Globalization and Tax Reform

Despite the recession, globalization continues to exert pressure for beneficial tax reforms. From Tax Notes International today:

Jordanian Finance Minister Bassem al-Salem on April 20 confirmed that the government is working on draft legislation that would cut corporate tax rates drastically, reducing them in some cases by more than half.

Al-Salem said the government will seek to introduce a single 12 percent tax rate for most corporate entities, although companies in the banking, insurance, and mining sectors would pay tax at a rate of 25 percent. The current corporate tax rates range from 15 percent to 35 percent for different profit levels and also differ by business sector.

The draft legislation would also rationalize individual income tax, custom duties, and other taxes to increase efficiency, al-Salem said. Jordan has about 100 different taxes.

Al-Salem said the tax cuts are needed because many countries in the region either don’t have taxes at all or have much lower tax rates than Jordan’s, making them more attractive jurisdictions for investment.

 The full story on taxation and globalization is here.

More on South Carolina School Choice Hearing

State Senator Robert Ford is an African-American, Democratic champion of education tax credits to fund school choice and sponsor of the bill under consideration at this hearing. He has a tendency for quotable lines, and delivered one of my favorite last week.

“For 37 years I lied to myself [about education reform],” Sen. Ford admitted. He’s now determined to shine a light on all of those lies that he swallowed … that the public schools are the only way to help the poor, that we just need one more public school reform and all will be right and good.

Sen. Ford has the courage to admit that he was wrong and face the vicious attacks of his one-time allies for choosing children over public school special interests. And he’s not the type to let go on a matter of justice. I look forward to hearing a lot more from him …

Check in here for updates on school choice in SC and videos from the hearing, and in the meantime, here’s my testimony (speakers were limited to 3 minutes …).

Obama’s Transparency Average Drops

On the campaign trail, President Obama promised to post bills online for five days before signing them.

Last week, President Obama signed three new bills into law. None of them received the promised “Sunlight Before Signing” treatment - at least, not as far as our research reveals. (The White House has yet to establish a uniform place on its Web site where the public can look for bills that the President has received from Congress.)

The new bills put today’s podcast on Obama’s five-day pledge slightly out of date. He is not batting .091 on his transparency pledge. He’s batting .071. The substance of the podcast remains true, however: This is still a worse record than the Nationals.

President Obama waited more than five days to sign two of the three bills he passed into law last week. The simple matter of posting them on Whitehouse.gov would have fulfilled the promise as to those bills - and would have brought his average up to .214.

The current list of new laws, with presentment date and signing date, is after the break.

Public Law Date Presented Date Signed Posted (Linked) for Comment? Five Days?
P.L. 111-2, The Lilly Ledbetter Fair Pay Act of 2009 1/28/2009 1/29/2009 1/29/2009 No
P.L. 111-3, The Children’s Health Insurance Program Reauthorization Act of 2009 2/4/2009 2/4/2009 2/1/2009 No
P.L. 111-4, The DTV Delay Act 2/9/2009 2/11/2009 2/5/2009 Yes and No
P.L. 111-5, The American Recovery and Reinvestment Act of 2009 2/16/2009 2/17/2009 2/13/2009 No
P.L. 111-6, Making further continuing appropriations for fiscal year 2009, and for other purposes 3/6/2009 3/6/2009 No n/a
P.L. 111-7, A bill to designate the facility of the United States Postal Service located at 2105 East Cook Street in Springfield, Illinois, as the “Colonel John H. Wilson, Jr. Post Office Building” 2/26/09 3/9/2009 No n/a
P.L. 111-8, The Omnibus Appropriations Act, 2009 3/11/2009 3/11/2009 3/6/2009 No
P.L. 111-9, To extend certain immigration programs 3/18/2009 3/20/2009 No n/a
P.L. 111-10, To provide for an additional temporary extension of programs under the Small Business Act and the Small Business Investment Act of 1958, and for other purposes 3/19/2009 3/20/2009 No n/a
P.L. 111-11, The Omnibus Public Land Management Act of 2009 3/30/2009 3/30/2009 3/30/2009 No
P.L. 111-12, The Federal Aviation Administration Extension Act of 2009 3/24/2009 3/30/2009 No n/a
P.L. 111-13, The Generations Invigorating Volunteerism and Education Act 4/20/2009 4/21/2009 No n/a
P.L. 111-14, To designate the United States courthouse under construction at 327 South Church Street, Rockford, Illinois, as the “Stanley J. Roszkowski United States Courthouse” 4/14/2009 4/23/2009 No n/a
P.L. 111-15, The Special Inspector General for the Troubled Asset Relief Program Act of 2009 4/14/2009 4/24/2009 No n/a

