Archive for the ‘Switzerland’ Category

The Swiss people are normally very sensible when asked to vote in national referendums. Here are some recent results.

Though my favorite referendum result occurred several years before I started writing on this site.

Given all these results, you won’t be surprised to learn that Switzerland is near the top in rankings of economic freedom, trailing only Hong Kong, Singapore, and New Zealand.

But this does not mean that Switzerland is a libertarian nation. At least not in an ideological sense. And we have two new referendum results that underscore this point.

This past weekend, Swiss voters had an opportunity to get rid of the central government’s value-added tax, personal income tax, and corporate income tax.

Ending those taxes would be a libertarian fantasy, but the initiative to extend the levies was easily approved.

More than 84% of voters have renewed the government’s right to tax its citizens and companies for another 15 years. This is a unique feature of Switzerland’s political system of direct democracy and federalism.  …rejection would have been a nightmare for the government. …said Finance Minister Ueli Maurer in January. “If voters were to say no, the Swiss government wouldn’t have enough funds and there’s no way we could find another source of revenue or introduce spending cuts of the same order.”

Voters were swayed by arguments that a no vote would cause too much fiscal disruption. Slashing the central government’s budget by 60 percent might appeal to ideological libertarians, but it didn’t fly with don’t-rock-the-boat Swiss voters.

The direct federal tax and the sales tax together contributed about two-thirds of the Swiss central government’s budget, bringing in around 43.5 billion Swiss francs ($44.25 billion) in 2016. …Should voters reject the measure, the government would have to slash spending by more than 60 percent practically overnight or find new sources of revenue, Maurer told reporters.

Here’s a pie chart showing the revenue sources for the central government.

I would have voted no, of course, and I wish more Swiss voters had lined up against the initiative.

Not because I would have thought that an immediate 60-percent reduction in the size of the central government was feasible. But a larger share of no votes at least would have sent a signal to politicians in Bern that frugality is a good idea.

There was another referendum over the weekend that also produced an unfortunate result. Swiss voters approved continuing subsidies for state-run media.

The Swiss Broadcasting Corporation, Switzerland’s public broadcaster is largely funded by a broadcasting fee. This fee, known colloquially as Billag, the name of the agency that collects it, is paid by most companies and essentially every household. The No Billag initiative, is a bid to do away with fee. …the No Billag vote was rejected by 71.6% of voters.

The margin of defeat is especially disappointing since libertarians actively campaigned for this initiative.

Switzerland, like many European nations, has certain television and radio channels that are run by the government. …Together with other classical liberals in Switzerland, Frédéric Jollien is fighting against the royalties imposed by the government for media consumption. 450 Swiss Francs, the equivalent of €382 or $456, is the annual fee that consumers are required to pay, regardless if they want state-run TV and radio channels or not. …Journalists (who, by the way, are exempt from paying this fee) are releasing heavy verbal fire on the campaigners. They claim it would cause massive unemployment in the media sector, that it is anti-democratic, and that it would enable big foreign companies to take over the Swiss market.

Alas, the fear campaign succeeded.

But I hasten to add that this doesn’t mean Switzerland is turning towards statism. I suspect the real story is that the Swiss are content with the status quo.

And the status quo (especially by European standards) is a practical form of libertarianism.

Here’s some of what Dan Hannan wrote last year.

I have always loved Switzerland…its devolved decision-making, its entrenched Euroskepticism. …I am a Helvetophile for many of the same reasons as America’s Founders. James Madison was fascinated by the way Switzerland had “no concentered authority, the Diets being only a Congress of Delegates from some or all of the Cantons.” …George Mason was entranced by the militia system: “Every Husbandman will be quickly converted into a Soldier, when he knows & feels that he is to fight for his own. It is this which preserves the Freedom and Independence of the Swiss Cantons, in the midst of the most powerful Nations.” …Switzerland has stubbornly retained its sovereignty, despite being surrounded by the EU. …Swiss democracy is direct, decentralized and devolved. Most fiscal decisions are taken locally. Result? Swiss voters are the happiest in Europe, their economy is the freest, and their state budget the smallest.

