27 April 2010

Today’s Tabbloid
PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

Obama for Entrepreneurs, but Chilean Government Now

Not American Ones [Cato at Wants Higher Taxes on Junk
Liberty] Food [Cato at Liberty]
APR 26, 2010 10:08P.M. APR 26, 2010 10:06P.M.

By Chris Edwards By Juan Carlos Hidalgo

Entrepreneur.org ran an article today that begins: Following Rahm Emmanuel’s advice of not letting a crisis go to waste,
the new center-right government in Chile now wants to extend the
This afternoon, President Obama addressed the Presidential permanent rise in tobacco taxes—supposedly adopted as a measure to
Summit on Entrepreneurship organized by the Department finance post-earthquake reconstruction—to foods with high
of State and the Department of Commerce … designed to concentrations of salt and trans fat [in Spanish]. Jaime Malañich, the
promote entrepreneurship in Africa, the Middle East, and Health Minister, said that the earthquake is opening up an opportunity
South, Central and Southeast Asia. to implement a measure that would increase the government’s revenue
and fight obesity and that has been considered for many years.
Meanwhile, on the home front, Obama signed into law a health bill,
which includes a massive new mandate on businesses to My colleague Ian Vásquez wrote a few days ago that, by announcing
file billions more tax returns for their routine business dealings. Obama unnecessary tax increases as post-earthquake reconstruction measures,
supports a financial regulatory bill that could kill the angel investment the recently-inaugurated administration of Sebastian Piñera was quick to
industry, and thus end angel support of start-up businesses. Obama disappoint those who expected a bold move toward strengthening free
supports raising the top two income tax rates, even though 44 percent of market policies that have made Chile a Latin American success story. If
the income hit will be small business income. And Obama supports these announcements are any guide, expect more disappointments.
raising the capital gains tax, even though a lower gains rate has
been crucial to the success of high-tech entrepreneurship in Silicon
Valley elsewhere.
FISCALLY CONSERVATIVE BLOG FEEDS
The Obama administration and today’s Democrats are driven by
regulatory zeal, lust for higher revenues, and apparent ignorance of the Monday Links [Cato at Liberty]
workings of the market economy. I don’t think they planned it this way, APR 26, 2010 10:04P.M.
but their anti-market actions are accumulating cut by cut, threatening
major long-term damage to America’s standard of living. By Chris Moody

• A real solution for a starving continent: Why Bono is wrong to

blame the West for African poverty.

• An overview of the economic reforms necessary for a transition to

liberal democracy throughout Africa.

• Secretary of Education Arne Duncan taking data out of context to

stage a “crisis.”

• The General Motors ads that claim they paid back their
government loan are BS — GM is still Government Motors.

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Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com 27 April 2010

• Podcast: “Public Sector Unions Threaten Prosperity” featuring FISCALLY CONSERVATIVE BLOG FEEDS
Armand Thieblot.
ATR Will Rate Against Financial
Reform Cloture Vote
FISCALLY CONSERVATIVE BLOG FEEDS
[Americans for Tax Reform]
Financial Reform Cloture Vote APR 26, 2010 04:13P.M.

Fails: Back to the Drawing With the Senate voting on the cloture motion for Senator’s Dodd’s S.
3217, the Restoring American Financial Stability Act of 2010 this evening
Board [Americans for Tax at 5:00pm, ATR sent the following legislative ...

Reform]
APR 26, 2010 06:08P.M.
FISCALLY CONSERVATIVE BLOG FEEDS
Today, the U.S. Senate voted 57-41 against cloture to proceed to consider
Sen. Dodd’s (D-Conn.) Restoring American Financial Stability Act of Raise My Taxes!!! [Americans
2010. This legislation, as drafted, has seve...
for Tax Reform]
APR 26, 2010 02:15P.M.

FISCALLY CONSERVATIVE BLOG FEEDS Last week, the SEIU bussed people into the Illinois state capital in an
astroturf operation calling for tax hikes to protect plushy union
Debt Commission Co-Chair contracts. The professional protesters actually chanted &qu..;.

