easy way out by promising a lot and leaving it to future politicians to figure out how to pay for what was
promised... you don't see insurance companies wringing their hands about how they can't pay out the pensions they promised when they sold annuities. That is because each generation's premiums were invested to
create additional future wealth to pay for that generation's pensions, regardless of whether the next generation is large or small. The big
difference between private annuities and Social Security is that private investment creates future wealth for the country as a whole and Social Security does not.
Wednesday, September 29, 2004 ~ 11:52 a.m., Andrew Quinlan Wrote: John A. Rapanos, a 68-year-old Michigan landowner faces a 10-month federal imprisonment and up to $10 million in fines. Rapanos cleared and
graded 175 acres of fallow farmland that he had owned since 1950 with the intention of constructing a shopping center. When the shopping center deal fell through, he leased the land to a local grain farmer. What
was his crime? Under the Clean Water Act, no person may discharge, dredge or put fill material into the navigable waters of the United States
without a permit. The closest navigable waters to Rapanos' land are in Saginaw Bay, some 20 miles away. Rapanos' crime in the eyes of the U.S.
Army Corps of Engineers was that he filled in depressions on his land without permission. According to his defense at the California-based
Pacific Legal Foundation, "the Corps has argued that isolated pools and puddles were magically transformed into 'navigable waters,' and subject
to regulations, merely by the stopover of 'migratory' birds." With the Corps' reasoning, you could go to jail if you had a tree stump ground out
and filled the hole. ...President John Adams (1797-1801) said, "The moment the idea is admitted into society, that property is not as sacred
as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence."
Wednesday, September 29, 2004 ~ 10:39 a.m., Dan Mitchell Wrote: Twenty years ago, AM broadcast pop music and news bulletins. Today it carries hours of conservative talk. What changed? Not the AM band--it
functions exactly the same as it did in 1984 or, for that matter, in 1934. What changed were the rules. Up until 1987, any radio station that
allowed time for partisan comment had to allot an equal amount of time to the other side--with the Federal Communications Commission
deciding what counted as "the other side." Daunted by that regulatory burden, AM radio stayed away from politics altogether. It's not a
coincidence that Rush Limbaugh emerged as a national voice only after the so-called Fairness Doctrine was abolished--and that liberal Rush
critics have repeatedly tried to reinstate the old rule ever since. Or think about the Swift Vets ads. Maybe you saw them on the Internet. But they
were there for you to see only because senators John McCain and Russ Feingold failed in their attempt to amend U.S. election law to prevent citizens--like the veterans--from making their voices heard during
election campaigns.
Wednesday, September 29, 2004 ~ 10:03 a.m., Dan Mitchell Wrote: Switzerland yesterday rejected proposals to ease citizenship rules for foreigners... In a referendum, a majority of the population - and most of
Switzerland's cantons - rejected government proposals to ease citizenship requirements for second- and third-generation foreigners. ...Critics said
the decision would damage Switzerland's reputation as an open and tolerant society and hinder integration....Switzerland has an unusually high proportion of foreign residents compared with neighbouring
European Union countries. Most of the foreigners, who comprise 20 per cent of the more than 7m population, are originally from southern EU countries or, more recently, from the former Yugoslavia. While the
relatively high proportion reflects Switzerland's openness and need for foreign labour, it also demonstrates the barriers to gaining nationality in one of Europe's richest states.
Wednesday, September 29, 2004 ~ 8:28 a.m., Dan Mitchell Wrote: Why has America's economy grown 55% faster than Germany's over the past 25 years? The Germans think they know. Americans suffer cruel
inequality. They work three "McJobs" just to survive. They take on more and more debt to maintain their standard of living. Washington hides the
true state of unemployment by locking up millions in jail. And forget about getting decent health care. Right-thinking Germans even have a derogatory term, Amerikanische Verhaltnisse -- literally, American
conditions -- as a shorthand for the social catastrophe they believe would result if they were ever to tackle the real cause of their slow growth: a
notoriously rigid labor market. This view is so monolithic that the conservative leader Edmund Stoiber is on record saying, "We do not want Amerikanische Verhaltnisse in Germany." So imagine the Sturm
und Drang when a German author, Olaf Gersemann, came along earlier this year and exploded all these myths. The title of his book hardly needs translation: "Amerikanische Verhaltnisse: Die falsche Angst der
Deutschen vor dem Cowboy-Kapitalismus." On each score where Europeans think their system is superior, the Washington correspondent for Germany's largest business weekly shows that the Americans have
actually pulled ahead.