And let’s not forget that Switzerland is still a bright spot on gun rights.

In February 2011, Swiss citizens voted in a referendum that called for a national gun registry and for firearms owned by members of the military to be stored in public arsenals. …Hermann Suter, who at the time was vice president of the Swiss gun-rights group Pro Tell, told the BBC then. “The gun at home is the best way to avoid dictatorships—only dictators take arms away from the citizens.” Apparently many of his fellow Swiss agreed. The referendum was easily defeated. Gun ownership in the country has deep historic roots… guns are popular… Children as young as 12 are taught how to shoot…and are encouraged to participate in highly popular target-shooting competitions. The country’s cultural attachment to firearms resembles America’s in some ways…it has the third-highest rate of private gun ownership in the world… The Swiss Defense Ministry estimates that there are 2 million privately owned weapons in the country of 8.3 million people.

Yet there’s almost no gun-related crime.

Switzerland has a low rate of gun crime, and hasn’t seen a mass shooting since 2001.

And let’s not forget that the fiscal burden of government in Switzerland is comparatively modest.

Not by libertarian standards. Not by historical standards.

But compared to other European nations, Switzerland is a fiscal Shangi-La. The tax burden is lower, and spending consumes a smaller share of economic output.

And this translates into lower levels of red ink.

P.S. I find Switzerland to be a very interesting case study, for reasons noted above and also on issues such as decentralization, privacy rights, gun rights, and private retirement savings. But I’m a policy wonk, so I’m drawn to unusual examples. What does surprise me is that other people must be interested in the country as well. My 2011 column comparing Switzerland and the United States is the 7th-most-viewed piece in the history of this site.

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Last September, Economic Freedom of the World was released, which was sort of like Christmas for wonks who follow international economic policy.

I eagerly combed through that report, which (predictably) had Hong Kong and Singapore as the top two jurisdictions. I was glad to see that the United States climbed to #11.

The good news is that America had dropped as low as #18, so we’ve been improving the past few years.

The bad news is that the U.S. used to be a top-5 country in the 1980s and 1990s.

But let’s set aside America’s economic ranking and deal with a different question. I’m frequently asked why European nations with big welfare states still seem like nice places.

My answer is that they are nice places. Yes, they get terrible scores on fiscal policy, but they tend to be very pro-market in areas like trade, monetary policy, regulation, and rule of law. So they almost always rank in the top-third for economic freedom.

To be sure, many European nations face demographic challenges and that may mean Greek-style crisis at some point. But that’s true of many developing nations as well.

Moreover, there’s more to life than economics. Most European nations also are nice places because they are civilized and tolerant. For instance, check out the newly released Human Freedom Index, which measures both economic liberty and personal liberty. As you can see, Switzerland is ranked #1 and Europe is home to 12 of the top 16 nations.

And when you check out nations at the bottom, you won’t find a single European country.

Instead, you find nations like Venezuela and Zimbabwe. Indeed, the lowest-ranked Western European country is Greece, which is ranked #60 and just missed being in the top-third of countries.

Having now engaged in the unusual experience of defending Europe, let’s take a quick look at the score for the United States.

As you can see, America’s #17 ranking is a function of our position for economic freedom (#11) and our position for personal freedom (#24).

For what it’s worth, America’s worst score is for “civil justice,” which basically measures rule of law. It’s embarrassing that we’re weak in that category, but not overly surprising.

Anyhow, here’s how the U.S. score has changed over time.

Let’s close with a few random observations.