Obama’s First 100 Days: Mixed Record on Foreign Policy

Cato foreign policy experts weigh in on President Obama’s record in his first 100 days:

Christopher Preble, Director Foreign Policy Studies:

President Obama deserves credit for making a few modest changes in U.S. foreign and defense policy, and he has signaled a desire to make more fundamental shifts in the future. Some of these may prove helpful, while others are likely to encounter problems. In the end, however, so long as the president is unwilling to revisit some of the core assumptions that have guided U.S grand strategy for nearly two decades – chief among these the conceit that the United States is the world’s indispensable nation, and that we must take the lead in resolving all the world’s problems – then he will be unable to effect the broad changes that are truly needed.

Ted Galen Carpenter, Vice President Defense & Foreign Policy Studies; Christopher Preble:

On the plus side, Obama moved quickly to fulfill his most important foreign policy promise: ending the war in Iraq. That said, the policy that his administration will implement is consistent with the agreement that the outgoing Bush administration negotiated with the Iraqis. Given that the war has undermined U.S. security interests, and our continuing presence there is costly and counterproductive, Obama should have proposed to remove U.S. troops on a faster timetable.

Malou Innocent, Foreign Policy Analyst:

The jury is still out on the other major, ongoing military operation, the war in Afghanistan. That mission is directly related to events in neighboring Pakistan, which is serving – and has served – as a safe haven for Taliban supporters for years. President Obama deserves credit for approaching the problem with both countries together, and also in a regional context, which includes Iran, as well as India. Still unknown is the scope and scale of the U.S. commitment. President Obama has approved a nearly 50 percent increase in the number of U.S. military personnel in Afghanistan. Some have suggested that still more troops are needed, and that these additional troop numbers might prevail for 10-15 years. That would be a mistake. The United States should be looking for ways to increase the capacity of both Afghanistan and Pakistan to confront the extremism in their countries, and should not allow either to grow dependent upon U.S. military and financial support.

Christopher Preble and Ted Galen Carpenter:

On Iran, President Obama made the right decision by agreeing to join the P5 + 1 negotiations, but that is only a first step. The two sides are far apart and President Obama has not signaled his intentions if negotiations fail to produce a definitive breakthrough. Sanctions have had a very uneven track record, and are unlikely to succeed in convincing the Iranians to permanently forego uranium enrichment. If the Iranians are intent upon acquiring nuclear weapons, military action would merely delay Iran ’s program, and would serve in the meantime to rally support for an otherwise unpopular clerical regime, and a manifestly incompetent president.

Doug Bandow, Senior Fellow; Christopher Preble:

A related problem is North Korea’s ongoing nuclear program, an area where the president and his team seem to be grasping for answers. President Obama was mistaken if he believed that that the UN Security Council would render a meaningful response to Pyongyang’s provocative missile launch. It was naive, at best, for him to believe that even a strong rebuke from the UNSC would have altered Kim Jong Il’s behavior. The president must directly engage China, the only country with any significant influence over Kim. The North’s reckless and unpredictable behavior does not serve Beijing’s interests.

Benjamin Friedman, Research Fellow; Christopher Preble:

Obama and Defense Secretary Robert Gates are correct to apply greater scrutiny to bloated Pentagon spending, and to terminating unnecessary weapon systems, but the budget will actually grow slightly, at a time when we should be looking for ways to trim spending. If President Obama decided to avoid Iraq-style occupations, we could cut our ground forces in half. If we stopped planning for near-term war with China or Russia, the Air Force and Navy could be much smaller. Unless we commit to a grand strategy of restraint, and encourage other countries to provide for their own defense, it will be impossible to make the large-scale cuts in military spending that are needed.

Jim Harper, Director of Information Policy Studies; Benjamin Friedman; Christopher Preble:

Two other quick points. President Obama has moved away from some of the overheated rhetoric surrounding counterterrorism and homeland security, including dropping the phrase ‘War on Terror”. This was the right approach. The language surrounding the fight against terrorism is as important – if not more important – than the actual fight itself. Equally useful is his pledge to close the detention facility at Guantanamo Bay and his renunciation of the use of torture and other illegal means in the first against al Qaeda. These steps send an important message to audiences outside of the United States who cooperation is essential.