Alan Simpson’s Anti-Taxpayer

Voting Record [Americans for FISCALLY CONSERVATIVE BLOG FEEDS

Tax Reform] The Greek Model [Cato at

APR 26, 2010 05:12P.M.
Liberty]
[PDF Version] Responding to criticism from taxpayer advocates in an APR 26, 2010 02:13P.M.
interview today with Neil Cavuto, former Sen. Alan Simpson (R-Wyo.),
co-chairman of President Obama’s debt commission, ... By David Boaz

It was a good idea to get science and democracy from the ancient Greeks.
It’s not such a good idea to get fiscal policy from the modern Greeks.

But that’s the way we’re headed.

Greece has a budget deficit of 13.6 percent. We’re not in that league —
ours is only 10.6 percent, the highest level since 1945.

Greece has a public debt of 113 percent of GDP. We’re not there yet. But
the 2009 Social Security and Medicare Trustees Reports show the
combined unfunded liability of these two programs has reached nearly
$107 trillion.

Under President Obama’s budget, debt held by the public would grow
from $7.5 trillion (53 percent of GDP) at the end of 2009 to $20.3
trillion (90 percent of GDP) at the end of 2020. It could rise to 215
percent of GDP in 30 years. Welcome to Greece.

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Here’s a graphic presentation of the official debt and real net liabilities of FISCALLY CONSERVATIVE BLOG FEEDS
various countries, including the United States and Greece at the right.
(From the Telegraph, apparently based on Jagadeesh Gokhale’s report.) Graham Takes Wind Out of
Climate Talks, Kerry Presses On
- Sign ATR’s Energy Petition
Above! [Americans for Tax
Reform]
APR 26, 2010 01:23P.M.

Sen. Graham has recently announced he is frustrated with Democrat

leadership and is pulling away from the massive energy tax that Sen.
Kerry and Sen. Lieberman were set to introduce today. But ...

And here’s a Heritage Foundation chart on where the national debt is

headed in the coming decade: FISCALLY CONSERVATIVE BLOG FEEDS

On Tonight’s Kudlow Report

[Larry Kudlow’s Money
Politic$]
APR 26, 2010 01:19P.M.

CNBC this evening at 7pm ET:

FINANCIAL REFORM SHOWDOWN

- CNBC’S Hampton Pearson reports the latest news and developments..

- Sen. Kay Bailey Hutchison (R-TX; Senate Banking Committee member)

GET DERIVATIVES OUT OF THE BANK? ; BUFFETT; TOO BIG

Paul Krugman wrote, “My prediction is that politicians will eventually be TO FAIL
tempted to resolve the [fiscal] crisis the way irresponsible governments
usually do: by printing money, both to pay current bills and to inflate - Christopher Mayer, Senior Vice Dean; Prof. of Economics and Finance
away debt. And as that temptation becomes obvious, interest rates will at Columbia Business School Columbia University
soar.” Now he was writing in 2003, when a different president was in - Bill Isaac , Fmr. FDIC Chairman; Chairman of The Secura Group of
office, but he was also warning about the possibility of a ten-year deficit LECG
of $3 trillion. Presumably the same warnings apply to today’s much - Brian Gardner, Keefe Bruyette & Woods
larger deficit projections. And he was absolutely right to fear that
government would turn to inflation as a supposed solution. MARKETS & THE V-SHAPED RECOVERY
STOCKS CHEAPEST SINCE 1990?
CATERPILLAR SOARS…

- Brian Wesbury, First Trust Advisors Chief Economist

- Don Luskin, CNBC Contributor; Trend Macro Chief Investment Officer
- Stefan Abrams, Bryden-Abrams Investment Management Managing
Partner

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Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com 27 April 2010

Please join us. The Kudlow Report. 7pm ET. CNBC. FISCALLY CONSERVATIVE BLOG FEEDS

Update: Senator Shelby says

FISCALLY CONSERVATIVE BLOG FEEDS Republicans will block reform
Obama to debt commission: bill [Americans for Tax Reform]
APR 26, 2010 12:43P.M.
Feel free to break my tax pledge
The Washington Post is reporting that Sen. Shelby says Republicans will
[Americans for Tax Reform] block Dodd financial reform bill: “If we hang together on the floor, we
APR 26, 2010 12:59P.M. can create critical mass...If we just pa...

[PDF Version] During his campaign, President Obama made a “firm

pledge” not to raise “any form” of taxes on families making less than
$250,000 per year. White Hous... FISCALLY CONSERVATIVE BLOG FEEDS

Taxpayers Will Lose Under Any

FISCALLY CONSERVATIVE BLOG FEEDS Dodd-Shelby Financial Bill
Well-Worn Ideological Grooves Compromise [Americans for
II [Cato at Liberty] Tax Reform]
APR 26, 2010 12:56P.M. APR 26, 2010 12:40P.M.

