Quotulatiousness

May 4, 2013

Ron Paul on the so-called “Marketplace Fairness Act”

Filed under: Business, Economics, Government, USA — Tags: , , , , , , — Nicholas @ 09:28

As you probably guessed, he’s against it:

David French, Senior Vice President of the National Retail Federation, the major industry group lobbying for the so-called “Marketplace Fairness Act,” (more aptly named the “National Internet Tax Mandate”) recently commented that “…the law [governing Internet sales] today is a 20th-century interpretation of an 18th-century document…” Mr. French’s comments are typical of those wishing to expand government power beyond the limits established by the United States Constitution.

[. . .]

The National Internet Tax Mandate overturns the Supreme Court’s 1992 Quill v. North Dakota decision that states can only force businesses to collect sales tax if the business has a “physical presence” in the state. Quill represented a rare instance where the Supreme Court properly interpreted the Commerce Clause. Thanks to the Quill decision, the Internet has remained a tax-free zone, though some states require consumers to later pay taxes on products they purchased online. This freedom has helped turn the Internet into a thriving and dynamic sector of the economy, to the benefit of entrepreneurs and consumers.

Now that status is threatened by an alliance of big business and tax-hungry state governments seeking new powers to force out-of-state business to collect state sales taxes. Far from updating the Constitution to fit the needs of the 21st century, the National Internet Tax Mandate is a throwback to 18th century mercantilism.

The National Internet Tax Mandate will raise the costs of doing business over the Internet. Large, established Internet companies, such as Amazon, can absorb these costs, whereas their smaller competitors cannot. More importantly, the Mandate’s increased costs and regulations could prevent the creation and growth of the next Amazon.

April 25, 2013

Populist talk on taxes may please the voters (sometimes), but it won’t help the economy

Filed under: Cancon, Economics, Government, Politics — Tags: , , — Nicholas @ 00:01

In Maclean’s, Stephen Gordon explains why the only kind of tax hikes that seem in any way “popular” are particularly bad if implemented:

Magical thinking might be smart politics, but it’s not very good economics. Here are the two most popular themes:

  1. Higher corporate income taxes. From a political marketing point of view, the appeal of increasing corporate income tax (CIT) rates is obvious: “Hey, I’m not a corporation, so it’s no skin off my nose.” But the economics of CIT rates are very dodgy indeed: higher CIT rates are the most costly way of generating revenue and are most harmful to economic growth. It also turns out that workers and consumers are the ones who ultimately bear the burden of higher CIT rates. (If you start taxing corporate profits, shareholders will eventually move their money to jurisdictions with more competitive rates, reducing the availability of investment capital. In the long-run, that results in lower output and weaker labour demand. More on that here.) But even if you were willing to pay these costs, higher CIT rates don’t generate much in the way of new revenues.
  2. Increased taxes on high earners. While there may be good reasons for wanting to use the personal income tax system to counter recent trends in the concentration of income, policymakers should be under no illusions about how much new revenue taxing the rich will bring in. There simply aren’t that many high earners to tax, and they have access to expert tax planning advice: there is overwhelming evidence showing that those with high incomes can and will respond to higher tax rates by reporting lower taxable income.

March 11, 2013

Science fiction’s blindspot on the looming corporate menace of the future

Filed under: Business, Media — Tags: , , , , — Nicholas @ 10:36

Kevin Williamson wonders why the dystopic corporate giant of so many science fiction books and movies doesn’t seem to be getting any closer to reality:

That the future will be dominated by amoral international (or interstellar) corporations is a constant theme of science fiction and, not unrelatedly, of progressive political thought. The rogues’ gallery includes Cyberdyne Systems (Terminator), Weyland-Yutani (Alien), Omni Consumer Products (Robocop), and Charlton Heston’s friends at Soylent Inc. The gold standard of the genre is the Tyrel Corporation, from Ridley Scott’s 1982 film Blade Runner, an adaptation of Philip K. Dick’s 1968 novel, Do Androids Dream of Electric Sheep?. The film, which is indisputably a visual masterpiece, is much heavier on the theme of corporate dominance than the novel is, which is strange: The corporation of 1982 was a smaller and weaker thing than the corporation of 1968.