Other nations also improved, not just the United States. Among advanced nations, Singapore jumped 16 spots and is now tied for #18. There were also double-digit increases for Suriname (up 14 spots, to #56), Cambodia (up 16 spots, to #58), and Botswana (up 22 spots, to #63). The biggest increase was Swaziland, which jumped 25 spots to #91, though it’s worth pointing out that it’s easier to make big jumps for nations with lower initial rankings.

Now let’s look at nations moving in the wrong direction. Among developed nations, Canada dropped 7 spots to #11. Still a very good score, but a very bad trend. It’s also unfortunate to see Poland drop 10 spots, to #32. Looking at developing nations, Brunei Darussalam plummeted an astounding 52 spots, down to #115, followed by Tajikistan, which fell 46 spots to #118. Brazil is also worth highlighting, since it plunged 23 spots to #120.

P.S. I don’t know if Moldova, Ukraine, and Russia count as European countries or Asian nations, but they all rank in the bottom half. In any event, they’re not Western European nations.

P.P.S. I mentioned last year that Switzerland was the only nation to be in the top 10 for both economic freedom and personal freedom. In the latest rankings, New Zealand also achieves that high honor.

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I haven’t written in any detail about “jury nullification” since late 2010 and it’s time to rectify that sin of omission.

Nullification occurs when a jury votes not guilty because a law is either unjust or wrongly applied, not because a defendant is actually innocent. And I know that’s what I would do if I was on a jury and the government was persecuting someone for engaging is self-defense or getting nabbed by a revenue camera.

The bottom line is that Walter Williams is right when he says that it is immoral to obey bad laws.

Let’s review some expert opinions.

Writing on the editorial page of the New York Times, a former prosecutor urges jury nullification.

Earlier this year, prosecutors charged Julian P. Heicklen, a retired chemistry professor, with jury tampering because he stood outside the federal courthouse in Manhattan providing information about jury nullification to passers-by. …The prosecutors who charged Mr. Heicklen said that “advocacy of jury nullification, directed as it is to jurors, would be both criminal and without constitutional protections no matter where it occurred.” The prosecutors in this case are wrong. The First Amendment exists to protect speech like this — honest information that the government prefers citizens not know. …Jury nullification is not new; its proponents have included John Hancock and John Adams. The doctrine is premised on the idea that ordinary citizens, not government officials, should have the final say as to whether a person should be punished. As Adams put it, it is each juror’s “duty” to vote based on his or her “own best understanding, judgment and conscience, though in direct opposition to the direction of the court.” …Nullification has been credited with helping to end alcohol prohibition and laws that criminalized gay sex. Last year, Montana prosecutors were forced to offer a defendant in a marijuana case a favorable plea bargain after so many potential jurors said they would nullify that the judge didn’t think he could find enough jurors to hear the case.

A column in the Washington Post by Professor Glenn Reynolds at the University of Tennessee argues that juries have an obligation to rein in bad prosecutors.

Despite the evidence, those responsible for convicting you may choose to let you go, if they think that sending you to jail would result in an injustice. That can happen through what’s called “prosecutorial discretion,” where a prosecutor decides not to bring or pursue charges against you because doing so would be unfair, even though the evidence is strong. Or it can happen through “jury nullification,” where a jury thinks that the evidence supports conviction but then decides to issue a “not guilty” verdict because it feels that a conviction would be unjust. …Prosecutorial discretion is regularly applied and generally regarded as a standard part of criminal justice. …So-called jury nullification, on the other hand, gets far less respect. Though it is clearly within the power of juries to refuse to convict whenever they choose, judges and prosecutors tend to view this practice with hostility. …there has been a massive shift of power toward prosecutors, the result of politics, over-criminalization, institutional leverage and judges’ failure to provide supervision. It’s time to redress the balance.

By the way, Glenn has proposed ways (see postscript of this column) of addressing this imbalance, which is tied to over-criminalization.

And here’s another column in the Washington Post arguing in favor of jury empowerment.