Tuesday, September 28, 2004 ~ 4:39 p.m., Dan Mitchell Wrote: Games and circuses once were provided by government. How better to satiate the desire of the Roman masses than to entertain them in the
Arena? Today, governments build stadiums to attract sports franchises for the same purpose. But the American masses seem to be tiring of transferring billions of dollars to billionaire team owners. ...Stadium
advocates have been amazingly successful in taking from the poor and giving to the rich. Some wealthy sports moguls, such as Managing General Partner Al Davis of the NFL Oakland Raiders, have turned
mulcting taxpayers into an art form. Raymond Keating, chief economist for the Small Business Survival Committee, estimates that government
has poured more than $20 billion (in current dollars) into sports ventures in recent decades. Yet such facilities once were and continue to be built
privately. The only reason more franchise owners decline to construct their own stadiums is because taxpayers so often relieve them of the need to do so. ...sports spending is primarily substitutional. Stanford
University economist Roger Noll figured that only 5 percent to 10 percent of those attending games live elsewhere. Local fans divert their outlays from other leisure activities and other areas within the region.
Thus, government stadium "investments" have consistently generated meager results. Robert Baade and Allen Sanderson looked at a dozen metropolitan areas for The Heartland Institute and found no net
employment hike. Separately Baade reviewed 36 cities and found no net statistical increase in economic growth.
Tuesday, September 28, 2004 ~ 4:03 p.m., Andrew Quinlan Wrote: Would you sign a contract that enabled the other party to change the terms of that contract at will, while you could neither stop him nor make
any changes of your own? Probably not. Yet that is exactly what happens when you pay money into Social Security. ...A private annuity plan run by
an insurance company is legally required to pay you what was promised, when it was promised, and to maintain assets sufficient to redeem its promises. ...Although the stock market bounces up and down from day to
day, people are not investing today in order to retire next week. They begin paying Social Security premiums when they first get a job and they
retire decades later. Stocks are far less risky in the long run than they are in the short run because the ups and downs balance out over a long
period of time. It is virtually impossible to find any 40-year period in which the stock market has not paid a higher rate of return on your
money than you get from Social Security. ...The same political expediency which caused Social Security to be called "insurance," in order to get
public support, guaranteed that it would be nothing of the sort. Unlike an insurance company, Social Security has never had enough money to pay
for all the pensions it promised. Instead, Social Security has been run like a pyramid scheme, where the first people to pay in get money back from
the second wave of people who pay in, and the second wave get money back from the third wave, etc. This is so risky that pyramid schemes are illegal -- except when the government does it.
Tuesday, September 28, 2004 ~ 2:43 p.m., Dan Mitchell Wrote: The findings of a study undertaken by Ernst & Young and the Centre for European Economic Research has suggested that the tax gap between
Germany and the new member states of the European Union will continue to grow unless Berlin cuts rates in the years ahead... With Lithuania, Latvia, Hungary, Slovakia and Poland having cut company
taxes in recent months in a bid to attract foreign investment, and with the Czech Republic and Estonia planning further cuts, competition is
hotting up for foreign investment and the study predicts the gap in the effective tax rate between the old and new EU states will increase. "Investments in new member states can considerably reduce the tax
burden of German companies," the study observed. The research concluded: "The distance between Germany and the new EU member states will keep growing."
Tuesday, September 28, 2004 ~ 12:19 p.m., Dan Mitchell Wrote: The Conservative Party is currently examining ways in which thousands of households can be relieved from the Inheritance Tax burden should
the party win the next general election. Inheritance Tax is currently paid at 40% on the value of homes over £263,000. Although the Chancellor,
Gordon Brown, raised the threshold in his most recent budget, it has been rapidly outpaced by strong house price inflation in recent years, pushing many families on modest incomes into the IHT net, especially in
the south east. ..."Inheritance tax has become plain unfair. Once only the very rich paid it, but under Gordon Brown it is hitting ordinary families
all over Britain," commented Shadow Chancellor Oliver Letwin. He added: "Two and a half million houses with six million people living in
them are potentially liable to inheritance tax and the number is rising rapidly. Even former council houses are being drawn into the net. This
problem needs to be remedied." However, the Party has thus far refused to make any commitments to cutting or reforming IHT under a possible Conservative government, and Shadow Treasury Minister George
Osborne remarked that it would be "irresponsible to give it now".
