Thanks to Aaron William Osborn for the pointer.
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Pro-Business Does Not Mean Pro-Freedom or Pro-Market
Representatives of the business community frequently are the worst enemies of freedom. They often seek special subsidies and handouts, and commonly conspire with politicians to thwart competition (conveniently, they want competition among their suppliers, just not for their own products). Fortunately, most business organizations still tend to be — on balance — supporters of limited government. But as the Wall Street Journal notes, some state and local chambers of commerce have become relentless enemies of good policy:
…many chambers of commerce on the state and local level have been abandoning these goals. They’re becoming, in effect, lobbyists for big government. In Colorado, a coalition of property owners, conservative think tanks, anti-tax groups and small businesses fought against a ballot initiative in 2005 that was intended to gut the state’s Taxpayer Bill of Rights (Tabor). They lost, and as a result state spending will expand by $5 billion over the next five years, costing the average family several thousand dollars in higher taxes. It was not the teachers’ unions or class-warfare liberals who spearheaded the campaign against Tabor, however — it was the Denver Chamber of Commerce. …In Virginia, the state and local chambers, along with big-business allies, have spent more than $4 million in recent years on ballot initiatives and legislative lobbying to raise $2 billion in taxes for roads, rails, buses and schools. This year they want a billion more for transportation, despite the state’s multibillion-dollar surplus, and have even threatened to run candidates against fiscal conservatives in the legislature who take a “no new taxes” pledge. …In New Jersey — home of some of the worst schools in the nation — the state chamber took out an ad with the teachers’ unions opposing a school-voucher initiative for families in inner cities. The ad was withdrawn only after pro-school reform business members hollered in protest. Last summer taxpayers revolted when Democratic Gov. Jon Corzine called for a $1.5 billion hike in the sales tax; but “the chamber and other business groups sat on their hands in order to avoid making enemies with the legislature,” notes Frayda Levin, New Jersey director of Americans for Prosperity. In Oklahoma the state chamber filed a petition with the state Supreme Court to block eminent domain reform, and vowed to fight a taxpayer-led movement to enact a Colorado-style Tabor. Massachusetts? The state chamber and allied business groups oppose an income tax cut.
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Proposed Hedge Fund Regulations Would Limit Options for All but the Rich
The nanny-state mentality of the Bush Administration and its appointees shows no sign of abating. The latest farce comes from the Securities and Exchange Commission, which want to prohibit all but the very wealthy from taking advantage of successful hedge fund investing. Richard Rahn comments in the Washington Times:
Financial regulation is most often justified by arguing it is needed to protect all participants from those who would engage in fraud or theft, and to protect unsophisticated investors from losing money in investments they do not understand. The U.S. Securities and Exchange Commission (SEC) has just proposed that the amount of liquid net worth an individual must have before investing in hedge funds and other so-called risky investments be raised to as much as $2.5 million. People meeting a net liquid worth requirement are considered “accredited investors.” …Even though most people would agree it is important to try to protect “widows and orphans” from unscrupulous and/or incompetent financial promoters, there is a fine line between protecting those who need protection and denying freedom to those who don’t. Does it make sense to prohibit a person who has recently obtained a graduate degree in finance from a leading business school from buying and selling hedge funds, because he or she has not yet accumulated some arbitrary amount of wealth — while legally allowing any adult man or woman to take all of his or her wealth and go to Las Vegas and blow it at the gambling tables?
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America’s High Corporate Tax Rate Hurts Competitiveness
As other developed nations race to cut corporate tax rates in order to attract jobs and investment, politicians in the United States are sitting on their hands. Kevin Hasset of the American Enterprise Institute explains how this hurts America:
Imagine you are the CEO of a major U.S. manufacturing company. You are looking to locate a new domestic plant. All other factors being equal, would you locate the plant in the state with the highest taxes? Now, make that question international. Would you locate a plant in a country with high taxes or low? The obvious answer points to a growing economic problem for the United States. Among the 30 wealthy countries that make up the Organization for Economic Cooperation and Development (OECD), the U.S. ranks second, just below Japan, for the highest combined tax rate (federal and state) on corporate profits. Our position in the world hierarchy is relatively new. In 1994, the U.S. ranked 18th. But since then, other nations have been cutting rates—from an average of 37 percent to 28 percent—while the U.S., at 39 percent, has maintained its high level. …most foreign multinationals are headquartered in countries that charge taxes only on domestic operations. If a French firm locates a plant in Ireland, then all of the profits of the Irish plant are taxable in Ireland, but are free from French taxation. So French firms have an enormous incentive to locate in the country with the lowest taxes they can find. That rules out the United States. …the latest literature suggests that relative tax rates are a big, big deal. Indeed, the dramatic flow of international capital to the lowest tax environment is one of the strongest and most reliable findings in the history of economic science. If a country lowers its rate below its rivals, as Ireland, now with a 12.5 percent rate, began doing more than a decade ago, then multinationals flood that nation with capital. It’s very much in the data. …The status quo—one of the most unfriendly tax policies toward business on earth—is unacceptable to anyone who cares about the future of American industry. No one should be surprised if our best firms continue to flee overseas and if foreign-based firms prefer locating their plants outside America.
