Yet another great post by Rich Karlgaard (posted below) regarding the current tax burden imposed on all Americans.I am sure Steve Forbes, editor-in-chief as well as President and CEO of Forbes Magazine who is the most vocal proponent of a flat tax reform for the United States is excited to see the critically acclaimed Mr. Karlgaard attack this issue with such vigor.
ABC’s John Stossel writes today: “For more than 150 years after we declared independence, we spent less than $1,000 each on government. Yet by 1999, government cost every man, woman and child an average of more than $10,000 per year – more than housing and health care combined... You probably don't know how much you pay, because the government is sneaky about how it taxes you.”
Stossel belts a home run. Read his piece here. Laugh, cry or throw up (depending on your mood and meds) but please do this: Email it to 100 friends and tell them to do the same. Congress – the worst since the 1850s in my opinion – is utterly uninterested in tax reform. President Bush has strangely, unforgivably, given up. The American people will have to lead.
More on America’s tax sickness... Tom Bevan of Real Clear Politics writes: “Just how burdensome is the current U.S. tax system? Consider the facts: the Office of Management and Budget estimates Americans will spend 6.4 billion hours and $265 billion this year alone complying with the obligations of a tax code that now contains more than 66,000 pages of rules and regulations. More than 6 in 10 Americans now hire someone to help prepare their returns every year.” Bevan’s full blog here.
This is an excellent article by Steve Forbes found in the April 17, 2006 issue of Forbes Magazine which highlights the perils that stymie economic growth and capitalistic prosperity.Those who advocate higher taxes to solve economic woes are just adding another nail to the death coffin of the economy.
Lower taxes and free enterprise is only way to stimulate growth.However, government officials would much rather take your money and spend it as “they please” instead of allowing the common man make the best economic decisions for themselves.High taxes lead to bigger government, which leads down the road to totalitarian control.
Rock star Bono brought international attention to the movement to eliminate or substantially reduce the debts of impoverished countries in Africa. He is continuing to advocate massive increases in foreign aid there, as well as elsewhere. Last year British Prime Minister Tony Blair made aid to Africa an agenda item at July's G-8 meeting, calling for enormous increases.
Alas, this emphasis on giving more money to benighted countries is mis-begotten. Most of it will be wasted, and despite "safeguards" all too much of it will be siphoned off by corrupt politicos and bureaucrats. Africa has received more than $400 billion in aid since 1960, yet per capita income has declined. No other area of the world has suffered such a regression. Blair, Bono et al. should be focusing on measures that would allow sub-Saharan Africa's existing entrepreneurial energies to put their countries on the path of rapid, India-China-Pacific-Rim-like economic growth. There are huge barriers blocking those who could catapult Africa's poor nations onto an economic fast track.
High taxes. Because most of these countries have catastrophically high tax rates, people are forced into the underground economy, and taxes go uncollected. This is counterproductive to economic growth. In Niger one enters the 45% bracket when personal income reaches about $735. Nigeria, which is making some effort to reform its economic policies and has government ministers cognizant of the effect taxes have on economic activity, has a personal income tax rate of 25%, which is triggered when income reaches about $1,250.
African nations should take their cues from central and eastern European countries. These former Communist countries have adopted variations of the flat tax. Compared with western Europe's, their tax rates are laughably low--and their economies are booming. During the last decade, for instance, tiny Slovakia has been establishing itself as a major European auto manufacturer.
Ireland is another role model, having the most dynamic economy in western Europe. In little more than a generation Ireland grew from being one of the poorest countries in western Europe to one of the richest--its per capita income exceeds that of Britain, Germany and France.
Unsound monetary policy. Another key to rapid economic growth is a stable currency. Poor nations should look to Lithuania, Latvia and Estonia. These Baltic nations were racked by inflation in the early 1990s. Then each instituted a currency board (or, in the case of Latvia, a variation of one), which tied each country's currency directly to a hard currency (now the euro). The mechanisms worked, and the inflation dragons were quickly slain.
Regulatory obstacles. Poor nations must also do far more to remove barriers to doing business. Each year the World Bank comes out with an intriguing report, Doing Business. The survey of each country covers the ease or difficulty of doing business by a number of measures, such as procedures needed to start a legal business, rules concerning the hiring and firing of workers, registering property and enforcing commercial contracts. The report notes that poor countries make it difficult for entrepreneurs to flourish: "Entrepreneurs face more regulatory obstacles in Africa than in any other region." While a few sub-Saharan states are instituting reforms--Mauritius and South Africa rank among the easiest places in the world to do business--the continent as a whole lags the rest of the globe. The survey cites a telling example:
In Burkina Faso, Oumarou runs a food supply business. He would like to move into the formal economy so that he can serve larger customers, who demand value-added tax receipts. But registering a business requires a minimum capital equal to nearly five times annual income per capita. Fees alone cost 1.5 times income per capita. To get a bank loan Oumarou would have to put up a large amount of collateral. But he has never registered his property, because doing so would require fees equal to 16% of its value. In the face of such obstacles, Oumarou keeps his business informal--and small. He is not alone: In a country of more than 12 million people, only 50,000 work in the formal sector.