Tuesday, September 28, 2004 ~ 11:05 a.m., Andrew Quinlan Wrote: Globalization in fact reduces poverty and the use of child labor, fosters women's rights, promotes respect for democratic norms, enriches culture,
and even sustains the environment. Multinational corporations are not wreaking havoc by leveling wages and labor standards across the globe. In fact, they raise them. The "gotcha" examples produced by
anti-globalizers of the occasional social harm done by globalization are exceptions and not the rule. To show that globalization eases poverty, Bhagwati offers a tale of two continents. In 1970 average African
incomes were 30 percent higher than average Asian incomes. Thirty years later, African incomes had remained stagnant and were then half of Asian incomes. While there were undoubtedly many causes of this
reversal, Bhagwati documents that a primary one was that Asia opened itself and adapted to external markets while Africa did not. As a result, in
1970 Africa was home to about 10 percent of the world's poor and Asia to more than 75 percent, using standard measures of the absolute level of
poverty. Thirty years later Africa had more than a third of the world's poor and Asia's share had declined to just 15 percent. Looking more closely at developments within Asia bolsters the point. Who can doubt,
Bhagwati asks, that the dramatic reductions in poverty in China and India came about only when these countries began integrating with the world economy, mimicking the tactics of Japan, Korea, and Singapore?
Trade and foreign direct investment boost growth, and growth reduces poverty.
Tuesday, September 28, 2004 ~ 9:28 a.m., Dan Mitchell Wrote: Preventing law-abiding people from owning guns in their homes (there is no talk of allowing residents the right to carry concealed handguns) has
done nothing to reduce crime, which has skyrocketed in part due to police mismanagement and corruption. In the five years after the ban took effect in 1976, the murder rate rose to 35 per 100,000 people from
27. In fact, in the three decades since the ban took effect, the annual murder rate has only once fallen below what it was in 1976. In 2002 the
murder rate hit 46 per 100,000 people. Robbery rates have also risen dramatically. Washington residents tell me that the police response times
to reports of crime are atrocious, and inner-city residents and the elderly are more vulnerable because the bad guys know they will likely be
unarmed. Little wonder that last year six local citizens filed a civil suit in federal court seeking to overturn the gun ban. ...The debate over the
district's draconian gun ban should provide valuable lessons for other cities that have foolishly tried to fight crime by disarming their citizens.
Chicago's gun ban, passed in 1982, has done nothing to curb that city's murder rate even though its police force is well-trained and well-equipped and has a good relationship with neighborhood leaders.
Chicago's murder rate was 5.5 times as high as that of five surrounding counties in 1982, when gun control passed. During the next five years the
murder rate soared to 12 times as great as in the neighboring counties. Gun control is bad for public safety, in large part because criminals
ignore gun bans that honest people feel compelled to follow. Bob Levy, a scholar at the Cato Institute in Washington, says lifting the Washington
gun ban is a moral issue. "Right now, if someone breaks into a poor person's home here, their only choice is to call 911 and pray the police
arrive in time," he says. "That's not good enough, and let's hope members of Congress grant the right to bear arms to people who can't
afford to live in the safe neighborhoods they go home to at night."
Monday, September 27, 2004 ~ 10:29 a.m., Dan Mitchell Wrote: Proposals being studied by Republicans for a national sales tax to replace the current US income tax system will impose a heavy burden on
America's middle class families according to a lengthy critique prepared by House Democrat leader Nancy Pelosi. According to Pelosi's 25-page
report, Republican plans for a national sales tax would add $6,000 to the cost of a new car valued at $20,000, whilst the prices of a number of
goods and services including prescription drugs, new homes, brokerage fees, insurance premiums and gasoline would escalate. ...Whilst President
Bush has mentioned that a national consumption tax is an option worth considering as part of plans to reform the US tax code, the White House has denied that it is a second term objective. However, senior
Republicans, including House Majority Leader Tom DeLay, are said to support the idea.
Monday, September 27, 2004 ~ 9:45 a.m., Dan Mitchell Wrote: For the few CBS News staffers who have been at the network for more than 30 years, the events of the past few weeks must make them feel
they're trapped inside Nietzsche's "eternal return." This is the third occasion over the past 32 years in which CBS News has been caught
behaving unethically and irresponsibly in the reporting and editing of a hot-button issue involving the United States, the Vietnam war, and the behavior and conduct of senior officials in Washington. The executive producer of CBS's "60 Minutes" midweek broadcast, who partially blamed the Bush White House for bogus documents used by Dan
Rather, is a former staffer for New York Democrats who was still making political contributions while on the network's payroll. Josh Howard served on the staff of Rep. Stephen Solarz and worked for Sen. Charles
Schumer when Schumer was a state assemblyman, a background confirmed by CBS. Federal election reporting records show that Howard, identifying himself as a CBS employee, contributed $1,000 in each of
Solarz's last two campaigns for Congress...