As I tried cases, I gained enormous respect for the seriousness with which jurors approached their work. …These jurors had no problem convicting anyone of a violent offense, if the government proved its case. For drug crimes, however, it was a different story. …they frequently voted “not guilty” in nonviolent drug cases, no matter how compelling the evidence. …When I started teaching law, I published an article in the Yale Law Journal situating these D.C. jurors in a long line of jurors…who refused to convict American patriots of sedition against the British crown; jurors who acquitted people guilty of violating the Fugitive Slave Act; and jurors who would not punish gay people for “sodomy” for having consensual sex.

Amen. Juries should pursue justice, not act as rubber stamps when prosecutors act as cogs for an unjust regime.

Now let’s look at a real-world example, as reported by the New York Times.

As much as chocolate and watches, Switzerland is known for bank secrecy. …it also made Swiss banks targets for an assault by the United States government… Bank Frey was among the very few to defy the legal onslaught. And Mr. Buck…was the bank’s public face, responsible for landing and then managing American accounts. That put Mr. Buck in the government’s cross hairs. In 2013, a federal grand jury indicted him for conspiring to help Americans avoid taxes. …But things didn’t go as prosecutors had planned… The crux of the defense was that the responsibility to pay taxes and declare income did not rest with Mr. Buck. It was his clients who had decided not to pay taxes. He was under no obligation to tattle… Prosecutors branded him as a crucial cog in an international tax-evasion scheme. …Then it was Mr. Agnifilo’s turn. …“Stefan Buck has nothing whatsoever, nothing whatsoever, to do with the choice that an American taxpayer makes” to not declare offshore assets. …The jury deliberated for a little more than a day. …the verdict: not guilty.

The story doesn’t mention jury nullification, but I’m assuming – from a technical legal perspective – the prosecutors had an open-and-shut case against Mr. Buck. After all, he did “conspire” to help Americans protect their income from the IRS.

But the jury decided that conviction would be absurd because a Swiss person on Swiss soil has no obligation to help enforce bad U.S. tax policy. So they voted not guilty because that was the only moral choice.

And the good news is that this is becoming a pattern.

In October 2014, one of UBS’s top executives, Raoul Weil, went on trial in Florida. Federal prosecutors accused him of helping clients hide billions. Mr. Weil’s lawyers argued he had no knowledge of or responsibility for what had happened. The jury deliberated for barely an hour before acquitting him. The same week, a Los Angeles jury acquitted an Israeli banker who faced similar accusations. The Americans’ pursuit of foreign bankers no longer looked invincible.

The even-better news is that these nullification decisions by juries may now lead to some “prosecutorial discretion.”

The Justice Department had now lost the three cases it had tried against foreign bankers who helped Americans avoid taxes. Dozens more cases are pending. Those who represent accused Swiss bankers say they expect Mr. Buck’s verdict to embolden defendants and to cause prosecutors to think twice before bringing new charges.

In other words, the bad law will still exist but hopefully will have little or no impact because prosecutors are less likely to file charges and juries won’t convict when they do.

That’s a victory for liberty, though it surely would be best – as we discussed just a few days ago – if politicians repealed the bad laws that make unjust prosecutions possible.

P.S. I’ve confessed mixed feelings about potential nullification in cases of vigilante justice.

P.P.S. In my younger days, I assumed that cops and prosecutors were the good guys, helping to maintain an orderly society. I still think that most of them want to do what’s right, but I also now realize that our Founding Fathers were very wise to include strong protections for defendants in our Constitution. Simply stated, some cops and some prosecutors are bad and those bad apples are why I favor strengthening the Fourth Amendment and have become more skeptical of the death penalty.

P.P.P.S. Even if you’re a law-abiding person, you should support civil liberties.

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There’s a lot to admire about Switzerland, particularly compared to its profligate neighbors.

With all these features, you won’t be surprised to learn that Switzerland is highly ranked by Human Freedom Index (#2), Economic Freedom of the World (#4), Index of Economic Freedom (#4), Global Competitiveness Report (#1), Tax Oppression Index (#1), and World Competitiveness Yearbook (#2).