AIDS and Malaria. Africa has been decimated by disease, particularly AIDS and malaria. More needs to be done to educate people there about AIDS, as well as to get the necessary medicines to treat it. Malaria kills more than a million people a year, primarily children. Yet, thanks to death-blind environmentalists, Western nations have pressured African countries not to use the most effective weapon against malaria--DDT. Very small amounts of DDT judiciously applied to and in dwellings would virtually eradicate malaria. During a severe outbreak several years ago South Africa defied the naysayers and used DDT. Result: The incidence of malaria plummeted.
For years experts have talked about the so-called oil curse: Countries with large amounts of oil end up with economies that over time perform miserably because the windfall revenues breed corruption and bad economic policies. But if Africa suffers from any curse, it's that of foreign aid. Exacerbating that curse will only hurt this already suffering continent. However, promoting such measures as low taxes, sound money and reforms to make it easy for entrepreneurs to do business, as well as working to stop the spread of AIDS and eradicate malaria, would quickly turn African economies from stagnation to rapid growth. The resulting new middle classes would then be able to deal with blights such as endemic government corruption.
This is an excellent article by Rich Karlgaard. I have included a link to Forbes Magazine so you can review other articles that he has written. This is one of the very few blogs that I religiously follow as Rich very rarely is off track and more often than not hits a home run with his pithy analysis of current events and the economy.
. . . Is if America loses its swagger and decides that it can’t compete globally. That’s why it’s so bracing to read of an American CEO -- of a Midwestern manufacturer, no less -- who credits his company’s spectacular success to globalism.
Jim Owens, CEO of Peoria-based Caterpillar, writes:
“Personally, I can think of no faster path to a worldwide recession than for the twin engines of the global economy -- the United States and China -- to turn against one another. Both countries need to make an extra effort to ensure that we treat each other with mutual respect. Rather than threatening protectionism, leaders must redirect their energies toward improving competitiveness and opening markets.” Full story.
“A Ph.D. economist,” says Cat’s website, “Owens has been Caterpillar's Chairman and CEO for two years. During those years, Caterpillar posted record sales and profits, increased its global workforce by more than 20 percent and maintained its position as a leading net exporter, with more than $9 billion in Caterpillar products exported from the United States in 2005.”
In today’s Wall Street Journal, Owens says: “American manufacturing can win on the world stage. If we embrace globalization with the spirit of optimism and fierce competitiveness that has made American manufacturing great, we will ensure we stay on top of the world economy for years go come.”
You can’t argue with Owens’ results. Caterpillar’s stock has gone from 48 to 78 in the last six months. Odds are, you won’t hear this good news from Lou Dobbs. It goes against Dobb’s storyline -- that U.S. companies need the protective skirt of tariffs to compete globally.
Speaking of the appalling Dobbs, here is a nicely aimed dart by Don Boudreaux, chairman of the economics department at George Mason. And another good Dobbs put-down by Vinnie Mirchandani
In her debut performance representing the United States at the World Championship Cross Country Meet in Japan, Sharon Thompson raced to a 59th place finish in the 8k clocking a 27:54 on the wind swept shores of Japan.
Having represented the United States before in international competition both in Europe and Asia, Sharon is no stranger to the hardships of international travel, time changes, food adjustments, and fierce competition.However, as a new comer on center stage of the vaulted World Championships this experience will surely develop her further as she makes a bid to make the US Olympic Team in 2008 in the 10,000 meter run.
Unfazed by the rigors of trying to ascend to the pinnacle in her sport she attacks every challenge with unrelenting, mind numbing, determination until she achieves her goal. One of her favorite quotes is âIf the load is too heavy for you it is just right for me.â This appropriately shares the mental toughness one must have to be a success in life. Long ago she understood that some people may have more talent or nature gifts in running or other things but that NO ONE would out work her and thus she would beat almost anyone in her path because mental toughness and hard work beats talent all day long.
Good job Sharon!Keep up the hard work.We all are cheering for you and know you are on your way to bigger and better things!