Ian Vasquez, Director, Center for Global Liberty & Prosperity; Juan Carlos Hidalgo, Project Coordinator for Latin America.

President Obama has signaled a slight change on US-Cuba policy by softening some travel and financial restrictions. It is not as far as we would have liked, but it is a step in the right direction – toward greater engagement, as opposed to more isolation, which was the approach adopted by the Bush administration.

For more research, check out Cato’s foreign policy and national security page.

Transparency for Thee but Not for Me

It appears that the Obama administration is high on transparency for everyone but its own allies.  There are a lot of good reasons to reduce federal regulation, but if the Labor Department is going to push coercive unionism, it should require unions to disclose their activities and finances to their members.

Not in today’s world, however.  The Obama administration is moving backwards.  Reports the Washington Times:

The Obama administration, which has boasted about its efforts to make government more transparent, is rolling back rules requiring labor unions and their leaders to report information about their finances and compensation.

The Labor Department noted in a recent disclosure that “it would not be a good use of resources” to bring enforcement actions against union officials who do not comply with conflict of interest reporting rules passed in 2007. Instead, union officials will now be allowed to file older, less detailed conflict reports.

The regulation, known as the LM-30 rule, was at the heart of a lawsuit that the AFL-CIO filed against the department last year. One of the union attorneys in the case, Deborah Greenfield, is now a high-ranking deputy at Labor, who also worked on the Obama transition team on labor issues.

The only people served by this move are union officials who want less oversight over their use of dues payments, much collected from unwilling workers.  The new policy certainly runs counter to the president’s promise to set a new tone in Washington.

(Hat tip to Philip Klein.)

Time Magazine Covers Decriminalization in Portugal

This week Time Magazine has an article discussing the new Cato report, “Drug Decriminalization in Portugal” by Glenn Greenwald.  Excerpt:

The question is, does the new policy work? At the time, critics in the poor, socially conservative and largely Catholic nation said decriminalizing drug possession would open the country to “drug tourists” and exacerbate Portugal’s drug problem; the country had some of the highest levels of hard-drug use in Europe. But the recently released results of a report commissioned by the Cato Institute, a libertarian think tank, suggest otherwise.

The paper, published by Cato in April, found that in the five years after personal possession was decriminalized, illegal drug use among teens in Portugal declined and rates of new HIV infections caused by sharing of dirty needles dropped, while the number of people seeking treatment for drug addiction more than doubled.

“Judging by every metric, decriminalization in Portugal has been a resounding success,” says Glenn Greenwald, an attorney, author and fluent Portuguese speaker, who conducted the research. “It has enabled the Portuguese government to manage and control the drug problem far better than virtually every other Western country does.”

According to the Time web site, it is among the most frequently read and emailed articles in the current issue.  If the drug czar wanted to keep Portugal’s decriminalization under wraps, it is safe to say that we foiled that plan!

Glenn Greenwald has more over at Salon.  A Wall Street Journal op-ed mentioned the study over the weekend too.  Watch or listen to the Cato event where Glenn presented his findings.

Does the GOP Recognize Socialized Medicine When They See It?

Rumor has it that Republicans in the House and Senate will soon decide whether their alternative to the Democrats’ health care reforms will include an “individual mandate” – a legal requirement that all Americans obtain health insurance.

A recent Consensus Group statement shows that the entire free-market health policy community – including scholars from the Heritage Foundation – opposes such a move.

The Cato Institute has published one study arguing against an individual mandate in itself, and two studies critical of its use in Massachusetts. Cato will soon publish additional studies showing how an individual mandate has – as predicted – led to exploding costs and government rationing efforts in Massachusetts, and arguing against its use at the federal level.

Worse, as I explain in this study, an individual mandate is in fact a large leap toward socialized medicine – regardless of the fact that health insurance would remain nominally “private.” Republicans may oppose creating a new government health insurance program. Yet if they are willing to force Americans to purchase insurance, they will effectively nationalize the health insurance industry.

Finally, as I explain in this op-ed, an individual mandate is always accompanied by taxpayer subsidies to people who may (or may not) need aid to comply. The more people who rely on government aid for their health care, the harder life will become for the party of tax cuts. Bill Clinton showed that the best way to defeat tax cuts is to paint them as a threat to YOUR health care. Just in case doing the right thing isn’t reason enough to reject this horrid idea, Republicans should know that by supporting an individual mandate, they will be slitting their own throats.

All for an idea that doesn’t even command support from a majority of the public.