Today let’s augment our list of good Swiss policies for reviewing the near-universal system of private pensions. I’ve been in Switzerland this week for a couple of speeches in Geneva, as well as interviews and meetings in Zurich and Bern.

As part of my travels around the country, I took the time to learn more about the “second pillar” of the country’s pension system.

Here’s a basic description from the Swiss government (with the help of Google translate).

The first pension funds were founded more than a hundred years ago… In 1972 the occupational pensions were included in the constitution. There it represents the second column in the three-column concept… The BVG compulsory scheme applies to all employees who are already insured in the first pillar… Pension provision in the second pillar is based on an individual savings process. This starts at 25 years. However, the condition is an annual income that exceeds the threshold (since 2015: 21’150 francs). The savings process ends with the reaching of the pension age. The accumulated savings in the individual account of the insured [are] used to finance the retirement pension.

If you want something in original English, here’s a brief description from the Swiss-American Chamber of Commerce.

The second pillar is governed by the provisions of the laws on occupational pension provision (BVG)… Employees who are paid by the same employer an annual salary exceeding CHF 21,150 are subject to compulsory insurance. The share of the salary which is subject to compulsory insurance is…between CHF 24,675 (the coordination deduction) and CHF 84,600… An employer who employs persons subject to compulsory insurance must be affiliated to a provident institution entered in the register for occupational benefit plan. The contributions into the pension scheme depend on age and include a minimum saving portion of 7% – 18% of the coordinated salary plus a risk portion. Both are equally shared between employer and employee. The benefits of the insured persons consist in the old age, invalidity and survivors pensions.

One of the interesting quirks of the system is that the mandatory contribution rate changes with age. The older you are, the more you pay.

I’m not sure that makes a lot of sense if the goal is for people to have big nest eggs when they retire, but nobody asked me. In any event, here’s a table showing the age-dependent contribution rates from an OECD description of the Swiss system.

Technically speaking, the contributions are evenly split between employees and employers, though labor economists widely agree that workers bear the real cost.

It’s also worth noting that the Swiss system is based on “defined contribution” like the Chilean and Australian private retirement systems. This means  retirement income generally is a function of how much is saved and how well it is invested.

By contrast, the Dutch private system is based on “defined benefit,” which means that workers get a pre-determined level of retirement income. As evidenced by huge shortfalls in the defined benefit regimes maintained by many public and private employers in the United States, this approach is very risky if there aren’t high levels of integrity and honesty.

Though that doesn’t seem to be a problem in the Netherlands. Speaking of the Dutch system, here’s a chart I shared back in 2014.

It was designed to laud the Netherlands, but you can see that Switzerland also had a large pool of pension assets, equal to more than 110 percent of GDP (according to OECD data, now 123 percent of GDP).

Looking at this data, ask yourself whether Switzerland (or the Netherlands, Iceland, Australia, etc) will be in a stronger position to handle the fiscal challenge of aging populations, particularly when compared to nations with virtually no private pension assets, such as France, Greece, and Japan.

The Swiss regime certainly isn’t perfect, and neither are the systems in other nations with private retirement savings. But at least those nations are in much better shape to deal with future demographic changes. Workers in Switzerland and other countries with similar systems have real assets rather than unsustainable political promises. And it’s also worth pointing out that there are macroeconomic benefits for nations that rely more on private savings rather than tax-and-transfer entitlement schemes.

In other words, the Swiss system is much better than America’s bankrupt Social Security scheme.

P.S. Back in 2011, I compared five good features of the United States to five good features of Switzerland. If retirement systems were part of that discussion, Switzerland would have enjoyed a sixth advantage.

P.P.S. Switzerland does have some warts. It is only ranked #31 in the World Bank’s Doing Business. It also has a self-destructive wealth tax. And  government spending, though modest compared to neighbors, consumes slight more than one-third of economic output.

