The International Monetary Fund does not always give bad advice, but the bureaucrats (who get very generous tax-free salaries) are infamous for advising economically-troubled nations to raise tax rates. The latest example if from Latvia, which got itself in trouble by overspending during the boom years and taking on too much debt. The IMF, to its credit, has asked for long-overdue reductions in a bloated public sector, but Latvia’s economy also needs investment to get back on the right path – and that will be less likely if the nation’s politicians acquiesce to IMF demands to replace the flat tax with a system that discriminates against those that contribute more to growth. Bloomberg reports on how the IMF is using American tax dollars to push bad tax policy:
Archive for July, 2009
Posted in Economics, Fiscal Policy, Flat Tax, International Monetary Fund, Taxation, tagged Economics, Fiscal Policy, Flat Tax, Free Markets, International Monetary Fund, Statism, Taxation on July 31, 2009 | 18 Comments »
Posted in Competitiveness, Economics, Fiscal Policy, Lakers, Patriots, Taxation, Yankees, tagged Competitiveness, Economics, Fiscal Policy, Lakers, Patriots, States, Taxation, Yankees on July 30, 2009 | 1 Comment »
A sportswriter at NBA.com explains how higher tax rates will make it even more attractive for professional athletes to sign with teams from zero-income tax states such as Florida and Texas. This is good news if you cheer for the Miami Dolphins or Texas Rangners. But if you support teams from high-tax states, you should be very upset that greedy politicians are making it more likely that your favorite franchise will be at a competitive disadvantage:
The IRS sends their auditor to audit a synagogue.
The auditor is doing all the checks, and then turns to the Rabbi and says, “I noticed that you buy a lot of candles.”
“Yes,” answered the Rabbi.
“Well, Rabbi, what do you do with the candle drippings?” he asked.
“A good question,” noted the Rabbi. “We actually save them up. When we have enough, we send them back to the candle maker and every now and then, they send us a free box of candles.”
“Oh,” replied the auditor somewhat disappointed that his question actually had a practical answer. So he thought he’d try another question, in his obnoxious way. “Rabbi, what about all these matzo purchases? What do you do with the crumbs from the matzo?
“Ah, yes,” replied the Rabbi calmly, “we actually collect up the crumbs, we send them in a box back to the manufacturer and every now and then, they send a box of matzo balls.”
“Oh,” replied the auditor, thinking hard how to fluster the Rabbi.
“Well, Rabbi,” he went on, “what do you do with all the foreskins from the circumcisions?”
“Yes, here too, we do not waste,” answered the Rabbi. “What we do is save up all the foreskins, and when we have enough we actually send them to the IRS.”
“To the IRS ?” questioned the auditor in disbelief.
“Ah, yes,” replied the Rabbi, “directly to The IRS …And about once a year, they send us a little prick like you.”
Posted in Alarmism, Economics, Fiscal Policy, food nazi, Government stupidity, Health Care, nanny state, Taxation, Uncategorized, tagged Economics, Fiscal Policy, food nazi, Free Markets, Government stupidity, Liberty, nanny state, Statism, Taxation on July 29, 2009 | 2 Comments »
A report at CBSnews.com highlights the growing interest among politicians and bureaucrats in new taxes on sugary drinks, including sports drinks such as Gatorade. This is a reprehensible example of nanny-state intervention, of course, but it shows the risk of having government involved in health care since politicians then assert the right to tell us how to live:
…one of the proposals put before the committee received a nod of approval from health officials today: taxing soda. The [Senate Finance] committee — the last congressional panel expected to produce its own recommendations for health care reform – listened to arguments earlier this year both for and against imposing a three-cent tax on sodas as well as other sugary drinks, including energy and sports drinks like Gatorade. The Congressional Budget Office estimates that a three-cent tax would generate $24 billion over the next four years, and proponents of the tax argued before the committee that it would lower consumption of sugary drinks and improve Americans’ overall health. …CDC chief Dr. Thomas Freiden said increasing the price of unhealthy foods “would be effective” at combating the nation’s obesity problem… The American Beverage Association, which strongly opposes the tax, told the Wall Street Journal the tax would hit poor Americans the hardest.
The Los Angeles Times, meanwhile, has a similar report about politicians wanting a tax on foods that supposedly lead to obesity. The reason for their interest, not surprisingly, is that a 10 percent tax on such foods may lead to more than $500 billion, which doubtlessly is leading to lots of salivating on Capitol Hill:
Key among the “interventions” the report weighs is that of imposing an excise or sales tax on fattening foods. That, says the report, could be expected to lower consumption of those foods. But it would also generate revenues that could be used to extend health insurance coverage to the uninsured and under-insured, and perhaps to fund campaigns intended to make healthy foods more widely available to, say, low-income Americans and to encourage exercise and healthy eating habits. …a 2004 report prepared for the Department of Agriculture suggested that, for “sinful-food” taxes to change the way people eat, they may need to equal at least 10% to 30% of the cost of the food. And although 40 U.S. states now impose modest extra sales taxes on soft drinks and a few snack items, the Urban Institute report suggests that a truly forceful “intervention” — one that would drive down the consumption of fattening foods and, presumably, prevent or reverse obesity – would have to target pretty much all the fattening and nutritionally empty stuff we eat: “With a more narrowly targeted tax, consumers could simply substitute one fattening food or beverage for another,” the reports says. …Conservatively estimated, a 10% tax levied on foods that would be defined as “less healthy” by a national standard adopted recently in Great Britain could yield $240 billion in its first five years and $522 billion over 10 years of implementation — if it were to begin in October 2010. If lawmakers instituted a program of tax subsidies to encourage the purchase of fresh and processed fruits and vegetables, the added revenue would still be $356 billion over 10 years.