At its best, science fiction imagines a future that illuminates the present, but on the subject of the social role of the corporation, science fiction has long been backward-looking, out of touch with the reality it would analyze. The cultural imagination at large shares this error, though it is difficult to say how much this defect in science fiction is a result of the cultural error and how much it is the cause. But it would be difficult to overstate how deeply the specter of the villainous corporation shapes American political thought. The influence is more visible the farther to the left one moves along the political spectrum. Occupy Wall Street was probably at least as much influenced by science-fiction visions of corporate dystopias as it was by any kind of organized political thought. There were unmistakably Maoist elements to Occupy, but the sinister connotations of the very word “corporation” are by no means heard by only those ears attached to the addled heads of committed leftists.

Do Androids Dream of Electric Sheep? was set in 1992, Blade Runner in 2019, yet here we are, well into the 21st century, and there is still no colossal Tyrel Corporation bestriding the globe, and nothing like the corporate sovereignties of Jennifer Government. As myth, the corporate dystopia remains undiminished in its power. But the function of myths is to illuminate reality, and the reality is that there is no Tyrel Corporation today, and none on the horizon. If you want to know what the corporation of tomorrow looks like, don’t think Cyberdyne — think Groupon.

You would not know it from reading fiction, speaking with Occupy types, or listening to the speeches at the Democratic National Convention, but the corporation as we know it is in decline: The average size of a corporation as measured by personnel has been diminishing since 1975. In 1955 the largest U.S. company, General Motors, employed 576,000 people out of a U.S. population of 166 million; today Exxon Mobil, the largest U.S. company, employs only 82,000 people. Microsoft employs fewer than 100,000 people worldwide; Google employs about 54,000, and Facebook fewer than 6,000.

January 11, 2013

In praise of mergers and takeovers

Filed under: Business, Economics — Tags: , , , — Nicholas @ 11:15

In The Register, Tim Worstall points out that most mergers lose money, but that they’re good for the economy anyway:

The final one of the four is the vital part that takeovers play in the clean up of the economy’s failures. Take a company that goes bust. The whole point of bankruptcy proceedings is to make sure that its assets aren’t then left, orphaned, or chained to an unpayable debt. The idea is to get them off into someone else’s hands where they might be put to good use. This is true of contracts, or the workforce, of the land and any other asset. It might be that the machinery is worth most as scrap. Or the factory is worth most as a supermarket. Or it could be that the OS coders and their desks would be best put to writing games: but under different management.

And it’s this last part of the whole system that our economists think is the most important. When failure happens, the vital thing is to clean up the mess and quickly. Don’t leave potentially useful assets orphaned but auction them off and get them working again. The price that is realised doesn’t matter very much at all: from the view of the entire economy, getting people and assets back to work pronto is the vital part. So important is this that we’re urged to overlook all of the above problems with takeovers and mergers to allow this part of it to function as efficiently as possible.

Yes, most takeovers lose money for the shareholders of the company doing the buying. This is often because the interests of the management diverge from those of those owners. Similarly, many companies are kept running longer than they should be for those selfish management reasons. But we put up with all of that (although try to constrain it) so that the scavenging upon the assets of the bankrupt can be as efficient as possible. For this is the very heart of the success of capitalism: Not how the successful make profits, but how the system deals quickly and cleanly with failure.

December 12, 2012

“Big Food” is killing us!

Filed under: Cancon, Health, Media, Science — Tags: , , , , , — Nicholas @ 09:59

At sp!ked, Rob Lyons debunks a recent video by Canadian anti-corporate activist Dr. Yoni Freedhoff:

This is a handy menu of food-related government intervention that is trotted out all the time by food crusaders everywhere. But before we get to those interventions, maybe we should ask how we got here in the first place.

