Treasury Department Calls For Lower Corporate Taxes

The Treasury Department held a conference today on how the US corporate tax structure is a danger to American companies ability to compete in the market and to the US economy in general. Cato has a nice summary of the salient points here. This issue is growing rapidly in importance as EU rates continue to fall. Unfortunately, it is a politically impossibility to call for tax relief for corporations when popular sentiment is ever more anti-corporate and anti-glob globalization. When the idea of a US company setting record profits is seen as a bad thing, a call to help corporate America is sure to fall on deaf ears.

Update: Some video of this debate featuring the president of the Club for Growth. Good stuff.

10 Realities About Globalization and the Economy

Carpe Diem has a list of ten realities to counter the prevailing myths of how the economy only benefits the rich, among others. They are nice bullet points to throw at the despondent.

Are Taxes The Cause Of All Human Misery?

Cafe Hayek's Donald Boudreaux has a great article up showing that prohibition was both enacted and repealed as a result of changes in the income tax.

The standard, schoolbook history of alcohol prohibition in the United States goes like this:

Americans in 1920 embarked on a noble experiment to force everyone to give up drinking. Alas, despite its nobility, this experiment was too naive to work. It soon became clear that people weren't giving up drinking. Worse, it also became clear that Prohibition fueled mobsters who grew rich supplying illegal booze. So, recognizing the futility of Prohibition, Americans repealed it in 1934.

This popular belief is completely mistaken. Here's what really happened:

National alcohol prohibition did begin on Jan. 16, 1920, following ratification of the 18th Amendment and enactment of the Volstead

Speakeasies and gangster violence did become familiar during the 1920s.

And Americans did indeed keep drinking.

But contrary to popular belief, the 1920s witnessed virtually no sympathy for ending Prohibition. Neither citizens nor politicians concluded from the obvious failure of Prohibition that it should end.

Fantastic stuff, read it your self.

Ah, But What Does Your Free Buy You?

Massachusetts' mandatory health insurance law has made insurance available to everyone. What it haven't made available are actual doctors. The Wall Street Journal has a report on what happens to people who sign up for their first health insurance.

On the day Ms. Lewis signed up, she said she called more than two dozen primary-care doctors approved by her insurer looking for a checkup. All of them turned her away.

Her experience stands to be common among the 550,000 people whom Massachusetts hopes to rescue from the ranks of the uninsured. They will be seeking care in a state with a "critical shortage" of primary-care physicians, according to a study by the Massachusetts Medical Society released yesterday, which found that 49% of internists aren't accepting new patients. Boston's top three teaching hospitals say that 95% of their 270 doctors in general practice have halted enrollment.

For those residents who can get an appointment with their primary-care doctor, the average wait is more than seven weeks, according to the medical society, a 57% leap from last year's survey.
...
A principal reason: too little money for too much work. Median income for primary-care doctors was $162,000 in 2004, the lowest of any physician type, according to a study by the Medical Group Management Association in Englewood, Colo. Specialists earned a median of $297,000, with cardiologists and radiologists exceeding $400,000.

At the same time, the workweek for primary-care doctors has lengthened, and they are seeing more patients. The advent of managed care in the mid-1990s added to the burden as insurance companies called on primary-care doctors to serve as gatekeepers for their patients' referrals to specialty medicine.

In Massachusetts, the state-subsidized plans, collectively called Commonwealth Care, are provided by private insurance companies. Patients can choose from among six options. Residents who make between one and three times the poverty level ($48,000 for a family of three) are now eligible for coverage under the plan. Doctors are reimbursed by insurance providers -- at below-market rates comparable with Medicaid reimbursements.

I can only hope that the debacle in the Commonwealth will serve as a warning before we end up with national healthcare.

HT Don Luskin

Oh No! She Caught The Fat!

I always knew I should shun unattractive people. Now I have science on my side! A new study shows that obesity is contagious, like the flu, or the gay.

Obesity appears to spread from one person to another like a virus or a fad, researchers reported yesterday in a first-of-its-kind study that helps explain -- and could help fight -- one of the nation's biggest public health problems.
...
"What spreads is an idea. As people around you gain weight, your attitudes about what constitutes an acceptable body size changes, and you might follow suit and emulate that body size," Christakis said. "It may cross some kind of threshold, and you can see an epidemic take off. Once it starts, it's hard to stop it. It can spread like wildfire."

Like wildfire! What could possibly stop this spread of fatness? Well, the study goes on to say that a radical combination of not eating burgers everyday and moving about occasionally might help, but they need more funding to continue research. They also suggest that spreading images of a healthy, thin lifestyle can act as an antibody, preventing the fat from spreading any further.

