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Posts Tagged ‘Bono’

If I asked you what Donald Trump and Bono have in common, the easy and accurate answer is that they both have lots of money.

But if I asked you to identify a shared perspective by the two men, at first glance that would seem to be a much harder question.

After all, it seems like a rock star and a real-estate tycoon are about as different as two people could possibly be.

Yet the answer should be obvious.

I’ll give you a big hint. You probably have the same perspective as well.

At least if you answer “no” to the first question and “yes” to the second question.

  1. Do you ever voluntarily pay extra tax?
  2. Or do you, like John Kerry or Bill and Hillary Clinton, take prudent steps to minimize the amount of your income confiscated by government?

In other words, the perspective shared by Donald Trump and Bono is one that is widely held by every sensible person. Simply stated, your income belongs in your pocket, not in the grasping hands of politicians.

This irks politicians such as David Cameron in the U.K., who seem to think we have some sort of moral obligation to help finance their vote-buying efforts.

But I bet almost all of us agree with Trump’s view. Here are some excerpts from a CNN report.

Trump was unambiguous. “I pay as little as possible,” he said. “I fight like hell to pay as little as possible, for two reasons. Number one, I’m a businessman, and that’s the way you’re supposed to do it, and you put the money back into your company and employees and all of that.” “But the other reason is that I hate the way our government spends our taxes. I hate the way they waste our money. Trillions and trillions of dollars of waste and abuse and I hate it,” Trump said. “And I’ll be probably the first candidate in the history of politics within this country to say, I try — by the way, like every single taxpayer out there — I try to pay as little tax as possible, and again, one of the big reasons is I hate what our country does with the money that we pay.”

Amen.

As an economist, I don’t want tax increases because the economy will be hurt and workers will suffer.

But what upsets me at a visceral level is the notion of sending more money to DC when there’s so much waste, fraud, and abuse.

And I suspect tens of millions of other Americans agree that it would be foolish to reward the wasteful antics of Washington politicians with more of our money.

Which is why almost all of us also agree with Bono’s view. As reported by the U.K.-based Mirror, Bono says it is very “sensible” to minimize tax and that it would be “stupid” to behave otherwise.

Members of U2 have hit back at claims they shield millions of pounds in overseas tax havens – claiming they are just “being sensible”. In an interview with Sky News, lead singer Bono insisted the band pays a fortune in tax and it was the right decision to move some of their business to the Netherlands. “It is just some smart people we have working for us trying to be sensible about the way we are taxed,” he said. …“Because you’re good at philanthropy and because I am an activist people think you should be stupid in business and I don’t run with that.”

Bingo, he’s exactly right.

Indeed, even though I’ve praised Bono’s economic analysis in the past, I suspect he doesn’t even understand how right he is.

Because he’s not just doing what’s right from his band’s perspective, he’s also doing what’s right for the rest of us as well.

P.S. While I’m glad lots of leftists seek to minimize their tax burdens, it would be better if they weren’t such total hypocrites.

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I wrote last year about the remarkable acknowledgement by Bono that free markets were the best way to lift people out of poverty. The leader of the U2 band and long-time anti-poverty activist specifically stated that, “capitalism has been the most effective ideology we have known in taking people out of extreme poverty.”

As the old saying goes, I couldn’t have said it better myself. Too many politicians and interest groups want us to believe that foreign aid and bigger government are the answer, but nations that have jumped from poverty to prosperity invariably have followed a path of free markets and small government.

But today’s topic isn’t foreign aid.

Instead, I want to come to Bono’s aid. He recently defended his home country’s favorable corporate tax regime. Here are some excerpts from a report earlier this month in the Irish Times.