First, food got cheaper while, on average, we’ve been generally getting richer. In particular, if America is anything to go by, we spent less as a proportion of income on meat and dairy products — surprisingly, spending on fruit and veg has been pretty constant — and more on processed foods and sweets. In other words, we bought convenience with the money we were saving.

Second, suppliers and retailers realised that as food got cheaper, the way to make money was to ‘add value’ — in other words, take basic ingredients and make them more convenient, more ‘fun’, more ‘premium’ or to appeal to some other psychological need. Yes, food manufacturers are as capable of bullshitting as anybody else with something to sell.

One of the other ways that suppliers add value is to make ‘healthy’ products. But who set up those health claims in the first place? It was the media, the medical profession and, most of all, governments. Who said we should be stuffing our faces with fruit to get our ‘five a day’? Who suggested that we get more omega-3s? Who said we should aim to eat low-fat diets? All of these ideas got the big official stamp of approval. And in the spirit of convenience, the food industry has made it easy, for better or for worse, to meet these official goals.

[. . .]

Moreover, what about the wild claims made for organic food? It has a completely spurious image as natural and wholesome, but study after study finds no consistent difference between organic foods and conventional foods — apart from the price. Yet it is often the most vociferously anti-Big Food campaigners, bloggers and ‘experts’ who push organic as the healthy alternative.

[. . .]

Rather than endless calls for regulations, bans and taxes — whose efficacy is doubtful but whose effect on personal autonomy would be substantial — it would be far better to recognise that any diet with some modicum of balance will be fine for most people, who will live to a greater age than their parents or grandparents, on average, no matter how much disapproved food they consume. Claims that any particular food is some dietary panacea should be treated with a large, metaphorical pinch of salt, whoever makes them, whether they are an evil mega corporation or the bloke behind the counter at the health-food shop.

Above all, a similarly healthy scepticism should be applied to crusading medics who want to scare us with the idea that Big Food is out to kill us and who encourage politicians to regulate what we eat.

November 23, 2012

Google the latest whipping boy in Australia over taxation

Filed under: Business, Europe, Government, Law — Tags: , , , , , — Nicholas @ 09:53

Even if you scrupulously obey the multiple jurisdictional laws to legally minimize the amount of tax you pay, politicians can’t resist the opportunity to pillory you for not paying your “fair share”:

The Minister’s explanation of Google’s tax affairs is as follows:

    “While the day-to-day dealings of Australian firms advertising on Google might be with Google Australia, under the fine print of contracts Australian firms sign with Google, they are actually buying their advertising from an Irish subsidiary of Google.

    It is then argued that the source of this income — and therefore the taxing rights under our tax treaty — would be with Ireland rather than Australia. Despite Ireland’s relatively low company tax rate of 12.5 per cent, we have just started to build the sandwich.

    The next step is to route a royalty payment from the Irish operating subsidiary of Google to a Dutch subsidiary of Google, which is then paid back to a second Irish holding company subsidiary of Google that is controlled in Bermuda, which has no corporate tax.

    The first Irish subsidiary receives a tax deduction for the royalty payment to the Dutch subsidiary, substantially reducing the income subject to the 12.5 per cent Irish company tax rate.

    Under Dutch law, and because EU member countries do not charge withholding taxes on transfers within the EU, the transfers to and from the Netherlands are essentially tax free.

    And under Irish tax law, the second Irish resident subsidiary is not taxed on the royalty payment because it is controlled by managers elsewhere.

    The profits from the sale of advertising to an Australian firm then sit in a tax-free jurisdiction — possibly indefinitely.”

Tax lawyers — especially those who work on multinational levels — don’t create these situations out of whole cloth: it’s the politicians and revenue ministries that set up and maintain the tax rules. Corporations are legally required to pay taxes (as are individuals), but corporations are also legally required to conduct themselves in ways that maximize the profits for their shareholders. Finding ways to legally pay tax at a lower rate is a requirement. That companies like Apple and Google are big enough to take advantage of the “loopholes” deliberately created by the tax authorities is not a reason to bash Apple or Google. They can only take advantage of “loopholes” because this or that government tried to rig the system in a particular way. Changing or threatening to change the rules retrospectively is a really good way to indicate to foreign business that you really don’t want them operating in your territory.