"If these close social environments can promote a disease, they can also promote solutions to disease," said William H. Dietz of the federal Centers for Disease Control and Prevention. "These same social networks might be used to turn a disease like obesity around."

I have already been contacted by scientists hoping to use my physique to inspire the masses, but I warned them that if fat people knew such perfection was possible, it would probably drive them to suicidal despair. Which is the other reason I avoid those contagious fat people: for their own good.

HT Reason

French Think Too Much?

So says the French Government.

In proposing a tax-cut law last week, Finance Minister Christine Lagarde bluntly advised the French people to abandon their "old national habit."

"France is a country that thinks," she told the National Assembly. "There is hardly an ideology that we haven't turned into a theory. We have in our libraries enough to talk about for centuries to come. This is why I would like to tell you: Enough thinking, already Roll up your sleeves."

Apparently part of a policy initiative to cut taxes and raise productivity, the French President is also hoping to lure back some of the wealth that has fled along with its owners to low-tax countries.

In her National Assembly speech, Lagarde said that there should be no shame in personal wealth and that the country needed tax breaks to lure back the rich.

"All these French bankers" working in London and "all these fiscal exiles" taking refuge from French taxes in Belgium "want one thing: to come back to France," she said. "To them, as well as to all our compatriots who are looking for the keys to fiscal paradise, we open our doors."

Indeed, the idea of admitting one's wealth, once considered déclassé, is becoming more acceptable. A cover story in the popular weekly VSD this month included revelations that just a few years ago would have been unthinkable: the 2006 income of leading French personalities (€13 million, or $18 million, for the soccer player Zinédine Zidane, €8.75 million for the rocker Johnny Hallyday, €242,000 for Prime Minister François Fillon, €79,000 for Sarkozy).

It looks like at least one European politician thinks that taxing everything that moves within an inch of its life might not be the best wealth-creation strategy.

HT Cato at Liberty

Food or Energy?

Classically Liberal has a long post up about sacrificing food for ethanol, and other problems with politically driven energy policy.

This ethanol craze has the support of virtually all the vermin that scurry about the halls of Congress. The Left drool over it because it lessens carbon emissions. The Bushites and neo-cons talk about energy independence and self-sufficiency (an old Mercantilist belief). Politicians from agricultural states love the subsidies because it allows them to bring home the pork to their constituents.

Read the whole thing.

American Thuggary

Robert Novak has a scary article at Townhall.com about how American Unions are killing free trade agreements with the last friends the US has in South America.

The shocker came June 29 as Congress cleared out of Washington for the Fourth of July holiday. Pelosi announced that Rangel and presumably Levin would be off to Peru and Panama to demand new changes in their labor laws as payment for the negotiated trade agreements. She rejected the Colombian pact out of hand.

U.S. Trade Representative Susan Schwab, a former Senate staffer, usually treats Congress with care -- but not in a July 6 letter to Pelosi: "Unilaterally requiring another sovereign country to change its domestic laws before the U.S. approves a trade agreement would be a fundamental break with U.S. laws, policy and practice. No past administration or Congress -- Democratic or Republican -- has taken such a step. Nor would the United States agree to such a procedure if demanded by another nation."

Read the whole thing here.

Brownback Calls For A Flat Tax

Senator Sam Brownback is a great guy. He was my commencement speaker at college, and I am perhaps the only libertarian in the country who would vote for him for president, but by the time the primaries roll around to my state I am sure he will have already withdrawn. This column he wrote calling for an alternative Flat Tax just makes me like him even more.

People often laugh when I say on the campaign trail that the tax code should be taken behind the barn and killed with a dull axe. In fact, one man in Iowa was so excited by this proposal that he presented me with an axe before I finished my remarks (fittingly, I was speaking in a barn).

There's a reason people welcome my proposal to kill the tax code -- it's a monster of inscrutable complexity, and I say that as a former lawyer who took every tax law class I could.

Today's tax code -- which is sixteen times longer than the Bible -- is unpredictable, manipulative and hinders the economic growth that generates more prosperity for all Americans.

HT Club for Growth.

How Dare You, Sir!

Congress has just cut off the salary for Andrew Biggs, the new Deputy Commissioner of Social Security. Apparently, the fool dared to suggest that young workers be allowed to invest their Social Security in private accounts. The scoundrel.

