Worthy Reads

Obama Wants to Make America Poorer to Make the Government Richer. Larry Lindsey has an excellent column in the Wall Street Journal that explains that Senator Obama’s plan to apply Social Security taxes toWorthy Reads income beyond $250,000 will transform the program from a (crummy) annuity into a (terrible) welfare program. But the real damage is to the economy. Because his proposal will damage incentives by boosting the marginal tax rate on highly-productive taxpayers, there will be significant “Laffer Curve” effects that will result in $5 of losses to the productive sector for every $1 of revenue for government…

What Do America, North Korea, and the Soviet Union Have in Common? Sadly, the answer to this question is that America is in unsavory company because of taxation. First, the internal revenue code applies even to citizens who live and work abroad, an approach followed by very few nations other than hell-holes like North Korea. No other developed nation has this “citizenship-based” tax system, largely because it is unfair amd anti-competitive. It is unfair because Americans who live and work abroad already are subject to all applicable foreign taxes (much as foreigners who live and work in America get the pleasure of dealing with the IRS). And it it anti-competitive because this punitive policy makes it harder for American companies to earn a larger share of the market when competing in foreign markets. America’s tax policy is so punitive that some people are giving up their citizenship. But rather than dealing with this problem by fixing the tax code, politicians have decided to impose punitive exit taxes. The Economist has some of the unpleasant details…

The second embarrassing feature of American tax law is that exit taxes historically have been adopted only by the world’s most reprehensible regimes. As Richard Rahn explains in the Washington Times, America should not mimic the Soviet Union by confiscating the wealth of people who displease the ruling elites…

Shame on General Electric. Ordinary people sometimes think that big business and the free market represent the same ideals, but far too often big business uses its influence to seek special favors from politicians. The global warming issue is a great example. General Electric’s stock has been dropping, so the companies executives are seeking to use the Lieberman-Warner bill to line their pockets at the expense of energy consumers. Tom Borelli’s column makes for depressing reading…

More Insanely Stupid Government Waste. Kudos to a local TV station that exposes the waste and fraud being perpetrated by the Federal Emergency Management Agency. Years after hurricane Katrina, FEMA is subsidizing crime and idleness…

The Ethanol Scam Is Even Worse than Thought. The ethanol program is a huge scam devised to funnel money from taxpayers and consumers into the pockets of big agribusinesses (and campaign contributions from those industries to venal politicians). But this shakedown scheme also forces American taxpayers to subsidize foreign energy consumers. Foxnews.com has the story…

Right Message, Wrong Messenger. A column in the Wall Street Journal correctly explains that Senators Obama and McCain have a habit of displaying economic illiteracy. So it is rather ironic that the author is Karl Rove, the man who spent the past seven years steering George W. Bush into one bad economic decision after another. On many occasions, I visited economists in the Administration to complain about Keynesian fiscal policy (such as rebates), wasteful spending (such as farm bills and Medicare expansion), and senseless regulation (such as Sarbanes-Oxley), and invariably I would be told that the Administration was pursuing bad policy but that there was nothing that could be done because Karl Rove’s shop was calling the shots. Only in Washington can people display this amount of chutzpah and still retain credibility…


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June 2008
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