Update: Snigger.

October 10, 2012

Is “national security” just another term for “protectionism”

Filed under: Business, Cancon, China, Government, Technology — Tags: , , , — Nicholas @ 10:16

Daniel Ikenson at the Cato@Liberty blog:

Chinese telecommunications companies Huawei and ZTE long have been in the crosshairs of U.S. policymakers. Rumors that the telecoms are or could become conduits for Chinese government-sponsored cyber espionage or cyber attacks on so-called critical infrastructure in the United States have been swirling around Washington for a few years. Concerns about Huawei’s alleged ties to the People’s Liberation Army were plausible enough to cause the U.S. Committee on Foreign Investment in the United States (CFIUS) to recommend that President Bush block a proposed acquisition by Huawei of 3Com in 2008. Subsequent attempts by Huawei to expand in the United States have also failed for similar reasons, and because of Huawei’s ham-fisted, amateurish public relations efforts.

So it’s not at all surprising that yesterday the House Permanent Select Committee on Intelligence, yesterday, following a nearly year-long investigation, issued its “Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE,” along with recommendations that U.S. companies avoid doing business with these firms.

But there is no smoking gun in the report, only innuendo sold as something more definitive. The most damning evidence against Huawei and ZTE is that the companies were evasive or incomplete when it came to providing answers to questions that would have revealed strategic information that the companies understandably might not want to share with U.S. policymakers, who may have the interests of their own favored U.S. telecoms in mind.

It’s not just the United States, either: Canada is also getting wary of Huawei.

The Canadian government has said that it will be invoking a “national security exemption” as it hires firms to build a secure network, hinting that Chinese telco Huawei could be excluded.

The exemption allows the government to kick out of the running any companies or nations considered a security risk, which coming in the wake of the US report earlier this week labelling Huawei and ZTE as security threats, strongly indicates they’re out of the bidding.

Prime Minister Stephen Harper’s top media spokesman refused to say for sure whether the government had Huawei in mind when invoking the exemption.

“The government is going to be choosing carefully in the construction of this network and it has invoked the national security exception for the building of this network,” he said, according to the Calgary Herald.

October 4, 2012

Why EU politicians love the idea of a Financial Transaction Tax

Filed under: Economics, Europe — Tags: , , — Nicholas @ 10:31

Tim Worstall explains why politicians love the notion of an FTT, and why all the benefits claimed for imposing an FTT are not going to happen:

Large numbers of people have convinced themselves that a Financial Transactions Tax (FTT) would be a really very good idea indeed. It would make the banks pay for the problems they’ve caused, it would lower speculation and thus lower volatility, it would raise a lovely large amount of money that can be spent on good causes and anyway, there are a number of FTTs around and they’ve not caused any problems, have they?

Politically this is of course quite wonderful. Lots of money to pay for things and it’s the banks that have to cough up? We’ll get tens, no hundreds of billions and none of us will really have to pay any of it? Let’s tax the other guy usually does gain public support after all.

The thing is, all of the stated joys of this tax are in fact untrue. I’m rather involved in this as I prepared evidence for the House of Lords on the point (evidence which I’m glad to say heavily influenced their final report). Other submissions also pointed to posts on this very blog here at Forbes in support of various points. Finally, this formed the basis of my one and only peer reviewed paper to date. You might say that I’m more involved in this story than I am in most.

The thing is, those four things which campaigners for the FTT say are the good things about it all turn out to be untrue. Firstly and most obviously, banks are companies and companies never pay tax. It’s always some combination of customers, workers and shareholders who do: for only a real human being can bear the burden of a tax. As to speculation, more speculation lowers price volatility so reducing speculation will increase volatility, not reduce it. An FTT would crimp economic growth and thus would reduce total tax revenue, not increase it and finally, we do indeed have several FTTs currently and also know that they crimp economic growth and thus reduce total tax revenue.