Monday, September 27, 2004 ~ 8:02 a.m., Andrew Quinlan Wrote: Various forms of fraud and abuse have resulted in substantial financial losses to states and the federal government. Fraudulent and abusive
billing practices committed by providers include billing for services, drugs, equipment, or supplies not provided or not needed. Providers have also been found to bill for more expensive procedures than actually
provided. In recent cases, 15 clinical laboratories in one state billed Medicaid $20 million for services that had not been ordered, an optical
store falsely claimed $3 million for eyeglass replacements, and a medical supply company agreed to repay states nearly $50 million because of fraudulent marketing practices.
Sunday, September 26, 2004 ~ 12:07 p.m., Dan Mitchell Wrote: Nineteenth-century historian Alexis de Tocqueville once observed, "Democracy and socialism have nothing in common but one word:
equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude." Tocqueville
was commenting on liberty and free enterprise, American style, versus socialism as envisioned by emerging protagonists of centralized state
governments. And he saw on the horizon a looming threat -- a threat that would challenge the freedoms writ in the blood and toil of our nation's
Founders. ...FDR never embraced self-reliance as the essential ingredient of a free society, nor have his Demo-successors Ted Kennedy and John
Kerry. Why? Perhaps it's because these men inherited their wealth, their privilege and their political office. Indeed, while Kerry's handlers might
try to cast their candidate as a man of the people, he is anything but. Remember, this is a man who has twice married multimillionaire heiresses; a man who has multiple mansions on multiple continents; a
man who windsurfs (poorly) off tony Nantucket; a man who rides a bicycle that costs more than some new cars; a man who spends, oh, maybe $15,000 to jet his hairdresser cross country for a trim. Yes, John
Kerry is the latest in a line of "inheritance-welfare liberals" -- those who were raised dependent on inheritance rather than self-reliance. Is it any
wonder, then, that the character and values of these inheritance-welfare liberals are all but indistinguishable from the character and values of
those who depend on state welfare? ...despite the collapse of socialism around the world, inheritance-welfare liberals, chief among them John Kerry, still dominate the Democrat Party and continue to advocate all
manner of dependence upon the state (the poor man's trust fund). V.I. Lenin knew precisely what he was talking about when he famously dubbed Western Leftists "useful idiots." Being free (or merely "feeling free") means, to many people, not only acting without restrictions or opposition, but also efficaciously, with
power, able "to do whatever one wants." And with this definition in mind, most thoughtful people see a principle of chaos. If I may swing my
fists wherever I want, and you swing your fists wherever you want, there'll be a lot of broken noses and no peace - and, after a while of this, maybe no people, either. But as philosopher Isaiah Berlin famously
noticed, this conception of freedom as "freedom to" is not the only conception. And it is not really what civilized people mean when they talk
about freedom for all, or equal liberty. What we are talking about is "freedom from." From what? Coercion. Compulsion. ...This is all basic
stuff, and most of us understand it, though often not explicitly. Your rights should include acting, within peacefully drawn boundaries, without me or someone else disrupting your scope of action with initiated
violence or threats of same. "Freedom to" cannot be equal, without chaos. But "freedom from" can. You can have it, and so can I. We all can
have it, so long as each of us limits our actions to the peaceful variety. ...Government does so many tyrannous things in part because many people want to pretend that freedoms to constitute the highest good. A
right to medical care, for instance, enslaves doctors according to the rules of the socialist state, and taken to the extreme enslaves everybody to help everybody out. And, because the demands are unlimited, but
supplies scarce, capricious regulation becomes the norm, and Soviet-style queues and shortages a way of life. In a society where "freedom to" is
the only freedom, no real freedom can remain. All are slaves to each other. We end up with a rule of fists, and broken noses everywhere. Unprincipled chaos. (Perhaps it's no accident that a raised fist is
socialism's chief symbol.)
