Immigration law is second in complexity only to the income tax. In a new CEI paper, Policy Analyst Alex Nowrasteh proposes scrapping the whole thing and replacing it with a tariff. This is a much more humane approach to immigration, and in many cases will be less expensive for immigrants than the lawyers and fees they currently have to pay while they live in legal limbo. A tariff would also reduce illegal immigration by eliminating black markets. Money that currently goes to illegal smugglers and human traffickers could instead go to the U.S. Treasury. The idea can appeal to both the left and the right.
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Some liberals have the unrealistic fantasy that by increasing taxes on the top one percent of the population, the government can finance a radically expanded welfare state for the bottom 99 percent. (Never mind that even if we confiscated the entire annual income of the top one percent, it wouldn’t begin to cover the record, trillion-dollar federal budget deficit.) They assume that somewhere in Europe, there is a country that does just that, without harming its economy. Alas, there is no such country, anymore than unicorns exist.
As Veronique de Rugy of the Mercatus Center recently noted, the U.S. already has a more progressive tax code than most European countries:
The richest 10 percent of U.S. households (those making $112,124 or more) contribute a greater share of taxes (45.1 percent of all income taxes) than their counterparts in any other industrialized nation.
Meanwhile, the average tax burden for the top 10 percent of households in OECD countries is 31.6 percent of the revenue collected, well below the percentage in America.
Interestingly, in France, a notorious welfare-state government, only 28 percent of revenue comes from the top 10 percent of income earners. As for the top 1 percent of Americans, their share of federal taxes paid is roughly 30 percent.
Recently retired Justice John Paul Stevens, who became the leader of the Supreme Court’s liberal bloc in his later years on the Court, complained recently about the 1964 Civil Rights Act, which he claimed was “poorly-considered” because its text literally forbids all racial discrimination — including against white people — and contains no exceptions. Justice Ruth Bader Ginsburg, a sitting Supreme Court Justice appointed by Bill Clinton, recently advised Egypt not to model its constitution on the U.S. Constitution, but rather on documents like the South African Constitution that provide less protection for free speech and civil liberties. “I would not look to the US Constitution if I were drafting a Constitution in the year 2012,” she said.
Justice Stevens’ remarks reflect his discontent with the fact that whites occasionally win racial discrimination cases under the Constitution and civil-rights laws. The Supreme Court initially held that racial discrimination of all kinds was prohibited by the 1964 Civil Rights Act in its unanimous 1976 decision in the McDonald case, which ruled in favor of whites who had been fired; but later on, the Court judicially created an exception to the statute in order to allow some discrimination against whites in its Weber decision, which admitted that creating such an exception contradicted the plain language of the Civil Rights Act, but claimed that doing so would lead to a more egalitarian society. Later, the Supreme Court extended this exception to uphold a college admissions policy that discriminated against both whites and Asians in the name of “diversity,” rejecting legal challenges under both the Constitution and the Civil Rights Act (in the Grutter case). However, over Justice Stevens’ objections, it struck down another college admissions policy that the Court viewed as using race too much and too mechanically (in the Gratz case), and it also invalidated racial discrimination against whites in voting, once again over Justice Stevens’ objections (in Rice v. Cayetano).
As an article in the Financial Post noted, if Mitt Romney were Canadian, he’d pay less tax than he does in America.
That’s because most of Mitt Romney’s income is from investments. Much of the world taxes investment income far less than the U.S. does, while taxing consumption more, through a Value Added Tax (VAT). Those countries are more generous to savers, unlike our tax code, which favors spenders.
The belief that the richest 1 percent in Europe and Canada subsidize all of the other 99% is a common delusion on the American Left. It’s the basis for their fantasy that vast new government programs can be paid for simply by taxing the rich. But as Romney’s situation shows, it has no basis in reality.
Europe and Canada finance their more extensive welfare states heavily through VATs, taxes paid mostly by the middle and working classes, since VATs tax consumption, and lower-income people spend a higher percentage of their income than rich people do. Those countries don’t force rich people to pay 90 percent tax rates, as some Democratic lawmakers, like Congressman Jerry McNerney, have recently advocated.
They don’t attempt to tax even wealthy people’s investment income at confiscatory rates, because they have learned from painful experience that doing so discourages people from saving money or starting a business, and lowers investment and economic growth.
“After spending $55 million of a $118.5 million grant from” the U.S. “Department of Energy, Ener1, an Indianapolis-based maker of batteries,” has just “declared bankruptcy.”
The White House had enthusiastically touted the company, which gave rise to an embarrassing gaffe by Vice President Biden:
Vice President Biden visited Ener1 one year ago, January 26, 2011. . .On several occasions, Biden called the company “Enron one” during his visit, invoking a seemingly unintentional but ultimately prescient reference to the collapse of the energy giant Enron. The company was also ranked number 67 in the White House Report: 100 Recovery Projects that are Changing America.
To some, the bankrupt firm is a “candidate in the increasingly competitive race to become the Next Solyndra.” But in reality, several other recipients of green-jobs subsidies under the stimulus package have already gone broke. CBS News had earlier reported that there were 11 Solyndras — that is, financially-troubled recipients of green-jobs subsidies, five of which had already filed for bankruptcy. After the CBS News report, Evergreen Energy, another green-jobs recipient, filed for bankruptcy.