Posted in Competitiveness, Economics, Fiscal Policy, Health Care, Taxation, Uncategorized, tagged Competitiveness, Economics, Free Markets, Government stupidity, Taxation on July 28, 2009 | Leave a Comment »
The politicians in Washington are looking at a huge laundry list of new taxes to finance government-run health care and one of the items on the list is a 10 percent tax on cosmetic surgery. While I’m tempted to make a joke about this being the “Pelosi tax,” there is a much more serious point to be made. Cosmetic surgery is a very good example of how free markets work in the health sector – when they are given a chance. As Mark Perry and Don Boudreuxhave noted, there are some instances where markets are allowed to work, and they do an excellent job of providing valuable goods at affordable prices. Cosmetic surgery is one of those examples. So should we be surprised, as this National Journal story indicates, that politicians wants to tax the approach that works – a genuine free market exchange between buyers and sellers – to expand the approach – government intervention that expands the third-party payer problem – that doesn’t work?
Face-lifts, tummy tucks and hair transplants could be hit with a new tax to help finance the trillion-dollar healthcare overhaul plan, according to sources familiar with the Senate talks. The Senate Finance Committee has discussed imposing a 10 percent excise tax on cosmetic surgery deemed unnecessary for medical purposes. The idea was broached in a meeting with OMB Director Orszag in mid-July, after which Senate Finance Chairman Max Baucus told reporters he had heard some “interesting,” “creative,” and “kind of fun” ideas. The tax, which has not been officially scored, would plug some of the revenue gap senators are seeking to fill to keep on schedule for a markup the week of Aug. 3. It would target procedures prohibited under Section 213 of the tax code, which deals with itemized deductions for medical expenses not covered by health insurance. The 1990 deficit-reduction law prohibited taxpayers from taking deductions for cosmetic surgery “unless the surgery or procedure is necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.” The law defines cosmetic surgery as “any procedure which is directed at improving the patient’s appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease.” According to the IRS, deductions for procedures such as reconstructive surgery due to cancer or laser eye surgery would be allowed. But nose jobs, liposuction, teeth-whitening procedures and Botox injections to smooth wrinkles would be prohibited under Sec. 213 and subject to the new tax.
A new study reveals the unseemly degree to which the government has spent tens of billions of dollars to co-opt scientists into parroting global-warming alarmism. This has resulted in “models” that supposedly show the need to take drastic action to prevent slight warming in the next 50-100 years, yet those same models cannot predict today’s weather based on past data. The politicians are getting the “results” they want, but the end result may be a new power grab by government to control and direct our lives. Transworldnews.com has a report:
Posted in Cato Institute, Competitiveness, Economics, Fiscal Policy, Sovereignty, Tax Haven, Taxation, Video, tagged Cato Institute, Competitiveness, Economics, Fiscal Policy, Free Markets, Liberty, Sovereignty, Tax Haven, Taxation, Video on July 25, 2009 | 10 Comments »
I’ve heard that “Cato U” is the most popular Cato Institute public program, so I’m looking forward to my first visit. I’ll be speaking on “Leviathan on a Diet: Tax Competition and Restraints on State Power.”
For those of you who won’t be there, this eight-minute video is a condensed version of my remarks. And if you’re too lazy to watch the video, my message is that forcing governments to compete with each other is the world’s most powerful force for freedom.
Posted in Corruption, Economics, Fiscal Policy, Government stupidity, Spending, tagged Corruption, Economics, Fiscal Policy, Government Spending, Government stupidity, stimulus, Waste on July 24, 2009 | Leave a Comment »
President Obama’s pork-filled spending bill certainly has not done much to help the economy (not a surprise since bigger government means a smaller private sector), but it has done a great job of lining the pockets of politicial insiders. The Denver Post has a story about Colorado’s governor using a no-bid contract to funnel a pile of money to his former law partners:
Gov. Bill Ritter turned down a $75-an-hour offer from the Colorado attorney general’s office to handle legal matters regarding the disbursement of federal stimulus funds, instead hiring his former law partners for up to six times that cost. …Ritter hired Hogan & Hartson through a no-bid contract. So far, the firm has been paid $40,000 from federal funds. Although Colorado has laws governing the circumstances under which the state can contract, the governor and other elected officials are exempt. In 1941, the state legislature buried a sentence in an unrelated section of the law that essentially permits elected officials to disregard procurement rules — including a requirement to seek multiple bids — when entering into contracts. …The March contract between the firm and the governor’s office is vague. A letter attached to the contract says Hogan & Hartson will represent the governor’s office in analyzing the recovery act and help ensure that the state “receive and distribute its full share” of the funds. Other documents that may shed more light on the work the firm is doing for taxpayers were withheld by the governor’s office on the grounds of “attorney-client privilege.”
Back in the 1980s, the irreplaceable Walter Williams produced a documentary based on one of his more controversial books, The State Against Blacks. Someone has done a great service and posted the documentary on Youtube.com. Everything Walter said back then is true today – and just as applicable. The only discordant note is that when Walter refers to “welfare reform,” it is important to understand that he is talking about the expansion of handouts and centralization in the 1960s and 1970s, not the pro-market welfare reform of the 1990s.
Ann Coulter is a lawyer by training and a provacateur by profession, but her Townhall column on health care shows she has a very good grasp of economics. She does an excellent job of identifying how politicians have created the “third-party payer” problem that has so seriously undermined market forces:
Too bad Republicans can’t be this articulate. But I guess that would require them to stop making the problem worse, as they did with their profligate Medicare expansion earlier this decade.