International Tax Rates

While many like to think of the US as a low tax nation, when it comes to corporate taxes, we have the second highest rates in the world. Around the world, even in the most strident welfare states of Europe, tax rates are falling. Germany has just cut it's rates to 30%, in comparison to our 39%. Eastern Europe is going even farther, instituting Flat Taxes at very low rates.

As the cost of doing business abroad falls and globalization continues to accelerate, any business of significant size will begin to look at the cost of their location. For example, what if Microsoft moved to Singapore? Or Albania? The difference in revenue between 39% and 20% would be very significant. Small businesses may not be able to move, but they will be more successful in low-tax environments. Since small business accounts for 50% of GDP in the US, putting them at a competitive disadvantage to international rivals can have a significant impact on our economy as a whole.

Why are US corporate tax rates so high? I would guess that there is more political incentive to cut personal taxes than business taxes, since individuals vote. The "progressive" element will also shout down anyone proposing a tax cut for corporations as pandering to big business, preventing any effort to provide relief.

Any economist will tell you that corporate taxes are just passed along to the shareholders and consumers. It makes no sense to tax corporations at all. I would advocate abolishing corporate taxes entirely, and simply taxing the profits when they are paid out, but since that will never happen we need to at least begin cutting them to competitive levels. Some free market types, like Treasury Secretary Hank Paulson are sounding the call, but as long as people fear corporations and seek to punish success, there will be little improvement.

Cigar Tax

Apparently, there is currently a $.048 per cigar tax cap. If a new bill winding its way through the Senate is passed, that cap would rise to $10 - an increase of 20,000%:

"'I'm not sure in the history of man, since our forefathers founded the country in 1776, that there's ever been a tax increase of 20,000 percent,' said Newman, who runs the Tampa business founded by grandfather Julius Caesar Newman. 'They had the Boston Tea Party for less than this.'

...

"'Why don't we just go out of business?' Newman said. 'Here, you can run our company, Mr. Government.'

...

"The [Cigar Association of America] has lobbied to exclude cigars from the bill, but bristles at the public relations challenge: How do you oppose a sin tax Congress has rigged to help sick kids?"

HT: Drudge Report

Police Arrest Man For Asking Police For ID After Being Asked For ID

This is too good, so I am just going to quote Reason:

Evan Herzoff was videotaping Denver police arresting someone when a cop asked for his ID. Herzoff produced his ID and asked Officer Jeffrey Morgan for his business card. "Let's take you to jail instead," Morgan responded. Police handcuffed Herzoff and took him to jail, where he spent the night. A charge of trespass against Herzoff was later dismissed, and the city paid him $8,500 to settle a lawsuit.

N.J. Senator Proposes Toy Gun Ban

This article would lead you to think that he only wants to ban realistic gun replicas (AKA the cool ones) but in the comments page for the Fark headline, the submitter claims that in a television interview the Senator claimed his bill would ban even the see-through plastic toy guns.

I can't even begin to express how stupid this idea is. To again cite Fark,"American history has shown that children with toy guns are bombs waiting to go off. I remember all the school shootings of the fifties fondly."

Big Three's Workers Cost More

Carpe Diem has a nice chart up pointing out that American auto makers' labor costs are 50% higher than those of Toyota, Honda, and Nissan.

Why are they higher? Unions.

What benefits do the auto companies receive for their higher costs? Why, the quality and craftsmanship that are the bywords of the American automobile, as opposed to those cheaply made Asian cars which fall apart after a mere 300,000 miles or so.

Buy American! Buy Union!

First Trans-Fat Statewide Ban?

Guess which state (or should I say Commonwealth) is moving towards banning those delicious fatty foods?

Hint:

Oldies but Goodies

Apologies for being stingy with posts lately. Here are some fun tidbits from the last few days:

• From Albany Times Union article (HT: Fark headline):

"In one test, TSA inspectors hid the components of a fake bomb in carry-on luggage that also contained a bottle of water. Passengers are prohibited from carrying containers holding more than three ounces of liquids, gels or aerosols through airport checkpoints. The screeners at Albany International confiscated the water bottle but missed the bomb."

• From Anchorage Daily News article (via Club for Growth post):

"'When you are chairman of a committee, you represent the whole nation; you don't represent one district, which is in my case is one state,' [Congressman Don Young (R-AK)] said. 'Earmarks are good for the country and good for the people you represent. That is the role of a congressman. If you can't get money for your district, you shouldn't be in Congress,' he said."