By Jim Harper The Senate will vote on the motion to invoke cloture to proceed to
consider Senator’s Dodd’s S. 3217, the Restoring American Financial
The Consumerist relates the story of a potential Verizon customer who Stability Act of 2010. Unless a compromise between Sen...
grew frustrated with his inability to get its high-speed FiOS Internet
service. After resorting to emailing the CEO of the company, his service
was promptly installed.
FISCALLY CONSERVATIVE BLOG FEEDS
“Verizon is a corporation who cares about their customers and not only
about the bottom line,” wrote the newly happy customer. Costly IRS Mandate Slipped
Now ask yourself: Just how separable are “caring for customers” and into Health Bill [Cato at Liberty]
“the bottom line”? APR 26, 2010 11:57A.M.

It’s interesting that many people’s ideological grooves have these By Chris Edwards
concepts in opposition. But business owners know how much time they
spend slavishly trying to please customers—because that affects their Most people know about the individual mandate in the new health care
bottom lines. When big businesses do it badly, that affects their bottom bill, but the bill contained another mandate that could be far more costly.
lines and invites competition.
A few wording changes to the tax code’s section 6041 regarding 1099
(Needless to say, the telecommunications area needs more competition, reporting were slipped into the 2000-page health legislation. The
to bring customer service and bottom lines closer together). changes will force millions of businesses to issue hundreds of millions,
perhaps billions, of additional IRS Form 1099s every year. It appears to
See also: Well-Worn Ideological Grooves I be a costly, anti-business nightmare.

Under current law, businesses are required to issue 1099s in a limited set
of situations, such as when paying outside consultants. The health care
bill includes a vast expansion in this information reporting requirement
in an attempt to raise revenue for an increasingly rapacious Congress.

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Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com 27 April 2010

In a recent summary, tax information firm RIA notes the types of Taxpayer Information Number or TIN from the business. If
transactions covered by the new 1099 rules: the vendor does not supply you with a TIN, you are obligated
to withhold on your payments.
The 2010 Health Care Act adds “amounts in consideration for
property” (Code Sec. 6041(a) as amended by 2010 Health Private transactions are the core of a market economy, and the source of
Care Act §9006(b)(1)) and “gross proceeds” (Code Sec. America’s growth and prosperity. Now the federal government is
6041(a) as amended by 2010 Health Care Act §9006(b)(2)) to imposing a vast new web of red tape on perhaps billions of these growth-
the pre-2010 Health Care Act categories of payments for generating private exchanges.
which an information return to IRS will be required if the
$600 aggregate payment threshold is met in a tax year for For what purpose? So the spendthrift Congress can shake a few extra
any one payee. Thus, Congress says that for payments made bucks out of private industry? The business sector is the generator of
after 2011, the term “payments” includes gross proceeds paid America’s high living standards, but most federal legislators just see it as
in consideration for property or services. a kitty to be raided or a cow to be milked dry.

Basically, businesses will have to issue 1099s whenever they do more I’m stunned that there wasn’t a broader debate before such a costly
than $600 of business with another entity in a year. For the $14 trillion mandate was enacted. If it goes into effect, it will waste vast quantities of
U.S. economy, that’s a hell of a lot of 1099s. When a business buys a human effort in filling out forms, reworking computer systems,
$1,000 used car, it will have to gather information on the seller and mail collecting and organizing data, and fighting the IRS. The struggling
1099s to the seller and the IRS. When a small shop owner pays her rent, American economy can’t afford anymore suffocating tax regulations.
she will have to send a 1099 to the landlord and IRS. Recipients of the This mandate is a giant deadweight loss. It should be repealed.
vast flood of these forms will have to match them with existing
accounting records. There will be huge numbers of errors and
mismatches, which will probably generate many costly battles with the
IRS. FISCALLY CONSERVATIVE BLOG FEEDS

Tax CPA Chris Hesse of LeMaster Daniels tells me: IL Gov. Quinn Continues to
Under the health legislation, the IRS could be receiving Push Unpopular Tax Increases
billions of more documents. Under current law, businesses
send Forms 1099 for payments of rent, interest, dividends, [Americans for Tax Reform]
and non-employee services when such payments are to APR 26, 2010 11:49A.M.
entities other than corporations. Under the new law,
businesses will be required to send a 1099 to other businesses Perhaps coming to the understanding that the Second Annual Pat Quinn
for virtually all purchases. And for the first time, 1099s are to Income Tax Increase Proposal is no more popular than its predecessor,
be sent to corporations. This is a huge new imposition on Illinois Gov. Quinn is starting to diversify his portfolio...
American business, costing the private economy much more
than any additional tax that the IRS might collect as a result.