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Blacks Used Gun Ownership to Fight the KKK
Ken Blackwell’s Townhall.com column favorably comments on how 2nd Amendment rights enabled oppressed blacks to defend themselves in the Jim Crow south:
In his 2004 book, The Deacons for Defense: Armed Resistance and the Civil Rights Movement, Tulane University history professor Lance Hill tells their story. Hill writes of how a group of southern working class black men advanced civil rights through direct action to protect members of local communities against harassment at schools and polling places, and to thwart the terror inflicted by the Ku Klux Klan. He argues that without the Deacons’ activities the civil rights movement may have come to a crashing halt.
…Following a KKK night ride in Jonesboro, the Deacons approached the police chief who had led the parade and informed him that they were armed and unafraid of self-defense. The Klan never rode through Jonesboro again. Local cross burnings ceased when warning shots were fired as a Klansmen’s torch met a cross planted in front of a black minister’s home. The initial desegregation of Jonesboro High School was threatened by firemen who aimed hoses at black students attempting to enter the building. When four Deacons arrived and loaded their shotguns, the firemen left and the students entered unscathed. It was this series of efforts by the Deacons that caused the Klan to leave Jonesboro for good.
Similar work in Bogalusa, Louisiana drove the KKK out of that town as well, and led to a turning point in the civil rights movement. Acting as private citizens in lawful employment of their constitutional rights, the Deacons demonstrated the real social impact of the freedoms our nation’s founders held dear.
…Gun control measures, from the slave gun bans of the 1700s South to the Brady Bill regulations of the 1990s, have unfairly targeted black Americans and have worked to curtail a disproportionate number of their constitutional rights.
Flat Tax in Romania
Romania’s flat tax is generating results that would make French politicians delirious with joy — huge increases in tax revenue. Income tax collections jumped 44.7 percent in 2005, the year the flat tax was introduced. (Sadly, the increased revenue isn’t keeping pace with Romanian government spending; as the country works to meet the various conditions for EU membership, its budget deficit is growing, which has led to complaints from Brussels.)
Rather than learn from this “Laffer Curve” example, the high-tax nations that dominate the EU are complaining about Romania’s “harmful tax competition.” A Hungarian news service reports:
Romania increased spending on roads, railways, pensions and other areas last year, mainly in December, to bring standards closer to those in the EU, which it joined on January 1.
…The Finance Ministry said today the government boosted revenue to 31.8% of GDP last year from 30.3% the previous year, helping meet a key EU recommendation. EU Monetary Affairs Commissioner Joaquin Almunia said last year that budget revenue as a proportion of GDP was lower than in any EU nation and recommended the country increase it. Economic growth, which the government has estimated at about 8% last year from 4.1% in 2005, also stimulated revenue collection, the finance ministry said.
…Romanian government spending increased 25% last year in nominal terms and accounted for 33.5% of GDP, from 31.2% in 2005, the ministry said. Income tax collection rose 44.7% to 9.8 billion lei ($3.8 billion). Romania has said income tax revenue has consistently increased since January 1, 2005, when it introduced a flat tax of 16% on corporate and personal income, the lowest in eastern Europe. It replaced a corporate tax rate of 25% and a personal income tax rate of as high as 40%.
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War Is Swell
In his post below, Justin Logan outlines some of Max Boot’s howlers on Iraq, and asks: “why should anyone be listening to him now?” It’s a good question. However, I think Boot serves a useful function. If you find yourself arguing that neoconservatives are empire-hungry, war-mad, and contemptuous of civil liberties–and your opponent accuses of you of setting up a straw man–point him to Boot. He’s the real deal.
As Justin noted, here’s Boot making “the Case for American Empire.” And here he is telling us that “Empire” is the right term:
“No need to run away from the label,” argues Max Boot, a fellow at the Council on Foreign Relations in New York: “America’s destiny is to police the world.”
Here’s Boot offering America’s occupation of the Philippines–with its 200,000 dead civilians–as a success, and as reason for hope that Iraq will be a success as well. Here he is suggesting that China may be looking into “creating man-made earthquakes” as a way of fighting an asymmetric war against the United States. (There’s a threat to keep you up nights.) So threatening is the world we live in, in fact, that it’s time to “Forget privacy, we need to spy more.”
But for classic Boot, you can’t beat this LA Times column from last summer, in which he declares that General Curtis LeMay was one of the “greatest peacemakers in modern history,” a proper candidate for a Nobel Peace Prize. It’s an odd choice.