• From Slate article (via a Greg Mankiw's blog post):

"Alumni with kids are 13 percentage points more likely than alumni without kids to give in any year. The tendency to give rises slowly—by three more percentage points total—through kids' early teens... And, indeed, while giving declines after age 14 among parents of kids who do not go on to apply, giving rises from about 18 to 25 percentage points (above the level of the childless alums) for those whose kids do apply a few years later. The timing is certainly suggestive."

• From a Reason article:

"In theory, redistribution of wealth is supposed to benefit the least fortunate. In practice, it doesn’t necessarily work out that way. In a new study, Matthew Ladner of the Goldwater Institute and Paul J. Gessig of the Rio Grande Foundation crunch census data for the 1990s and find that the poor did much better in states with low taxes and low spending than in states with higher taxes."

• From Club for Growth post:

"With alarming contempt toward the U.S. Constitution and American taxpayers, Representatives David Obey (D-WI) and Barney Frank (D-MA) have introduced new legislation clamping down on political speech by outlawing all private expenditures from general elections for the U.S. House of Representatives. Ironically named the Let the People Decide Clean Campaign Act, the Obey-Frank legislation will publicly fund all general election House races with taxpayer dollars."

Pr0n Tax

From this article:

"California Assemblyman Charles Calderon says he doesn't have anything against pornography. He just wants to tax it.

The Democrat from Whittier has a bill that would add an eight percent tax to X-rated products, sex shows, and explicit
pay-per-view movies."

HT: Fark Headline, the first comment on the thread of which contains what I consider to be a knock down argument against such measures: "...and I'm sure everyone will agree on a very specific definition of 'porn'"

Giuliani on Flat Tax

According to Rudy Giuliani, speaking at a town hall meeting in Florida, the US economy is dependent on how our tax code works: "I don't think a flat tax is realistic change for America. Our economy is dependent upon the way our tax system operates."

I am reminded of the SNL Weekend Update segment Really!?!

HT: Drudge Report

The EU and the UK

This is just absolutely amazing. Regarding the issue of a referendum in Britain regarding a new EU treaty, a top EU official admitted that the treaty would involve a transfer of sovereignty from the UK to the EU, then went on to say:

"'I am astonished at those who are afraid of the people: one can always explain that what is in the interest of Europe is in the interests of our countries,' he told Belgian newspaper Le Soir.

"'Britain is different. Of course there will be transfers of sovereignty. But would I be intelligent to draw the attention of public opinion to this fact?'"

HT: Fark Headline

Some Reading Material

Missouri has passed a castle law (HT: Fark Headline). a topic about which Freakonomics has a good post.

Reason has a good article entitled "Bogus Claims of Bigotry" in which is found this gem of a line: " Oh, please. This is like saying that Dan Quayle got ridiculed because he's a blond."

Reason also does a public service by giving proper attribution to South Park for discussing the "Green to be Seen" issue waaaaaaay before the New York Times.

The EU, in a stunning move apparently designed to reclaim its title as world's top agricultural subsidy machine, is considering plans to make "payments directly to farmers, encouraging them to diversify into other crops, rather than continue to overproduce sometimes poor-quality wine." Rather than, say, letting people make bad wine, not sell any, and thereby learn a valuable lesson about real life.

Apparently, police in Philadelphia feel that they are the law and that one or both of the following is illegal: (a) singing in a park [loudly enough to interfere with a police officer hearing his radio], (b) not asking "how high" when a police officer tells you to jump. Luckily, at least one judge disagrees (HT: Fark Headline).

B Movies

Reason has an article entitled "Amazon Women in the Avocado Jungle... of Lies" concerning Bill Maher and including this picture:I am quite surprised that anyone (other than my friends and I) gets this reference.

Terrorism and Investing

The SEC has added a new tool to their website which allows users to quickly find information regarding companies that do business in and with countries that have been declared State Sponsors of Terrorism by the Secretary of State. From Motley Fool article:

"Citing the agency's progress in using interactive computer technology to make public disclosures more accessible to investors, Chairman Christopher Cox stated, 'No investor should ever have to wonder whether his or her investments or retirement savings are indirectly subsidizing a terrorist haven or genocidal state.' True enough.

"Existing law mandates that companies report on any material activities in a country designated a 'State Sponsor of Terrorism' by the Secretary of State. No new regulation has been enacted by the securities regulators. The SEC is simply providing easy access to the required information, without including any additional editorial comment."

Redistributing Campaign Wealth

ScrappleFace has another hilarious piece, this one about Barak Obama and Hillary Clinton redistributing their campaign money to less fortunate candidates. Read it - it's short and sweet - a great way to start Monday.

HT: Club for Growth