U2 singer Bono has said Ireland’s tax regime, used to attract multinational companies such as Apple, Facebook and Google to Irish shores, has brought Ireland “the only prosperity we’ve known”. Speaking in an interview in today’s Observer newspaper, Bono said Ireland’s tax policy had given the country “more hospitals and firemen and teachers”. “We are a tiny country, we don’t have scale, and our version of scale is to be innovative and to be clever, and tax competitiveness has brought our country the only prosperity we’re known,” he said. …“As a person who’s spent nearly 30 years fighting to get people out of poverty, it was somewhat humbling to realise that commerce played a bigger job than development,” said Bono. “I’d say that’s my biggest transformation in 10 years: understanding the power of commerce to make or break lives, and that it cannot be given into as the dominating force in our lives.”

So why does Bono need defending?

Because bosses from the leading Irish labor union apparently think he said something very bad. Here are some excerpts from a story published by the U.K-based Guardian.

Unite, which represents 100,000 workers on the island of Ireland, launched a blistering attack on the U2 singer for remarks…defending the 12.5% tax rate on corporations enjoyed by multinational companies such as Apple, Google, Facebook and Amazon. …Unite pointed out that one in four Irish people have to endure social deprivation, according the state’s own official Central Statistics Office. Mike Taft, Unite’s researcher and an economist, told the Guardian: “The one in four who suffer deprivation as well as the tens of thousands of others having to put up with six years of austerity will regard Bono’s remarks with total derision, it is the only word anyone could use to describe what he has said. “…for six years we have seen public services smashed apart due to austerity cuts, and here we have Bono talking about low corporation tax bringing us prosperity.”

I have three reactions.

First, I wonder whether the union is comprised mostly of private-sector workers or government bureaucrats. This may be relevant because I hope that private-sector union workers at least have a vague understanding that their jobs are tied to the overall prosperity of the economy. But if Unite is dominated by government bureaucrats, then it’s no surprise that it favors class-warfare policies that would cripple the private sector.

Second, the union bosses are right that Ireland has been suffering in the past six years, but they apparently don’t realize that the nation’s economy stumbled because government was getting bigger and intervening too much.

Third, maybe it’s true that “one in four” in Ireland currently suffer from “deprivation,” but that number has to be far smaller than it was thirty years ago. Here’s a chart, based on IMF data, showing per-capita economic output in Ireland. As you can see, per-capita GDP has jumped from $15,000 to more than $37,500. And these numbers are adjusted for inflation!

I gave some details back in 2011 when I had the opportunity to criticize another Irish leftist who was blithely ignorant of Ireland’s big improvements in living standards once it entered into its pro-market reform phase.

I don’t know how the folks at Unite define progress, but I assume it’s good news that the Irish people now have more car, more phones, more doctors, more central heating, and fewer infant deaths.

Last but not least, none of this should be interpreted as approval of Ireland’s current government or overall Irish policy. There’s too much cronyism in Ireland and the overall fiscal burden (other than the corporate income tax) is onerous.

I’m simply saying that Bono is right. Pro-growth corporate tax policy has made a big – and positive – difference for Ireland. The folks at Unite should learn a lesson from the former President of Brazil, who was a leftist but at least understood that you need people in the private sector producing if you want anything to redistribute.

P.S. Bono isn’t the only rock star who understands economics.  Gene Simmons, the lead singer for Kiss, stated that “Capitalism is the best thing that ever happened to human beings. The welfare state sounds wonderful but it doesn’t work.”

P.P.S. Irish politicians may understand the importance of keeping a low corporate tax rate, but they certainly aren’t philosophically consistent when it comes to other taxes.

P.P.P.S. Some statists have tried to blame Ireland’s recent woes on the low corporate tax rate. More sober analysis shows that imprudent spending hikes and misguided bailouts deserve the blame (Ireland’s spending is particularly unfortunate since the nation’s period of prosperity began with spending restraint in the late 1980s).

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Sometimes you find support for capitalism and small government in some rather unexpected places.

I was surprised, for instance, when I found out that Gene Simmons, the lead singer for Kiss, stated that, “Capitalism is the best thing that ever happened to human beings. The welfare state sounds wonderful but it doesn’t work.”

