What drives domestic politics today is government income redistribution. It forms the core of virtually every fiscal battle, since every policy that gives some what they don’t pay for must be funded from others’ pockets.
That gets highlighted during income tax season. The lowest 40% of earners now pay negative income taxes as a group (largely due to the refundable Earned Income Tax Credit). That forces higher earners to shoulder the entire income tax burden.
In his new book, Flat Tax Revolution (Regnery, 2005), which is subtitled Using a Postcard to Abolish the IRS, Steve Forbes pulls no punches when describing the federal income tax code:
I saw this article by Albert Esplugas some time ago and decided it should be translated to English, so here it is.
Gradualism or abolitionism?
Good News Is Bad News. “Those who would understand the mysteries of the marketplace must drink deeply of the well of Wisdom.” That’s Socrates, 122BC.
In virtually all major economies business sentiment indicators are promising additional production and employment gains. Most prominently, international stock market valuations, fueled by brightening expectations of future profitability gains, are regaining lost ground, swiftly moving back towards levels seen before the sharp price correction which set in 2000/01. In fact, the world’s major economies are widely seen as entering a new phase of prosperity.
This piece by Charles Wheelan, by the economics editor of Yahoo Finance, is provocatively titled “Taxes Can Be Good for You.” So we read and read to find out precisely how it is the case that having some of our earnings and property taken from us by force can actually be good for us as individuals. In the course of his argument he makes silly comments like: “A nation with zero taxes would look something like Haiti, or Baghdad just after the U.S. invasion.”
Having just read today’s New York Times’ lead page-one article titled “Massachusetts Sets Health Plan for Nearly All,” I think I know what it must be like to live in some place like Caracas and participate in a popular celebration of the joyous wonders wrought by La Revolución. That’s certainly the spirit of the article.
Protectionists rejoiced in rejecting a foreign investment by a Dubai company. Now the United Arab Emirates, Kuwait and Qatar are giving the protectionists what they wanted. The central banks of these countries are starting to diversify their reserves out of US dollars and into euros. With foreign investors owning 50% of all US Treasuries, I wonder how the protectionists plan to finance the massive national debt as well as the trade deficit while at the same time discouraging foreigners from investing in US dollar assets.
