I’m not sure I could pick out a significant victory for human freedom in 2012.
Maybe I’m missing something, but the only good policy that’s even worth mentioning was the decision in Wisconsin to rein in the special privileges and excessive compensation for government workers.
But there definitely have been lots of sad developments.
The hard part is picking the most disappointing story.
1. Was it the craven decision by John Roberts to put politics before the Constitution and cast the deciding vote for Obamacare? This certainly could be the most disappointing event of the year, but technically it didn’t represent a step in the wrong direction since the Supreme Court basically gave a green light to unlimited federal power back in the 1930s and 1940s. The Obamacare case is best characterized as a failure to do the right thing. A very tragic decision, to be sure, but it maintained the status quo.
2. Was it the lawless decision by the Internal Revenue Service to impose a horrible regulation that forces American banks to put foreign law above U.S. law? This was a very bad development in the battle for tax competition, financial privacy, and fiscal sovereignty. But in the grand scheme of things, it’s just another in a long line of policies (such as FATCA) designed to increase the power of governments to impose and enforce bad tax policy.
3. Was it the Japanese government’s decision to double the value-added tax? I’m definitely not a fan of adding a VAT on top of the income tax, but Japan made that mistake years ago. The choice to increase the tax rate just shows why it’s dangerous to give politicians any new source of revenue. So this isn’t the worst policy development of 2012, particularly since the new Japanese government may suspend the tax hike.
4. Was it the delusional decision by 54 percent of California voters to impose a big, class-warfare tax hike? I thought the vote for Prop 30 was a very troubling development since it signaled that voters could be tricked into enacting class-warfare tax policy, even though they should have realized that more revenue for the state’s politicians would simply exacerbate the eventual fiscal collapse. But since I think this will be a learning experience on what not to do, I can’t put this at the top of my list.
5. Was it the French government’s punitive decision to impose a 75-percent top tax rate? This is a spectacularly misguided policy, and it’s already resulting in an exodus of entrepreneurs and other successful people. But just as I enjoy have California as a negative role model, I like using France as an example of bad policy. So it would be a bit hypocritical for me to list this as the worst policy of 2012.
6. Or was it the envy-motivated decisions by politicians in both Slovakia and the Czech Republic to replace flat tax systems with so-called progressive tax regimes? This is a strong candidate for the worst policy of the year. It’s very rare to see governments do the right thing, so it’s really tragic when politicians implement good reforms and later decide to reinstate class-warfare policies.
All things considered, I think this last option is the worst policy development of 2012. To be sure, I’m a bit biased since my work focuses on public finance issues and I’ve spent 20 years advocating for tax reform.
But I think there’s a strong case to be made, by anyone who believes in freedom, that politicians from Slovakia and the Czech Republic deserve the booby prize for worst public policy development of 2012.
Alvin Rabushka, sometimes referred to as the Father of the Flat Tax , summarizes the grim news.
On December 4, 2013, the center-left parliament of Slovakia modified the country’s historic 19% flat-rate tax… Effective January 1, 2013, the income tax rate for corporations was raised from 19% to 23%, while that on individuals earning more than €39,600 (€1=$1.30) a year was raised to 25%, thereby creating two brackets of 19% and 25%. …On November 7, 2012, the lower house (Chamber of Deputies) of the national parliament approved a proposal to impose a second higher rate of 22% on annual income exceeding Czech Koruna (CZK) 100,000 ($5,200) per month. President Vaclav Klaus signed the bill on December 22, 2012, which will take effect on January 1, 2013.
What’s especially depressing about these two defeats is that the supposedly right-wing parties deserve the blame.
In Slovakia, all but one of the right-leaning parties in the old government decided to support the Greek bailout, leading to the collapse of the government and the election of a new socialist government that then sabotaged tax reform.
And in the Czech Republic, the current right-of-center government decided to scrap the flat tax for “fairness” reasons. I’m sure that will really be comforting to the Czech people as the economy suffers from less growth.
To understand what the people of those nations are losing, here’s my video on the flat tax.
Now for a bit of good news. There are still more than 25 flat tax jurisdictions in the world, including two of my favorite places – Hong Kong and Estonia.
So there are still some pockets of rationality. It’s just very unfortunate that the scope of human liberty is getting smaller every year.
P.S. The absolute worst thing that happened in 2012, if we look beyond public policy, was Georgia falling 4 yards short of beating Alabama in the Southeastern Conference Championship.