Sunday, September 26, 2004 ~ 10:30 a.m., Andrew Quinlan Wrote: Yet while the folks on "Oprah" screamed with excitement over their new rides, out in the real world, tax professionals were trying to calculate the
wreckage come April 15. ...Brenda Schafer, a manager for tax analysis and advice support at H&R Block, has heard stunned prizewinners wailing before. The company's clients include former participants on
reality shows. Whether they got a "free" new face on "Miami Slice" or a new wardrobe on "Queer Eye for the Straight Guy" or had their $50,000
ranch house turned into a $300,000 mansion--they'll have to pony up to the IRS. As for Oprah, Ms. Schafer says, "she's thinking she's giving gifts,
but there's no getting around the fact that it's a prize for being in the audience." And according to her rough, unofficial calculation, someone
in the 15% federal bracket (making, say, $28,000 as an individual, or $56,000 if filing jointly) and a 5% state bracket who gets a $30,000 car (the figure for the G6 is about $28,500) will owe an extra $6,000 in
taxes. For a single earner in the 33% bracket kicking in at $143,500, the car adds $12,000 in tax.
Sunday, September 26, 2004 ~ 9:43 a.m., Dan Mitchell Wrote: ...a Detroit Free Press survey that revealed that Michigan publicschool teachers were twice as likely as the public at large to send their children
to private school. Fascinated by this information, a colleague at Northwestern University shared a copy of the Chicago Reporter, which followed civil rights activities in its home town. The Chicago numbers
were startling: 46 percent of that city's public school teachers (compared to 22 percent of Chicagoans in general) sent their children to private
schools. Even more interesting was the human-interest part of the story. The Reporter found a bustling private Montessori school on the South Side that enrolled so many children of public school teachers that
parent/teacher conferences were held on public school holidays! ...urban public school teachers send their children to private schools at a rate of 21.5 percent, nearly double the national rate of private-school
attendance. Saturday, September 25, 2004 ~ 3:00 p.m., Dan Mitchell Wrote: The EU is falling short of its employment targets and has much ground to make up if it is to succeed in making itself "the most competitive
economy in the World by 2010", announced the European Commission today (23 September). The EU employment rate in 2003 stagnated at 63 percent, considerably below the Union's target, set by the Lisbon
Strategy, of 70 percent by 2010. Moreover, there are "only limited employment growth prospects for 2004 and 2005", according to the Brussels executive. Employment growth rose by a meagre 0.2 percent in
2003, compared to 0.9 percent in the US.
Saturday, September 25, 2004 ~ 12:25 p.m., Andrew Quinlan Wrote: The Dutch government on Tuesday proposed cutting the country's corporate tax rate by 4.5% by 2007 in a bid to compete with Eastern
Europe and improve Holland's international competitiveness generally. Under the proposals presented in the government's 2005 budget, company income tax will be cut to 31.5% next year from 34.5%, with a
further cut to 30% slated to take place by 2007. ...the move has likely been made in the knowledge that the average corporate tax rate in the
new member states, located mainly in the former Eastern bloc, is 21.5% "In the battle for investment, corporation tax is becoming more important," the government's budget statement acknowledged. Sarkozy said France should continue reducing its corporate tax rate in the coming years, moving toward convergence with the average 30
percent rate seen across the EU. ...The 2005 budget bill includes several, previously announced measures aimed at furthering French competitiveness in the face of its new, low-tax EU competition, as well as
other low-tax destinations and jurisdictions worldwide. Friday, September 24, 2004 ~ 10:47 p.m., Dan Mitchell Wrote: Mr. Bush, like most Republicans these days, only pays lip service to smaller government and balanced budgets. He is, after all, a president
who inherited a $155 billion surplus and turned it into a $442 billion deficit. His apologists will claim that Sept. 11 caused an explosion in federal spending, but the truth is that this administration allowed
spending to explode at all levels of government. The libertarian Cato Institute reported earlier this year that discretionary domestic spending exploded at rates only surpassed by another president from Texas,
Lyndon Johnson. It is ironic that we Republicans took control of Congress in 1994 by attacking Bill Clinton for his free-spending ways. But spending grew annually under Mr. Clinton at a 3.4% rate, while
exploding under President Bush at a 10.4% clip. Republicans taking credit for restraining Mr. Clinton need to explain why they didn't hold their own president to the same standards. ...So why can't Mr. Kerry use
this Republican flip-flop as a campaign issue? Maybe it is because his voting record has already been labeled as the most liberal in Congress.
But more damning than how he voted in the past is what he has promised to do in the future. Friday, September 24, 2004 ~ 9:13 a.m., Dan Mitchell Wrote: ...the Financial Action Task Force is an organization of international bureaucrats funded by 33 countries, with the goal of fighting financial
crime. That sounds all well and good. FATF has no direct power, but it can put countries on its sanctions list, which discourages major banks from correspondent banking relations with the offending countries,
which can mean financial death to small countries. If all the FATF requirements were justified on a reasonable cost-benefit basis and did not interfere with basic civil liberties, there would be no basis for
complaint. But many of their requirements, such as the "know your customer rules" (also promulgated by the IMF and U.S. government
agencies), do not meet cost-benefit and civil liberties' tests and actually drive many low-income people around the globe out of the banking
system. This leads to both a less safe and less economically prosperous world.