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Back in 2009, I shared the results of a very helpful study by Pierre Bessard of Switzerland’s Liberal Institute (by the way, “liberal” in Europe means pro-market or “classical liberal“).

Pierre ranked the then-30 member nations of the Organization for Economic Cooperation and Development based on their tax burdens, their quality of governance, and their protection of financial privacy.

Switzerland was the top-ranked nation, followed by Luxembourg, Austria, and Canada.

Italy and Turkey were tied for last place, followed by Poland, Mexico, and Germany.

The United States, I’m ashamed to say, was in the bottom half. Our tax burden was (and still is) generally lower than Europe, but there’s nothing special about our quality of governance compared to other developed nations, and we definitely don’t allow privacy for our citizens (though we’re a good haven for foreigners).

Pierre’s publication was so helpful that I’ve asked him several times to release an updated version.

I don’t know if it’s because of my nagging, but the good news is that he’s in the final stages of putting together a new Tax Oppression Index. He just presented his findings at a conference in Panama.

But before divulging the new rankings, I want to share this slide from Pierre’s presentation. He correctly observes that the OECD’s statist agenda against tax competition is contrary to academic research in general, and also contrary to the Paris-based bureaucracy’s own research!

Yet the political hacks who run the OECD are pushing bad policies because Europe’s uncompetitive governments want to prop up their decrepit welfare states. And what’s especially irksome is that the bureaucrats at the OECD get tax-free salaries while pushing for higher fiscal burdens elsewhere in the world.

But I’m digressing. Let’s look at Pierre’s new rankings.

As you can see, Switzerland is still at the top, though now it’s tied with Canada. Estonia (which wasn’t part of the OECD back in 2009) is in third place, and New Zealand and Sweden also get very high scores.

At the very bottom, with the most oppressive tax systems, are Greece and Mexico (gee, what a surprise), followed by Israel and Turkey.

The good news, relatively speaking, is that the United States is tied with several other nations for 11th place with a score of 3.5.

So instead of being in the bottom half, as was the case with the 2009 Tax Oppression Index, the U.S. is now in the top half.

But that’s not because we’ve improved policy. It’s more because the OECD advocates of statism have been successful in destroying financial privacy in other nations. Even Switzerland’s human rights laws on privacy no longer protect foreign investors.

As such, Pierre’s new index basically removes financial privacy as a variable and augments the quality of governance variable with additional data about property rights and the rule of law.

P.S. When measuring the tax burden, the reason that America ranks above most European nations is not because they impose heavier taxes on rich people and businesses (indeed, the U.S. has a much higher corporate tax rate). Instead, we rank above Europe because they impose very heavy taxes on poor and middle-income taxpayers (mostly because of the value-added tax, which helps to explain why I am so unalterably opposed to that destructive levy).

P.P.S. Also in 2009, Pierre Bessard authored a great defense of tax havens for the New York Times.

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There was some genuinely good news in 2016, which is more than I can say for 2015 (my “best” development for that year was some polling data, followed by some small-ball tinkering).

Though the good news for 2016 was mostly overseas. Here are the four things from around the world that made me happy this year.

And while we didn’t have any major positive developments in the United States, there was a bit of good news. Yes, it’s “small-ball tinkering,” but I’m always glad for any progress.

So those are the noteworthy good things that happened this year. Now let’s look at the other side of the ledger. What was the bad news of 2016?

Well, the good news (so to speak) is that there was not a lot of bad news. At least if we’re focusing on actual policy changes.

But there are three developments that cause me to worry about the future.

Tomorrow I will write about my hopes and fears for 2017.

Let’s close today’s column with a few special categories.

If there was an award for the most disgusting news of 2016, the NAACP would be the clear winner for their decision to sacrifice black children in order to collect blood money from teacher unions.