P.P.S. Speaking of sports, the best thing about 2012 occurred in Virginia Beach back in October.
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The Supreme Court decision was the saddest by far.
In addition to the good news from WI, you can add the right to work law in Michigan. Things at the state level, expect for a few leftist aberations, have actually been pretty good. It is only at the national and world level that things are going bad. And even at the world leveol, while Europe is going bad, many 3rd world nations, expecially in Africa, are finally embracing the market, and geting some growth.
To DaveP, it wasn’t a “medical” marijuana legalization, it was a recreational marijuana legalization. I don’t know what you mean by “you got a shiny”, but what’s wrong with acknowledging that there were some victories for human freedom? I deplore the losses of freedom Dan discussed.
To Deoxy, I totally agree that marijuana legalization in two states is “more of a potential early indicator of later success”. This is how the beginning of the end of alcohol prohibition looked. Also, I agree that we ought to get government out of defining marriage at all, and let it be a simple contractual matter. But, I don’t believe the government has any business trying to impose values on people. The culture, not government, is redefining marriage, something that has occurred many times in history as with interracial marriage. The idea that this will have any impact on birthrates seems illogical. Gays are gay whether or not they’re allowed to marry.
To all, I wasn’t trying to celebrate in the midst of what was clearly an awful year (decade?) for liberty. I only pointed out that there were (in my opinion) a few victories among the series of defeats.
Dan:
It is tragic how the conservatives have allowed themselves to be maneuvered into a corner over “fiscal responsibility”. Just as Bob Dole was famously called “The Tax-Collector for the Welfare State”, conservatives in other nations are following along as meek little sheep instead of advancing the principles of Freedom and Liberty through limited government. They have all been corrupted by the re-election syndrome.
Considering that the Feds will still whatever they like on marijuana (and deputize local law enforcement to do it for them), the first one is more of a potential early indicator of later success than anything.
And the second is insane. Do what you like in your bedroom (even if I cared, I bloody well wouldn’t want the government caring), but either get government out of marriage entirely, or leave it alone. I will not celebrate the ability of the government to redefine well-known and well-defined terms in ways that discourage the birth rate even further. The future belongs to those who show up… and it’s looking very, very islamic right now. Yay, freedom? Yeah, right.
So we’ve won the right to a new way to legally anesthetize ourselves as our civil servants continue to bankrupt the treasury, line their own nests, and try again to disarm the citizenry.
I’m not so sure I’d call that a victory. Or unwelcomed by those who want to keep power.
Etian: Cheering gay rights and “medical” marijuana in 2012 is like cheering a well-polished set of shoes on the Titanic: everyone’s about to drown, the tragedy will be remembered for decades, but YOU’RE happy because YOU got a shiny.
“I’m not sure I could pick out a significant victory for human freedom in 2012.”
Really? What about legalization of marijuana in Washington and Colorado? What about the victories for gay marriage? Economic freedom took a huge hit, both in this country and around the world as you point out, but some major victories were made for social freedoms.
The best news for 2012?
The emergence of the term Government Failure to describe what happens when governments get involved and the person paying for a service is not the person receiving that service.
You can see Government Failure virtually everywhere, since the bureaucrats beloved by statists have little incentive to perform well yet are amazingly difficult to fire!
Interesting that what you list for number 2.
That is the domestic lite version of FATCA, or DATCA if you like. It is the fallout of the FATCA IGAs (inter-government Agreements) designed to help cram down a faux reciprocity deal on other countries to make the 2010 FATCA (The Worst Law that Americans still do not know about) work.
Jim Jatras (who lives in the center of the universe, like you) has been speaking to this issue quite a lot recently. Here is a video link to a talk at a Canadian FATCA FACT finding forum. http://bit.ly/RoNGqU
And here is a recent interview. http://bit.ly/W8taYy
FATCA remains, in my mind, the most Tragic Policy Development of the past 4 years, decade, or maybe my lifetime, not counting our wars. It is far worse than any domestic policy issue, as the impacts are global and yet mostly unknown by the masses, and mostly ignored by our media. The impacts are profound.
FATCA begets DATCA begets GATCA (or a global FATCA regime of automatic Data exchanges). 2008 started the move towards a GATCAwellian future.
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I’m still stinging from the Dawgs losing that game. Maybe we can take care of business in Orlando today.