Friday, September 24, 2004 ~ 8:32 a.m., Dan Mitchell Wrote: If Congress were ever so foolish as to eliminate any income ceiling on the Social Security tax, the United States would face the highest marginal
tax rates in the civilized world. ...If the cap were eliminated on Social Security taxes, as it was with Medicare taxes, doing so would add another 10 percentage points for everyone now in the 28-35 percent
income tax brackets. The top two tax rates on labor income would then be about 56 percent and 60 percent. Even the most brutally overtaxed, stagnant economies of Europe do not impose marginal tax rates that
high. The United States would have a higher marginal tax rate than Germany (47 percent) and even Sweden (56 percent). Nearly all major countries still cap the amount of annual income subject to Social Security
tax (such as 54,000 euros in Germany). And Social Security taxes are generally deductible in Europe and Japan, to avoid double taxation of labor.
Friday, September 24, 2004 ~ 8:00 a.m., Dan Mitchell Wrote: When the International Monetary Fund meets next week in Washington, it is hoping to persuade the U.S. to approve its no-strings-attached,
multi-billion-dollar foreign aid expansion. If that sounds odd at a time when U.S. resources are already stretched, wait until you see the list of
beneficiaries. The new IMF financing would make Iran eligible for a total of $465 million, Syria would be entitled to $90 million, Robert Mugabe's
Zimbabwe $115 million and Sudan $100 million. Oil-rich, authoritarian Venezuela would have $840 million and the gentle junta running Burma $80 million. As the creditor nation in the Fund, the U.S. would be asked
to cough up the lion's share of the dough.
Friday, September 24, 2004 ~ 7:45 a.m., Dan Mitchell Wrote: French Budget Minister Dominique Bussereau confirmed yesterday that there are no plans in the government's 2005 budget to abolish or reform
the unpopular wealth tax, thought responsible for billions of euros in capital flight from the country. "If the government had a preference on
this, we would have proposed a measure," Bussereau told French television, according to Reuters. "If the senators or deputies propose one,
we will study it," he added. Whilst Finance Minister Nicolas Sarkozy has acknowledged that the wealth tax, known as the ISF (Impôt Sur la
Fortune), is an obstacle to capital repatriation, he is awaiting the results of a parliamentary debate on the issue before proposing any changes to
the regime. ...According to a parliamentary report, the tax is thought to be responsible for the flight of around EUR11 billion from France in the last five years. Friday, September 24, 2004 ~ 6:22 a.m., Dan Mitchell Wrote: The Social Security system's long-run cash flow deficit is $11.9 trillion, and the new prescription drug benefit will require $16.6 trillion. Add in
Medicare Part A (hospital insurance, completely paid by taxpayers) and Part B (doctors' insurance, three-fourths funded by taxpayers) and the
total Medicare shortfall comes to $61.9 trillion. Over and above payroll taxes and premium payments made by the elderly, the unfunded liability
in these two programs combined totals more than $73 trillion -- about seven times the size of our economy. ...This generation of workers faces a
clear choice. Will they tighten their belts a bit and save more? Or will they ask their children and grandchildren to choose between reneging on promises to retirees, going without government services, or paying
exorbitant tax rates? Thursday, September 23, 2004 ~ 9:02 p.m., Dan Mitchell Wrote: Japanese Finance Minister Sadakazu Tanigaki told the governmental Tax Commission yesterday that fiscal reform is crucial for sustaining
economic growth, suggesting that future tax hikes may be inevitable. ...The Finance Minister's comments reflect a growing acceptance within Japan that tax hikes are seemingly inevitable. Last week, Japan's most
influential business group Nippon Keidanren added weight to the argument by arguing for an increase in consumption tax to 15% to avert a future national debt crisis. Thursday, September 23, 2004 ~ 11:00 a.m., Dan Mitchell Wrote: Chirac has been a long-standing advocate of a worldwide tax, and earlier this year appointed a panel of experts including economists,
business leaders, government officials and activist groups to examine the issue. The 150 page report produced by the panel has suggested a
number of different revenue-raising ideas including taxes on emissions of greenhouse gasses, certain financial transactions, arms sales, airline
tickets, credit card purchases or shipping. The document also contained proposals for a levy on multinational firms and the creation of an
international lottery. It is thought that a global tax system could build a pot of around $50 billion... While the proposals may be realistic in a
technical sense, from a political standpoint they are unlikely to be practical, especially in the face of vehement opposition from the United States government. Summing up the American view on the matter, US
Agriculture Secretary Ann Veneman argued that global taxes are "inherently undemocratic". "Implementation is impossible," she added. Thursday, September 23, 2004 ~ 10:38 a.m., Dan Mitchell Wrote: Another, perhaps more useful way to explain earnings differentials is that one's earnings depend on his ability to serve his fellow man plus the value
his fellow man places upon that service. Then, there's a supply side of the story. Shaquille earns many times more than the brightest neurosurgeon.
