The title of this post sounds like the beginning of a strange joke, but it’s actually because we’re covering three issues today.
Our first topic is corporate taxation. More specifically, we’re looking at a nation that seems to be learning that it’s foolish the have a punitive corporate tax system.
By way of background, the United States used to have the second-highest corporate tax rate in the developed world.
But then the Japanese came to their senses and reduced their tax rate on companies, leaving America with the dubious honor of having the world’s highest rate.
So did the United States respond with a tax cut in order to improve competitiveness? Nope, our rate is still high and the United States arguably now has the world’s worst tax system for businesses.
But the Japanese learned if a step in the right direction is good, then another step in the right direction must be even better.
The Wall Street Journal reports that Japan will be lowering its corporate tax rate again.
Japan’s ruling party on Tuesday cleared the way for a corporate tax cut to take effect next year… Reducing the corporate tax rate, currently about 35%, is a long-standing demand of large corporations. They say they bear an unfair share of the burden and have an incentive to move plants overseas to where taxes are lower. …Business leaders want the rate to fall below 30% within the next few years and eventually to 25%… The Japan Business Federation, known as Keidanren, says tax cuts could partly pay for themselves by spurring investment. Japan’s current corporate tax rate is higher than most European and Asian countries, although it is lower than the U.S. level of roughly 40%.
If only American politicians could be equally sensible.
The Japanese (at least some of them) even understand that a lower corporate rate will generate revenue feedback because of the Laffer Curve.
I’ve tried to make the same point to American policymakers, but that’s like teaching budget calculus to kids from the fiscal policy short bus.
Let’s switch gears to our second topic and look at what one veteran wrote about handouts from Uncle Sam.
Here are excerpts from his column in the Washington Post.
Though I spent more than five years on active duty during the 1970s as an Army infantry officer and an additional 23 years in the Reserves, I never fired a weapon other than in training, and I spent no time in a combat zone. …nearly half of the 4.5 million active-duty service members and reservists over the past decade were never deployed overseas. Among those who were, many never experienced combat. …support jobs aren’t particularly hazardous. Police officers, firefighters and construction workers face more danger than Army public affairs specialists, Air Force mechanics, Marine Corps legal assistants, Navy finance clerks or headquarters staff officers.
So what’s the point? Well, this former soldier thinks that benefits are too generous.
And yet, the benefits flow lavishly. …Even though I spent 80 percent of my time in uniform as a reservist, I received an annual pension in 2013 of $24,990, to which I contributed no money while serving. …My family and I have access to U.S. military bases worldwide, where we can use the fitness facilities at no charge and take advantage of the tax-free prices at the commissaries and post exchanges. The most generous benefit of all is Tricare. This year I paid just $550 for family medical insurance. In the civilian sector, the average family contribution for health care in 2013 was $4,565… Simply put, I’m getting more than I gave. Tricare for military retirees and their families is so underpriced that it’s more of a gift than a benefit. …budget deficits are tilting America toward financial malaise. Our elected representatives will have to summon the courage to confront the costs of benefits and entitlements and make hard choices. Some “no” votes when it comes to our service members and, in particular, military retirees will be necessary.
The entire column is informative and thoughtful. My only quibble is that it would be more accurate to say “an expanding burden of government is tilting America toward financial malaise.”
But I shouldn’t nitpick, even though I think it’s important to focus on the underlying problem of spending rather than the symptom of red ink.
Simply stated, it’s refreshing to read someone who writes that his group should get fewer taxpayer-financed goodies. And I like the idea of reserving generous benefits for those who put their lives at risk, or actually got injured.
Last but not least, I periodically share stories that highlight challenging public policy issues, even for principled libertarians.
You can check out some of my prior examples of “you be the judge” by clicking here.
Today, we have another installment.
The New York Times has reported that a mom and dad in the United Kingdom were arrested because their kid was too fat.
The parents of an 11-year-old boy were arrested in Britain on suspicion of neglect and child cruelty after authorities grew alarmed about the child’s weight. The boy, who like his parents was not identified, weighed 210 pounds. …In a statement, the police said that “obesity and neglect of children” were sensitive issues, but that its child abuse investigation unit worked with health care and social service agencies to ensure a “proportionate and necessary” response. The police said in the statement that “intervention at this level is very rare and will only occur where other attempts to protect the child have been unsuccessful.”
So was this a proper example of state intervention?
My instinct is to say no. After all, even bad parents presumably care about their kids. And they’ll almost certainly do a better job of taking care of them than a government bureaucracy.
But there are limits. Even strict libertarians, for instance, will accept government intervention if parents are sadistically beating a child.
And if bad parents were giving multiple shots of whiskey to 7-year olds every single night, that also would justify intervention in the minds of almost everybody.