There appears to have been little discussion before this damaging

mandate was slipped into the health bill and rammed through Congress,
but a few business groups did raise concerns. Here’s what the Air
Conditioner Contractors of America said:

The House bill would extend the Form 1099 filing

requirement to ALL vendors (including corporate) to which
they pay more than $600 annually for services or property.
Consider all the payments a small business makes in the
course of business, paying for things such as computers,
software, office supplies, and fuel to services, including
janitorial services, coffee services, and package delivery
services.

In order to file all these 1099s, you’ll need to collect the

necessary information from all your service providers. In
order to comply with the law, you would have to get a

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FISCALLY CONSERVATIVE BLOG FEEDS • Only if monetary stimulus or accelerated (once expectations come
into play) can the new pattern of production and employment be
Hayek after 35 Years [Cato at maintained.

Liberty] The consequence of monetary stimulus is “a distribution of employment

APR 26, 2010 11:23A.M. which can be maintained only by a rate of inflation which would rapidly
lead to a disorganization of all economic activity.”
By Gerald P. O’Driscoll
The lecture is worth reading by those who have not done so, and
Today I reread F. A. Hayek’s Nobel Lecture, “The Pretence of rereading by those who have.
Knowledge.” Hayek was awarded the Nobel Memorial Prize in 1974 and
delivered his lecture on December 11, 1974. I was amazed at how modern [Cross-posted at Thinkmarkets.]
it was, and appropriate once again for the times.

The 1970s were terrible times: stop-go demand management policies had
produced stagflation that would continue for the rest of the decade. FISCALLY CONSERVATIVE BLOG FEEDS
Hayek said that “we have indeed at the moment little cause for pride: as
a profession we have made a mess of things.” He charged that the mess EPIC: Suspend Airport Body
had been produced by policies the majority of economists
“recommended and even urged governments to pursue.” Scanners [Cato at Liberty]
APR 26, 2010 11:02A.M.
The focus of his lecture was on scientism and how its errors had led
economists and the Western economies to where they found themselves By Jim Harper
at that moment. What was the chief theoretical error? It was “the belief
that we can permanently assure full employment by maintaining total
money expenditure at an appropriate level.” The “Pretence of
Knowledge” was that economists had or could ever have the knowledge
required to do that.

What was the correct theory of the cause of widespread unemployment?

It is “the existence of discrepancies between the distribution of demand
among the different goods and services and the allocation of labour and
other resources among the production of those outputs.” We call such
discrepancies a coordination failure.

The coordination failure cannot be resolved by stimulating demand

because spending is always on particular goods and services. There is no
aggregate out put on which to spend money. Aggregate demand and
supply are categories of a model with no empirical counterparts.

Unless economists can solve the knowledge problem, they have no way of Last week, the Electronic Privacy Information Center released a petition
aligning spending with actual preferences. Stimulus policies are more from a group it spearheaded, asking the Department of Homeland
likely to aggravate as alleviate the problem. Security to suspend deployment of whole-body imaging (aka “strip-
search machines”) at airports.
Indeed, it was stimulus that caused the coordination failure. Hayek
outlined his theory succinctly in one paragraph. The petition is a thorough attack on the utility of the machines, the
process (or lack of process) by which DHS has moved forward on
• Monetary injections into particular markets stimulate demand only deployment, and the suitability of the privacy protections the agency has
temporarily. claimed for the machines and computers that display denuded images of
air travelers.
• Labor and other resources are drawn into the stimulated activities
[think housing, 2002-07]. The petition sets up a variety of legal challenges to the use of the
machines and the process DHS has used in deploying them.
• Once the monetary stimulus ceases or merely slows, the production
and employment cannot be maintained. Whole-body imaging was in retreat in the latter part of last year when an