All of these things have been explained by all of the serious people (plus me, who you can regard as serious or not as you wish) who have looked at the question. And yet governments continue to sign up for what they keep being told is a seriously bad idea. They’ve even been told this in terms simple enough for a politician to understand.

September 23, 2012

Canada is open for (shady) business

Filed under: Business, Cancon, Law — Tags: , , , — Nicholas @ 10:03

The Economist looks at the relative level of difficulty in setting up a shell corporation in various jurisdictions and how easy it is to create an untraceable shell:

Shell companies — which exist on paper only, with no real employees or offices — have legitimate uses. But the untraceable shell also happens to be the vehicle of choice for money launderers, bribe givers and takers, sanctions busters, tax evaders and financiers of terrorism. The trail has gone cold in many a criminal probe because law enforcers were unable to pierce a shell’s corporate veil.

The international standard governing shells, set by the inter-governmental Financial Action Task Force (FATF), is clear-cut. It says countries should take all necessary measures to prevent their misuse, such as ensuring that accurate information on the real (or “beneficial”) owner is available to “competent authorities”. More than 180 countries have pledged to follow it. A study* scrutinises the level of compliance worldwide. The results are depressing.

Posing as consultants, the authors asked 3,700 incorporation agents in 182 countries to form companies for them. Overall, 48% of the agents who replied failed to ask for proper identification; almost half of these did not want any documents at all. Contrary to conventional wisdom, providers in tax havens, such as Jersey and the Cayman Islands, were much more likely to comply with the standards than those from the OECD, a club of mostly rich countries. Even poor countries had a better compliance rate, suggesting the problem in the rich world is not cost but unwillingness to follow the rules (see chart). Only ten out of 1,722 providers in America required notarised documents in line with the FATF standard.

September 17, 2012

The chilling of free speech: corporate defamation suits

Filed under: Business, Cancon, Law — Tags: , , , , — Nicholas @ 13:07

An interesting article in the Toronto Star looks at the idea of reducing the ability of corporations to launch SLAPP lawsuits against private citizens:

Fed up with suits like this (sometimes called Strategic Lawsuits Against Public Participation, or SLAPPs), Australia changed its laws to prevent most corporations from being able to sue for defamation. Canada’s provinces should do the same.

Canada is no stranger to SLAPPs. For example, when Mark Prince created a website inviting people to describe their customer service experiences with Future Shop, he was threatened with a defamation suit. On the advice of a lawyer, Prince shut the site down. It wasn’t that what he’d done was necessarily defamation, but it would simply have cost too much to defend himself.

Cases like this highlight the fact that defamation is easy to allege and hard to defend. Those who claim to have been defamed need only prove that the defendant published something about them to at least one other person, and that a reasonable person would think less of them as a result. Plaintiffs do not have to prove they suffered any actual loss to their reputation, or that the statement was false. Instead much of the burden falls to defendants to prove a defence, such as that the statement was true.

As a result, most people will retract or apologize, even if a statement is true, rather than spend a small fortune defending their right to say it. This chilling effect doesn’t only affect individuals; the news media’s publishing decisions are also influenced by defamation law.

H/T to Bob Tarantino for the link:

August 21, 2012

The 21st century equivalent to the enclosure movement

Filed under: Africa, Americas, Asia, Government, Liberty — Tags: , , , , — Nicholas @ 10:07

Joseph R. Stromberg reviews The Land Grabbers: The New Fight over Who Owns the Earth, by Fred Pearce.