American Europhiles love to make comparisons between the entire United States and the rich Nordic countries in order to advocate America’s “Europeanization.” But comparing these two is deceiving. I explain why below in a letter I wrote to The New York Times.
To the Editor:
In “Why is Europe a Dirty Word?” (Jan. 14), Mr. Kristof claims that US emulation of Europe is not such a bad idea, holding up Norway’s higher GDP per capita as an example why.But Norway’s wealth stems from its enormous natural resources in the North Sea—not its “superior” economic system. I suppose Mr. Kristof would also idolize Qatar—the richest country in the world per capita. Never mind its complete dependence on oil and gas reserves.
It is also not fair to compare a small homogenous country like Norway—a pocket of wealth in Europe—to the entire economically and demographically diverse United States. When compared to similar areas in America, like Connecticut, Norway’s GDP per capita pales in comparison.
The US and Norway are not like-for-like comparisons.
MATTHEW MELCHIORRE
Washington, Jan. 17, 2011The writer is an Adjunct Analyst at the Competitive Enterprise Institute.
President Obama has spent billions of dollars in taxpayer money on subsidizing foreign firms through his failed “green energy” programs, so it was ironic and hypocritical when he attacked outsourcing in his State of the Union address. As former congressional economist Chris Edwards notes, Obama made many blatantly false claims about outsourcing and corporate taxation in his speech. Here are just a few:
Claim: “Right now, companies get tax breaks for moving jobs and profits overseas.”
False: There are no such breaks. Instead, we punish U.S. and foreign businesses for investing and creating jobs here.
Claim: “If you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it.”
False: There is no such tax deduction. . .
Claim: “From now on, every multinational company should have to pay a basic minimum tax.”
False: We’ve already got a corporate “alternative minimum tax,” and it’s an idiotic waste of accounting resources that ought to be repealed.
Claim: “It is time to stop rewarding businesses that ship jobs overseas.”
False: We penalize them for locating jobs here. Besides, the overseas operations of U.S. companies generally complement domestic jobs by boosting U.S. exports.
Claim: “Companies that choose to stay in America get hit with one of the highest tax rates in the world.”
True: Our rate is 40 percent, which compares to the global average rate of just 23 percent.
In a truly excellent column for the Financial Times today, John Kay lays out in a few hundred words a clear defense of the market economy against central planning. What I like most about it is that he tackles the question of “greed” (these days, it seems, the only deadly sin) head on:
The difference between North Korea and the US is not that one society offers more scope for greed than the other. In both countries, as in many others, there are greedy people and many who are not, and those who are greedy are disproportionately represented in the controlling elite. The difference lies in the channels of greed – the degree to which the quest for profit is directed towards the creation of new wealth rather than the appropriation of wealth already created by other people.
A successful market economy emphasises the former and restricts the latter through rules and institutions, in a structure that has evolved slowly and requires constant defence against those who would use economic and political power to subvert it. Success or failure in that endeavour is the central explanation for why some societies are rich and others poor. Crony capitalism is very different from the market economy.
The point about institutions is important. Law and regulation alone cannot sustain a market economy, and indeed too often send an economy down the road to central planning. The institutions of liberty such as the rule of law, due process, high trust (lack of corruption, confidence in institutions, and so on), and lack of regulatory barriers to innovation are all necessary for a market economy to flourish.
Crony capitalism offends these institutions. Kay’s piece should be required reading for Occupy Wall Street demonstrators — and for presidential candidates.
For over a year, there has been concern that the White House would sign an executive order requiring U.S. space activities to adhere to the so-called EU Code of Conduct for space. As I explained at PJMedia a few months ago:
Historically the U.S., and particularly the Department of Defense, has opposed any treaty banning space weapons, for two reasons. First, there is no current perceived threat of in-space weapons or space-to-ground weapons and hence, no need for such a treaty. Second, co-orbital, direct-launch, or directed-energy anti-satellite technology is so inherently dual-use that it would be unenforceable. For instance, as we saw with the collision in 2009, any satellite can be a weapon, if put on a collision course with another. And as always, such a treaty would have asymmetrical effects, restraining the US while allowing cheating by others. There is also concern that it could establish a precedent for expansion of the principles into other media (e.g., air power).
In addition to this, it could make life more difficult for commercial space enterprises. For instance, the enhanced notification requirements will impose additional costs on launch and orbital operations. Beyond that, the Russians reportedly made noise at the UN in Geneva (home of the Office of Outer Space Affairs) a couple weeks ago that they want the Code to embrace their proposed “transparency and confidence building measures.” These would require all satellites, rockets, and mating procedures to be inspected prior to launch, by “international observers.” This would in effect require American commercial operators to allow foreign nationals in their operations and manufacturing flows, thus putting their intellectual property at risk not just to their home-grown competitors, but to potentially hostile states.
Immigration Policy Analyst Alex Nowrasteh tells Jakadrien Turner‘s story and what it means for the immigration reform debate. Turner is a 14-year-old girl from Texas who was mistakenly deported to Colombia. Turner is not Hispanic, does not speak Spanish, and has no connections to Colombia whatsoever. It took six months of pleading and legal maneuvering before authorities allowed her to return home. This was not an isolated incident. The way to prevent future cases like this, Nowrasteh argues, is radically simplifying our overly complex immigration and citizenship laws.
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