Why? It isn't because basketball is more important to society than neurosurgery; it's because the supply of people with aptitudes to become bright neurosurgeons far exceeds those with skills to do what Shaquille
does. However, if it were the other way around, thousands upon thousands with Shaquille skills and few with neurosurgeon skills, the earnings picture would be reversed. People spend too much time
worrying about income inequality. ...Making people more productive is the challenge. Whining about income inequality is a cop-out. Thursday, September 23, 2004 ~ 9:15 a.m., Andrew Quinlan Wrote: Billions of pounds, enough to pay for the entire primary health and education needs of the world's developing countries, are being siphoned
off through offshore companies and tax havens, according to a body formed to expose the offenders. ...While in the 70s there were just 25 tax havens, there are at least 63 now, about half of them British
protectorates or former colonies. Tax avoidance in Britain alone is estimated at between £25bn and £85bn. This month the Tax Justice Network, which was formed last year by tax experts and economists
worried about the trend, launched an international secretariat in London. It will work with the UN and other international bodies to reverse the
practice of hiding money from governments worldwide. ...The notion of tax havens goes back to just after the Napoleonic wars when demobbed officers moved to Jersey, but it was not until the 1960s that the high
rates of British taxation acted as a motivation for people to move their money abroad. Thursday, September 23, 2004 ~ 8:37 a.m., Dan Mitchell Wrote: European Union auditors uncovered fraudulent or misspent farm aid worth 3.1 billion euros ($3.79 billion) between 1971 and 2002, the EU's
financial watchdog said on Tuesday. Export refunds plus subsidies to fruit and vegetable farmers accounted for over half the missing aid, the European Court of Auditors said. ...Only 25 percent of the misspent
funds have been recovered or written off and 21 percent of the cases pre-date 1994 according to the report published by the Court of
Auditors. "My personal feeling is that if (you're getting) less than half of the irregular payments back, you ought to be pretty unhappy," British
member of the Court, David Bostock, told a news conference. ...Italy and Germany have the worst record for getting back misspent farm aid from farmers and traders, running recovery rates of 10 percent over the
1971-2002 period.
Thursday, September 23, 2004 ~ 7:00 a.m., Dan Mitchell Wrote: Hungary's largest bank, OTP, has slammed the government's decision to introduce a higher corporate tax bracket for financial institutions,
warning the move could force it to concentrate on business outside of the country. Branding the move as a "populist" measure by the government,
the bank cautioned that it may be forced to lay off staff and pass on the increased costs brought about by the tax to its customers. ...Finance Minister Tibor Draskovics announced last week that a plan will be
presented to parliament to introduce a second corporate tax band of 24% for the banking sector, leaving the majority of the nation's firms to pay income tax at the standard rate of 16%.
Thursday, September 23, 2004 ~ 6:15 a.m., Dan Mitchell Wrote: The second reason for non-support of the extension of the ban is that there is no such thing as an assault weapon. This is why the courts have
regularly held "assault weapons" bans as unconstitutionally vague unless specific guns or features are named. Anti-gun advocates have confessed that they deliberately used the term "assault weapon" to
confuse people into thinking that semi-automatic civilian firearms are the same as assault rifles (i.e., machine gun-type weapons that are used by
the military and have long been illegal to manufacture and sell to civilians). In fact, armies don't use AWs because, being only civilian-type
arms, they are far less lethal than actual assault rifles. ... In considering gun controls, we must remember what criminological research shows: Dangerous though guns are in the wrong hands, there is much more
beneficial use of guns than wrongful use. Law-abiding, responsible adults use guns more than 2.5 million times each year to repel and defeat crime.
And states that have enacted laws giving good people a permit to carry guns for protection have experienced, not an increase in criminal violence, but a decrease. Criminals have no more desire to face an armed
victim than victims have to face an armed criminal. To be sensible, gun laws must focus on disarming criminals and the insane, not ordinary law-abiding, responsible adults.
