Archive for July 9th, 2011

President Obama is stubbornly clinging to his ideological agenda of bigger government and class warfare. Wasteful programs magically become “investments” for growth, and higher tax rates get turned into “shared sacrifice.”

Interestingly, we already know what eventually happens with this approach. Europe’s welfare states are now dealing with the wreckage of Obamanomics-type policies and the results are not pretty.

We already know about the fiscal crises in nations such as Greece and Portugal, and it’s probably just a matter of time before Spain, Italy, and Belgium face similar problems (and because of demographics, even the market-oriented welfare states of Northern Europe may be on borrowed time).

To put it bluntly, European nations have spent themselves into a fiscal ditch and they’re now trying to figure out how to deal with the carnage.

But while there’s been lots of attention paid to the spending crisis in Europe, there’s also a very interesting – albeit under-reported – story on the revenue side of the budget ledger.

Europeans appear to be learning, slowly but surely, that it is a mistake to saddle an economy with punitive tax rates. Here’s a chart from a recently released European Commission report. It shows average top tax rates for European Union nations (the top line is for the subset of nations that use the euro currency and the bottom line shows the average of all EU nations).

As you can see, the average top tax rate in Europe has dropped by about 10 percentage points since 1995. Perhaps most remarkable, the average top tax on individuals is now down to about 37 percent – lower than the 39.6 percent rate that Obama wants for the United States. And that doesn’t even count the higher payroll tax rate endorsed by the President!

Even the Euro-zone nations have dropped their average top tax rates by about seven percentage points during the period. But what may be most noteworthy is that these nations have been reluctant to rely on class warfare taxes in response to the fiscal crisis. Yes, the overall top tax rate has crept up by one percentage point in recent years, largely thanks to increases in nations such as Greece and Portugal, but that’s an amazingly restrained response – particularly compared to how politicians would have tried to rape and pillage the “rich” if the fiscal crisis happened twenty or thirty years ago.

While it’s a bit risky to draw long-term conclusions from any set of data, it does seem as if the European political elite have finally realized that economic damage caused by class-warfare taxation is greater than any political benefits of pursuing those soak-the-rich policies.

Maybe they’ve learned because there is growing evidence for the Laffer Curve (why raise tax rates, after all, if you don’t get more money to waste?). Or maybe they’ve learned because of tax competition (why raise tax rates if that causes the geese with the golden eggs to fly across the border?).

All we can say for sure, however, is that those same lessons have not been learned in America.

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I’ve already confessed that I have very abnormal fantasies. And I have admitted on TV that my fantasies are rarely fulfilled.

But that doesn’t stop me from my dreams. And since I’m in a sharing mood today, here’s my latest fantasy.

You may have followed on the news that the state of Texas just executed a child rapist/murderer. This caused some consternation on the left, and not just from those who are against the death penalty (which is a very defensible position, as I have acknowledged).

Many people, including officials from the Obama Administration and the Mexican government, wanted the execution halted because on an international agreement giving governments certain rights to intervene on behalf of citizens who get in legal trouble in other nations. I’m not a lawyer, so I’m not competent to address those issues, but suffice to say that the U.S. Supreme Court was not impressed by the specific argument in this case and turned down a request to block the execution.

My fantasy, however, has nothing to do with the legal argument. I just figured it was important to provide some background information before I divulge my innermost dreams and desires.

What sparked my fantasy was this article, featuring some bureaucrat from the United Nations who is very agitated that Texas officials didn’t acquiesce to “international law.” Here are the important passages.

The United States broke international law when it executed a Mexican citizen, the United Nations’ top human rights official said Friday. The Texas execution of Humberto Leal “raises particular legal concerns,” including whether he had access to consular services and a fair trial, said U.N. High Commissioner for Human Rights Navi Pillay. …Texas Gov. Rick Perry also declined to block the execution. Texas, the nation’s most active death penalty state, has executed other condemned foreign nationals who raised similar challenges, most recently in 2008. “Texas is not bound by a foreign court’s ruling. The U.S. Supreme Court ruled in 2008 that the treaty was not binding on the states and that the president does not have the authority to order states to review cases of the then 51 foreign nationals on death row in the U.S,” said Katherine Cesinger, a spokeswoman for Perry. But what Texas did also “places the U.S. in breach of international law,” said Pillay, who visited Mexico this week. “What the state of Texas has done in this case is imputable in law to the U.S. and engages the United States’ international responsibility.” …Pillay also cited a 2004 International Court of Justice ruling saying the U.S. must review and reconsider the cases of 51 Mexican nationals — including Leal — who were sentenced to death. She said those reviews never happened. She said the execution undermined “the role of the International Court of Justice, and its ramifications are likely to spread far beyond Texas.”

Because of my disdain for international bureaucracies and my belief in sovereignty, you won’t be too surprised to learn that Ms. Pillay’s comments rubbed me the wrong way.

So I started thinking about the good people of Texas and how they would react if some pampered, overpaid U.N. bureaucrat started hectoring them about their supposed failure to kowtow to “international law.” And then the fantasy began…

I envisioned a press conference, featuring Texas Governor Rick Perry. He’s answering an important question from the Amarillo Globe-News about the state trap shooting competition, when he is interrupted by a sunken-chested dweeb from the New York Times, who shouts out, “Governor, how do you respond to Ms. Pillay, the U.N. official who says you broke international law by executing the poor, misunderstood child rapist/murderer?”

In this fantasy, the Governor’s expression darkens (sort of akin to the look Clint Eastwood would get in the Dirty Harry movies). He gives the reporter a withering stare, ponders whether to even answer, and then gives an answer that earns Dan Mitchell’s heartfelt admiration.

Boy, why don’t you tell Ms. Pillay to round up a bunch of those blue-helmeted pansies and try to come arrest me. If they can make it past the JV football team from Permian High School, she can have me.

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