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amendment to severely limit their use passed the House of government systems and gives reason to settle down about cyberthreats
Representatives. The December 25 terror attempt, in which a quantity of from China.
explosives was smuggled aboard a U.S.-bound airplane in a passenger’s
underpants, gave the upper hand to the strip-search machines. But the China was the top country of origin for attacks against the
DHS has moved forward precipitously with detection technology before, government sector in 2009, accounting for 14 percent of the
wasting millions of dollars. It may be doing so again. total, but too much should not be read into that statistic. The
apparent country of origin says little about who actually is
My current assessment remains that strip-search machines provide a behind an attack, said Dean Turner, director of Symantec’s
small margin of security at a very high risk to privacy. TSA efforts to Global Intelligence Network.
control privacy risks have been welcome, though they may not be
enough. The public may rationally judge that the security gained is not China’s ranking is due primarily to the large number of
worth the privacy lost. computers in the country, Turner said. Less than a quarter of
attacks originating in China were directed at government
Wouldn’t it be nice if decisions about security were handled in a targets, while more than 48 percent of attacks from Brazil —
voluntary rather than a coercive environment? With airlines providing No. 3 on the hit list — were directed at government. This
choice to consumers about security and privacy trade-offs? As it is, with makes it unlikely that China is specifically targeting
government-run airline security, all will have to abide by the choices of government systems.
the group that “wins” the debate.
Compromised computers that are the apparent source of
attacks often are controlled from elsewhere, and an attack
apparently emanating from China does not necessarily mean
FISCALLY CONSERVATIVE BLOG FEEDS that the Chinese government, or even anyone in China, is
behind it. Attribution of attacks is notoriously difficult, and
Fact-Checking “Cyberwar” [Cato statistics do not necessarily indicate that the United States is
under cyberattack by China. In fact, the United States ranked
at Liberty“Cyberwar”] second in origin of government attacks in 2009, accounting
APR 26, 2010 10:20A.M. for 11 percent.

By Jim Harper (Symantec is a vendor to governments, so naturally prone to threat

inflation itself. GCN reporter William Jackson deserves credit for the
Wired’s Ryan Singel has given a read to Cyberwar, the new cybersecurity sobriety of the story.)
book by Richard Clarke and Robert Knake. (I picked out a potential
example of actual cyberwarfare in a Glenn Reynolds review of the book Cybersecurity-related fearmongering could drive unnecessary dischord
last week.) between the United States and China, leading to actual conflict where
none is warranted. Singel again:
Singel—a journalist who has been a sophisticated reporter of computer
security issues for years now—is not impressed with the book or the [A]rtists of exaggeration . . . seem to think spinning tall tales
reviews it has gotten. In his review, Richard Clarke’s Cyberwar: File is the only way to make bureaucracies move in the right
Under Fiction, he writes: direction. But yelling “Cyberwar” in a crowded internet is not
without consequence. Not only does it promote unnecessary
So much of Clarke’s evidence is either easily debunked with a fear, it feeds the forces of parochial nationalism and
Google search, or so defies common sense, that you’d think militarism — undermining a communications system that has
reviewers of the book would dismiss it outright. Instead, they arguably done more to connect the world’s citizens than the
seem content to quote the book liberally and accept his last 50 years of diplomacy.
premise that cyberwar could flatten the United States, and no
one in power cares at all. Of course, the debunking would be
easier if the book had footnotes or endnotes, but neither are
included — Revelation doesn’t need sources.

It’s brief enough, and refreshing enough. I say read the whole thing.

Sober assessments of computer, network, and data security are far less
interesting than the thrillers that would drive Washington policymakers
to overreact. This report in Government Computer News, for example,
relates the findings of a recent Symantec report on threats to

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FISCALLY CONSERVATIVE BLOG FEEDS

Maryland Would Gain $94 FISCALLY CONSERVATIVE BLOG FEEDS

Million From Offshore Drilling The IMF Is Urging

[Americans for Tax Reform] Governments to Impose
APR 26, 2010 09:31A.M.
Regulatory and Tax Cartels to
With Maryland facing a predicted $2.8 billion shortfall and 7.7 percent
unemployment, Americans for Tax Reform continues to urge President Benefit Politicians [Cato at
Obama, Congress, and state elected officials to look towar...
Liberty]
APR 26, 2010 08:31A.M.