And if we also had a prize for most moronic leftist in 2016, there would be another easy winner. Trevor Noah inadvertently showed why gun control doesn’t work even though he wanted to make the opposite point.

Last but not least, if there was a category for surprising news in 2016, there’s no question that Paul Krugman would win that prize for writing something sensible about tax policy.

P.S. My most popular post in 2016 (which also set the all-time record) was the very clever image showing that the enemies of liberty are looters, regardless of their economic status.

P.P.S. My most surreal moment in 2016 was getting attacked on the front page of the Washington Post. I must be doing something right.

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Most folks in Washington are still digesting last night’s debate between Tweedledee and Tweedledum. If that’s what you care about, you can see my Twitter commentary, though I was so busy addressing specific issues that I failed to mention the most disturbing part of that event, which was the total absence of any discussion about the importance of liberty, freedom, and the Constitution.

But let’s set aside the distasteful world of politics and contemplate U.S. competitiveness. Specifically, let’s examine America’s position in the latest edition of the World Economic Forum’s Global Competitiveness Report. This Report is partly a measure of policy (sort of like Economic Freedom of the World) and partly a measure of business efficiency and acumen.

The bad news is that we used to be ranked #1 and now we’re #3.

The good news is that being #3 is still pretty good, and it’s hard to beat Switzerland and Singapore because they have such good free-market policies. And that’s where America falls short.

Indeed, if you look at the top-10 nations and the three major measurements, you’ll notice that the United States ranks extremely high in “efficiency enhancers” and “innovation and sophistication factors,” both of which have a lot to do with the private sector’s competitiveness. But we have a mediocre (at least for developed nations) score for “basic requirements,” the area where government policy plays a big role.

Moreover, if you look at the the biggest obstacles to economic activity in the United States, the top 4 deal with bad government policy.

The tax treatment of companies is easily the main problem, as you might expect since we rank #94 out of 100 nations in a study of business tax policy.

Let’s now look at the indices where the United States scored especially low out of the 138 nations that were ranked.

America’s lowest scores were for exports (#130) and imports (#134), though I take issue with the Report‘s methodology, which is based on trade flows as a share of GDP. The problem with that approach is that the United States has a huge internal market, equal to about 22 percent of the world’s economic output. That’s why our trade flows aren’t very large relative to GDP. Being surrounded by two major oceans also probably has some dampening effect on cross-border trade flows. Yes, America is guilty of some protectionism, but I think our ranking for trade tariffs (#33) is the more appropriate and accurate measure of the degree to which there is a problem.

America also got a very bad score (#128) for government debt, though at least we beat Italy (#135), Greece (#137), and Japan (#138). In case you’re wondering, Hong Kong was #1, as you might expect from a well-run jurisdiction with small government and a flat tax.  Though I must say that it is rather disappointing that the Report doesn’t include rankings for the overall burden of government spending. After all, government debt is basically a symptom of an underlying problem of a bloated public sector.

And there also was a very low score for the business cost of terrorism (#104), which is probably an unavoidable consequence of being the world’s leading superpower (and therefore a target for crazies). That being said, I imagine America’s score could be improved if we weren’t engaging in needless intervention – and thus generating needless animosity – in places such as Syria and Libya.

Here are two indices that deserve special attention. As you can see the United States gets a poor score for wasteful spending and a terrible score for the punitive taxation of profits.

With this information in mind, let’s now remind ourselves about last night’s debate. Did either candidate propose to control spending and reduce pork-barrel programs? Nope.

Did either candidate put forth a realistic plan to lower the corporate tax rate? Hillary’s plan certainly doesn’t qualify since she wants a bunch of class-warfare tax hikes. And while Trump’s plan includes a lower corporate rate, it’s not a serious proposal since he is too timid to put forth a plan to restrain government outlays.

And since neither candidate intends to address America’s looming fiscal crisis, it will probably be just a matter of time before America drops in the rankings.

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