The Land Grabbers is a wonderful primer on the newest manifestations of an ancient form of plunder: the seizure of other people’s resources and destruction of their livelihoods. The author, Fred Pearce, is a well-established British environmental journalist. Here he surveys the ongoing alienation of allegedly “unused” or “underused” land in Africa, Latin America, East Asia, Russia, Ukraine, Georgia, Australia, and elsewhere at the hands of international corporations, both private and state-owned. Politicians in the affected countries are key partners in operations that resemble the late-19th-century scramble for control of Africa. The land grabs aim at enriching privileged companies and their political allies, usually at the expense of those already on the land. States, companies, and their frequent close friend, the World Bank, see no reason to respect sitting owners and resource users, whatever their rights under customary law and (sometimes) postcolonial statutes. Pastoral nomads get even less respect. In Tanzania, for example, governments and safari capitalists have reduced the traditional grazing lands of the Maasai herdsmen to a fraction of what they were. And in Ethiopia, the government’s “villagization” policy, Pearce writes, resettles peasant farmers “in the manner of Stalin, Mao, and Pol Pot,” clearing the way for deals with foreign capital.

Where agriculture is concerned, the effort goes forth under an ideology that claims that only industrial-scale farming, modeled on subsidized American agribusiness, can feed the world. The ideologues in question include John Beddington, chief UK government scientist; Paul Collier, former research head at the World Bank; and Richard Ferguson of the investment company Renaissance Capital, who hopes to see “industrial-sized farms of a million hectares.” To realize that vision, smallholders, hunters, gatherers, and pastoralists must get out of the way and submit themselves to wage-labor, wherever they find it. The ideology goes hand in hand with the form of globalization that relies on the power of the United States and some associated countries to dictate the contours of world trade. While the U.S. has toppled states seen as hostile to American business interests (as in Guatemala in 1954), today’s methods are often more subtle. They include USAID programs, American domination of World Bank policies, and a web of treaty obligations, especially international investment agreements.

Pearce is an environmentalist, but his book is not especially ideological. He’s more interested in presenting data. Wherever possible he has figures for acreage (or hectares) and tells us who did what to whom and where. He also faults wealthy environmental idealists and NGOs, noting that their parks and preserves can displace local people and their property, just like commercial hunting preserves, sugar plantations, logging operations, and the rest can.

May 6, 2012

The free speech baby with the Citizens United bathwater

Filed under: Government, Law, Liberty, Media, USA — Tags: , , , , , , — Nicholas @ 10:32

George Will on the rather impressive sweep of a new proposal to circumvent the US Supreme Court’s decision in Citizens United:

Now comes Rep. Jim McGovern, D-Mass., with a comparable contribution to another debate, the one concerning government regulation of political speech. Joined by Minority Leader Nancy Pelosi, 26 other Democrats and one Republican, he proposes a constitutional amendment to radically contract First Amendment protections. His purpose is to vastly expand government’s power — i.e., the power of incumbent legislators — to write laws regulating, rationing or even proscribing speech in elections that determine the composition of the legislature and the rest of the government. McGovern’s proposal vindicates those who say most campaign-finance “reforms” are incompatible with the First Amendment.

His “People’s Rights Amendment” declares that the Constitution protects only the rights of “natural persons,” not such persons organized in corporations, and that Congress can impose on corporations whatever restrictions Congress deems “reasonable.” His amendment says it shall not be construed “to limit the people’s rights of freedom of speech, freedom of the press, free exercise of religion, freedom of association and all such other rights of the people, which rights are inalienable.” But the amendment is explicitly designed to deny such rights to natural persons who, exercising their First Amendment right to freedom of association, come together in corporate entities to speak in concert.

McGovern stresses that his amendment decrees that “all corporate entities — for-profit and nonprofit alike” have no constitutional rights. So Congress — and state legislatures and local governments — could regulate to the point of proscription political speech, or any other speech, by the Sierra Club, the National Rifle Association, NARAL Pro-Choice America, or any of the other tens of thousands of nonprofit corporate advocacy groups, including political parties and campaign committees.