Wednesday, September 22, 2004 ~ 8:05 a.m., Dan Mitchell Wrote: French President Jacques Chirac has called for an international tax to help fight poverty. Speaking at the United Nations in New York, Mr
Chirac praised a report prepared by a French working group, which suggested an international tax be levied on arms sales and some financial
transactions in a bid to eradicate poverty. ...But Mr Chirac's ideas were strongly attacked by the US delegation. US Agriculture Secretary Ann Veneman said, "global taxes are inherently undemocratic.
Implementation is impossible". Mr Chirac has also caused controversy in the EU by proposing a harmonised way of calculating corporate tax, which is strongly opposed by the UK.
Wednesday, September 22, 2004 ~ 7:51 a.m., Dan Mitchell Wrote: Sweden, which has the highest tax burden among OECD countries, will cut taxes by SKr8.1bn ($1.1bn, EUR891m, £606m) or slightly more than
1 per cent of the government's tax intake. Inheritance and gift taxes will be abolished.
Wednesday, September 22, 2004 ~ 7:17 a.m., Dan Mitchell Wrote: Australian Treasurer Peter Costello has indicated that he wants to overhaul the country's international taxation system to ease the tax
burden on firms operating overseas if the ruling Liberal/National coalition retains power after October's general election. ..."I would like
to improve Australia's international taxation arrangements so that Australian companies can expand in foreign jurisdictions, while remaining domiciled in Australia," Costello told the FT. "We want to
promote Australia as a place for regional headquarters - for Australian companies but also for foreign companies," he added. Costello spoke as
News Corp, the largest firm listed on the Australian Stock Exchange, prepares to move its domicile and primary listing to the United States.
Wednesday, September 22, 2004 ~ 6:45 a.m., Andrew Quinlan Wrote: ...many schools claim they are broke and, unwilling to streamline their bloated bureaucracy, they demand tax increases or bond initiatives to
jack up the money flow. When taxpayers resist these raids on their pocketbooks, public schools look for easier ways to raise money. Where
can free-spending liberals go? They run to lawyers and activist judges for money, even though policy and spending decisions and tax increases
should originate with the legislature. ...On Aug. 25, the Spokane, Wash., Public School Board voted unanimously to demand court-ordered funding increases by joining a planned lawsuit with many other
Washington State school districts. The districts hired the law firm of Bill Gates' father, Preston, Gates and Ellis, to loot millions of taxpayer
dollars. Liberal legislators are inciting these lawsuits nationwide as a way to appease teachers unions while avoiding accountability as elected
officials. ...In the state of New York, 17 school districts have expressed interest in joining the July 23 lawsuit of the Utica City School District
demanding a judge order increased funding. A Utica official said that, without additional funding, 190 jobs would be eliminated. ...An astounding half of all states now face lawsuits by public schools
demanding that judges increase their funding. While haters of President Bush blame his No Child Left Behind Act, most of these lawsuits have
having nothing to do with that federal legislation. ...Seven lawsuits were pending in Idaho asking judges to raise taxes that the voters would not
approve. In August, the Idaho supreme court finally stopped this racket by unanimously prohibiting judges from raising taxes for public schools.
...Hooray for one court that recognizes taxes are an issue to be decided by elected representatives who are accountable to voters, not by judicial
supremacists. Other states and Congress should follow suit by forbidding judges to raise taxes anytime anywhere.
Tuesday, September 21, 2004 ~ 10:45 p.m., Dan Mitchell Wrote: It has been predicted that income tax could jump by as much as 5p in the pound in order to avert a crisis in the UK's public pension system, a
report revealed last week. Watson Wyatt, the firm of actuaries, have claimed that the shortfall in the public sector pensions system amounts to
some £580 billion or the equivalent of 5p on the standard rate of income tax, the Independent newspaper reported. The estimate is apparently £200bn more than the Government has previously admitted, the report
noted.
Tuesday, September 21, 2004 ~ 7:21 p.m., Dan Mitchell Wrote: With the country on the brink of a deficit crisis, Philippines president Gloria Arroyo is reportedly planning to forge ahead with plans to
increase taxes, despite evidence that there is widespread opposition to the proposals. Warning that the country is on the brink of an Argentine
style economic crisis, Arroyo has warned that the country faces "death throes" in two years time unless it somehow raises more than 180 billion
pesos (US$3.2 billion) in additional tax revenues. ...According to a Presidential spokesman, most of the new tax will be extracted from those most able to pay.
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