FISCALLY CONSERVATIVE BLOG FEEDS By Daniel J. Mitchell

Furor over Government Price fixing is illegal in the private sector, but unfortunately there are no
rules against schemes by politicians to create oligopolies in order to prop
Employees [Cato at Liberty] up bad government policy. The latest example comes from the
APR 26, 2010 09:08A.M. bureaucrats at the International Monetary Fund, who are conspiring
with national governments to impose higher taxes and regulations on the
By David Boaz banking sector. The pampered bureaucrats at the IMF (who get tax-free
salaries while advocating higher taxes on the rest of us) say these policies
Concern about the pay, benefits, and performance of government are needed because of bailouts, yet such an approach would
employees seems to be growing. Chris Edwards’s articles on how institutionalize moral hazard by exacerbating the government-created
government pay is outpacing private-sector pay have generated media problem of “too big to fail.”
attention, cartoons, and angry rebuttals from the head of the
federal Office of Personnel Management. Steven Greenhut has a new But what is particularly disturbing about the latest IMF scheme is that
book, Plunder! How Public Employee Unions Are Raiding Treasuries, the international bureaucracy wants to coerce all nations into imposing
Controlling Our Lives and Bankrupting the Nation, and is writing lots of high taxes and excessive regulation. The bureaucrats realize that if some
newspaper articles on the high costs of government unions, also the topic nations are allowed to have free markets, jobs and investment would
of a recent Cato Policy Analysis. New Jersey unions are not finding much flow to those countries and expose the foolishness of the bad policy being
sympathy as they try to hold on to their raises, benefits, pensions, and advocated elsewhere by the IMF. Here’s a brief excerpt from a report in
work rules in the face of Gov. Chris Christie’s attempt to cut the budget. the Wall Street Journal:
Liberal journalist Mickey Kaus is running for the U.S. Senate, trying to
warn California’s voters and the Democratic Party about the excessive Mr. Strauss-Kahn said there was broad agreement on the
power and destructive influence of public employee unions. need for consensus and coordination in the reform of the
global financial sector. “Even if they don’t follow exactly the
And now Saturday Night Live. The zeitgeist-riding comedy show had a same rule, they have to follow rules which will not be in
truly harsh sketch this weekend about the “Public Employee of the Year conflict,” he said. He said there were still major differences of
Awards.” It touched every element of popular resentment toward opinion on how to proceed, saying that countries whose
government workers: “people with government jobs are just like workers banking systems didn’t need taxpayer bailouts weren’t willing
everywhere – except for the lifetime job security, guaranteed annual to impose extra taxation on their banks now, to create a
raises, early retirement on generous pensions, and full medical coverage cushion against further financial shocks. …Mr. Strauss-Kahn
with no deductibles, office visit fees, or copayments” — “retirement on said the overriding goal was to prevent “regulatory
full disability” by an obviously young and healthy worker — “Surliest and arbitrage”—the migration of banks to places where the
Least Cooperative State Employee” — “3200 hours [a year] on the job, all burden of tax and regulation is lightest. He said countries
of it overtime” — New York school janitors living in Florida — employees with tighter regulation of banks might be able to justify not
with two current jobs and full disability — an entire workday at the DMV imposing new taxes.
without serving a single customer — no-work contracts – surprisingly
early closings — and “he’s on break.” I’ve been annoyingly repetitious on the importance of making
governments compete with each other, largely because the evidence
Time for unions to start worrying? showing that jurisdictional rivalry is a very effective force for good policy
around the world. I’ve done videos showing the benefits of tax

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competition, videos making the economic and moral case for tax havens,
and videos exposing the myths and demagoguery of those who want to
undermine tax competition. I’ve traveled around the world to fight the
international bureaucracies, and even been threatened with arrest for
helping low-tax nations resist being bullied by high-tax nations. Simply
stated, we need jurisdictional competition so that politicians know that
taxpayers can escape fiscal oppression. In the absence of external
competition, politicians are like fiscal alcoholics who are unable to resist
the temptation to over-tax and over-spend.

This is why the IMF’s new scheme should be rejected. It is not the job of
international bureaucracies to interfere with the sovereign right of
nations to determine their own tax and regulatory policies. If France and
Germany want to adopt statist policies, they should have that right.
Heck, Obama wants America to make similar mistakes. But Hong Kong,
Switzerland, the Cayman Islands, and other market-oriented
jurisdictions should not be coerced into adopting the same misguided
policies.