Newspapers, magazines, broadcasting entities, online journalism operations — and most religious institutions — are corporate entities. McGovern’s amendment would strip them of all constitutional rights. By doing so, the amendment would empower the government to do much more than proscribe speech. Ilya Somin of George Mason University Law School, writing for the Volokh Conspiracy blog, notes that government, unleashed by McGovern’s amendment, could regulate religious practices at most houses of worship, conduct whatever searches it wants, reasonable or not, of corporate entities, and seize corporate-owned property for whatever it deems public uses — without paying compensation. Yes, McGovern’s scythe would mow down the Fourth and Fifth Amendments, as well as the First.

March 26, 2012

Stephen Gordon: financial headlines you’ll never see

Filed under: Cancon, Economics, Media — Tags: , , , — Nicholas @ 08:00

In the Globe & Mail Economy Lab column, Stephen Gordon points out the monotonous message we get from our financial news sources every time a foreign company buys a Canadian firm:

Here is a headline that will never, ever run over a foreign takeover story: “Foreign buyers taken to cleaners by savvy Canadian investors.”

The reason you will never see that sort of a headline is that all stories in which foreigners buy Canadian-owned assets are based on the assumption that foreign investors are — yet again! — snapping up Canadian-owned assets on the cheap, and why oh why won’t Ottawa intervene and put a stop to it? The notion that Canadian investors are fully capable of assessing the value of their holdings and that they might earn a tidy profit in selling them never seems to make an appearance in these accounts.

March 21, 2012

“Euphemisms, like elevated temperature, are usually a sign of sickness”

Filed under: Bureaucracy, Europe, Government, Liberty — Tags: , , , — Nicholas @ 09:10

George Jonas on the redefinition game, as currently being played in the European Union:

The subject was the justice commissioner’s office beginning a 10-week period of “consultation” with Europe’s publicly listed companies about breaking the “glass ceiling.” That’s the invisible barrier that supposedly keeps women from Big Capital’s boardrooms. Not altogether, of course, but at only 13% not in the volume Ms. Reding thinks right. After 10 weeks, Europe’s companies will either comply “voluntarily” with Ms. Reding’s idea of the correct percentage, or she will start considering “legislative measures.”

[. . .]

After putting discrimination on the basis of sex, race, religion, ethnicity, etc., beyond the pale, the government introduces programs whose specific — indeed, only — aim is to compel discrimination on the very grounds it prohibits. The first casualty is the language; its first symptoms, a rash of euphemisms. Liberal-fascist societies break out in euphemisms faster than you can say “affirmative action.”

Doctors of the body politic — a.k.a. writers — react to euphemisms as medical doctors react to fever. Language strives for accuracy; it has a built-in bias for calling a spade a spade, so hearing something called something else shows up as a tick on the diagnostic chart. Euphemisms, like elevated temperature, are usually a sign of sickness.

This is Stage One. In Stage Two the interventionist state abandons all, or at least some pretense, and admits to doing what it’s doing. It’s feeling strong enough to feel its oats.

The EU is now a Stage Two tyranny. It still has lots of room to grow before it becomes a monster-state, but it has started coming clean.

March 12, 2012

QotD: Corporate income tax rates

Filed under: Cancon, Economics — Tags: , — Nicholas @ 00:05

If you assume that there’s no behavioural response, then each percentage point added to the federal CIT will generate roughly $2b in new revenues. So you’d conclude that the January 1, 2012 reduction in the CIT rate from 16.5% to 15% would reduce revenues by about $3b, and increasing the federal rate from 16.5% back to (say) 24% would increase CIT revenues by some $15b — almost one per cent of GDP.

This is the the sort of answer ‘static analysis’ gives. In a world in which multinationals file 57,000-page tax returns, one can only marvel at the faith in human nature among those who would make policy based on the belief that the only behavioural change on the part of corporations to an increase in CIT rates will be to put larger numbers on the cheques they send to the Receiver-General.

Stephen Gordon, “How much new revenue will be generated by an increase in federal corporate taxes?”, Worthwhile Canadian Initiative, 2012-03-11

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