That’s pretty hard core.

Bad news for Denmark’s Lazy Robert?

Or what about the Finance Minister of Denmark’s left-wing government, who admitted that, “We live in a world of global competition for jobs… That requires a modernization of the welfare state.”

That’s not hard core, to be sure, but it certainly suggests that he understands the need to reduce the burden of government spending.

And my jaw hit the floor when I read that former KGB bigwig Vladimir Putin remarked that, “Many European countries are witnessing a rise of [the] dependency mentality when not working is often much more beneficial than working. This type of mentality endangers not only the economy but also the moral basics of the society.”

I’m not about to take lessons in societal morality from a strongman like Putin, but it’s nonetheless surprising that he recognizes that handouts can turn people into supplicants.

So after reading all these examples, perhaps you won’t be overly shocked to learn that Bono, head of the famous U2 band, is a supporter of capitalism. He’s no Milton Friedman, as you’ll see, but check out this quote from an interview in the Guardian.

My father was Labour, classic Dublin Northside household. And I still carry that with me. And though I believe that capitalism has been the most effective ideology we have known in taking people out of extreme poverty, I don’t think it is the only thing that can do it, and in some ways I wish it wasn’t.

Even with his caveats, it’s big news when one of the world’s leading anti-poverty campaigners acknowledges that free markets are the best tool for improving the lives of poor people.

“Please don’t use naughty words like capitalism in my presence”

Bono’s comments sort of remind me of when the former leftist president of Brazil remarked that, “…it was necessary to first build capitalism, then make socialism, we must have something to distribute before doing so.”

Neither Lula nor Bono are libertarians, of course, but at least their views are rooted in reality. Which is more than can be said for many of the people in Washington who have never produced anything and have no idea how markets actually work.

Perhaps even more stunning is the fact that Bono defends tax competition and fiscal sovereignty.

…at the heart of the Irish economy has always been the philosophy of tax competitiveness. Tax competitiveness has taken our country out of poverty. People in the revenue accept that if you engage in that policy then some people are going to go out, and some people are coming in. It has been a successful policy. On the cranky left that is very annoying, I can see that. But tax competitiveness is why Ireland has stayed afloat.

Wow, there’s no ambiguity to that statement. I’d like to think he’s knowledgeable about the benefits of tax competition because he’s watched my videos or read my writings, but the real story is that he lived through and personally experienced the Irish miracle.

He saw his relatively poor country become very successful, in large part because of big improvements in tax policy. And he obviously understands the importance of maintaining Ireland’s low corporate tax rate (which I’ve also argued is very important to keep Ireland from sinking further into statist stagnation).

Let’s close with a couple of additional examples of folks on the left who have confessed some very un-PC thoughts, such as the New York Times columnist who bravely wrote that, “This is painful for a liberal to admit, but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in a soul-crushing dependency. …Most wrenching of all are the parents who think it’s best if a child stays illiterate, because then the family may be able to claim a disability check each month.”

“We’ve learned from you that communism doesn’t work”

Perhaps most amazing is that a high-ranking official from China’s communist government stated that, “If you look at the troubles which happened in European countries, this is purely because of the accumulated troubles of the worn out welfare society. I think the labour laws are outdated. The labour laws induce sloth, indolence, rather than hardworking. The incentive system, is totally out of whack.”

Last but not least, surely it’s big news that even Fidel Casto confessed that, “The Cuban model doesn’t even work for us anymore.”

P.S. Sometimes even Obama says reasonable things, such as the time he remarked that “No business wants to invest in a place where the government skims 20 percent off the top.” Or the time he said that it was best to ““let the market work on its own.” Unfortunately, when you read the fine print and look at the context, there’s no indication that the President actually has learned anything about economics.

P.P.S. My favorite examples of liberals crossing the ideological aisle are Justin Cronin and Jeffrey Goldberg, both of whom wrote very powerful anti-gun control columns.

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