On the other hand, would any of us want the state to intervene simply because parents don’t do a good job overseeing homework? Or because they let their kids play outside without supervision (a real issue in the United States, I’m embarrassed to admit)?
The answer hopefully is no.
But how do we decide when we have parents who are over-feeding a kid?
My take, for what it’s worth, is that the size of kids is not a legitimate function of government. My heart might want there to be intervention, but my head tells me that bureaucrats can’t be trusted to exercise this power prudently.
P.S. I guess “bye bye burger boy” in the United Kingdom didn’t work very well.
P.P.S. But the U.K. government does fund foreign sex travel, and that has to burn some calories.
[…] unlimited, I think the focus should be on helping veterans injured in battle rather than providing lavish benefits to anyone and everyone who ever wore a […]
“VA Spent $20 Million on Art While Soldiers Died Waiting for Care”
by Trey Sanchez
http://www.truthrevolt.org/news/va-spent-20-million-art-while-soldiers-died-waiting-care
scum……………………………………………………..
“The VA Sacrificed Vets for Solar Panels”
http://www.frontpagemag.com/2014/dgreenfield/the-va-sacrificed-vets-for-solar-panels-2/
the military and civil society…
an interesting read…
http://www.tomdispatch.com/post/175855/tomgram%3A_william_astore%2C_drafted_by_the_national_security_state/#more
Thanks for the responses. I guess a bit of collateral damage is unavoidable, whether or not there is an oversight to try and prevent it.
my family has a tradition of military service dating back many years… and our experiences with the military have been very very different from those of lieutenant colonel Slear… I am sure that if he feels overcompensated for his service… that he can find a way to return his excess pension to the u.s. treasury… the VA needs reform on all levels… retirement benefits need to be re-examined… as do bureaucratic procedures… but the most pressing issue is to get the estimated 57 thousand American veterans on VA medical waiting lists timely… and necessary medical care… then change procedures… fix problems… and reform the entire VA system…
Mr. Thong, regarding your 1st question, this will not be a very complete answer, but the government’s introduction of floor prices for foreigners (presumably higher prices than for nationals) will only distort the market. In the long run, how will the government manage these floor prices? Someone in government would have to set the floor price on individual properties and that would just lead to more power in the hands of the government bureaucrats, thus increasing the potential for cronyism and corruption. Plus, look at this question from the perspective of the seller. The government’s actions could have just priced some buyers out of the market and thus reduced the number of potential buyers of his property.
.
Whenever the government intervenes like this, it creates advantages for some and hardships for others. This distortion of the market inevitably leads to a sub-optimal allocation of the market’s resources. From the broadest perspective of the overall market, it adds costs without commensurate benefits.
Mr. Thong, regarding your 2nd question, here is a quote from Adam Smith in The Wealth of Nations: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Any producer who provides tainted food would not last long in his business.
.
It is a completely legitimate libertarian position to hold producers responsible for damages their products cause. Here in the U.S., we have government regulators inspecting food, which has not, by the way, prevented outbreaks of food-borne illnesses. I believe a government bureaucracy for food inspection is a waste. Instead of a bureaucracy and a long litany of regulations, we should have simple laws holding producers responsible for any damages they cause, along with an efficient court system allowing for the timely and proper redress of grievances.
Why do you want to incentivize getting wounded?
Another related question on short-term suffering before the free market self-corrects:
Without state-initiated testing for harmful substances or contamination in food, people might get sick or even die. This would lead to consumers to avoid purchasing products from the related seller, a self-correction mechanism that encourages sellers to ensure their own quality standards for the sake of their bottom lines.
But is there any libertarian recommendation to avoid people suffering before such a self-correction occurs, or does limited govt (as opposed to anarchism) allow for at least some state-enacted quality controls?
Mr Mitchell, I am a relative newcomer to libertarian ideas but am completely convinced of the sheer rationality and ethical implications of personal freedom. Your blog has recently been a great source of information and thought.
As a newbie, would you and your commentors mind me asking for some guidance on what are probably very basic questions?
Here in Malaysia one of the new government rulings is to raise the floor price on properties available for purchase by foreigners, ostensibly to cool the property market and make home ownership more affordable for locals.
Without such state-led intervention, would the result be continually rising property prices due to the large numbers of rich investors internationally?
Is the libertarian response in cases such as this simply to wait for the free market’s invisible hand to stabilize things (e.g. the overly inflated property bubble bursting), at the temporary cost of inflated property prices keeping locals from living in their own towns?
Thanks to any repliers!
I volunteered for and served in the Marines for the regular period, and receive no real extra benefits because of the length of service. And I have the utmost respect for those who served in combat.
That said, I take objection to this:
‘And I like the idea of reserving generous benefits for those who put their lives at risk, or actually got injured.’
Everyone who volunteered put their life at risk, while those who didn’t, got the benefit of a fully-staffed service prepared to die for their country.