Switzerland Officially Rejects Request from Brussels to Negotiate Surrender of Tax Sovereignty

Politicians from high-tax nations in the European Union are upset that companies - and tax revenues - are escaping to Switzerland to benefit from better tax law. But rather than fix their bad policies, they want the Swiss to raise the tax burden on economic activity in Switzerland. Not Surprisingly, as the Neue Zuricher Zeitung reports, Swiss leaders have said no:

The Swiss government has rejected formal negotiations with the European Union in a bid to resolve a controversy over the country’s corporate tax system. …Finance Minister Hans:Rudolf Merz and Foreign Minister Micheline Calmy:Rey said on Wednesday that Switzerland would not surrender its sovereignty on tax matters. The statement came in the wake of a decision earlier this week by EU ministers to open official negotiations with Switzerland. …Over the past few weeks several ministers have come out against holding formal negotiations with Brussels in the tax row. Merz said the cabinet and the cantons, which have wide:ranging autonomy in fiscal matters, wanted to ensure that Switzerland remains competitive.

Washington—the Anti-Economic Center

“Two West Coast senators are leading an effort to increase the number of cross-country flights out of [convenient but overcrowded] Reagan National Airport, a move that could lead to more noise over neighborhoods and jam already filled parking lots,” reports the Washington Post. 

Sens. Gordon Smith (R-Ore.) and Maria Cantwell (D-Wash.) have amended a Federal Aviation Administration reauthorization bill to allow up to 20 additional takeoffs and landings a day.

“It’s about connecting West and East Coast economic centers,” said R.C. Hammond, spokesman for Smith, elaborating on the senator’s motivation for the amendment.

Actually, Washington isn’t really an economic center. It’s more like an anti-economic center. Washington doesn’t do business, it impedes business, and subsidizes business, and regulates business, and cripples business. New York, Baltimore, Atlanta – those are East Coast economic centers. Not Washington, the city of lobbyists and government contractors.

Just what is it that businesspeople from Seattle and Portland would come to Washington for? They’d go to New York and Atlanta to make business deals. But they’d come to Washington to lobby for subsidies, or for regulations on their competitors, or to try to get a piece of the $2.9 trillion federal budget. But not to do actual wealth-creating business in the marketplace.

Some people say that West Coast senators want direct flights from National Airport to their home towns to make travel more convenient for them. If so, they should say so. But don’t tell us that the country would benefit from more Lobby Express flights.

“Free Skies” Agreement Should Lead to Lower Air Fares

A new US-EU agreement is welcome news for air travelers. As explained in an article at American.com, allowing US and European carriers to fly on any transatlantic routes will boost competition and lower fares. It also will facilitate tax competition, which is bad news for nations like the United Kingdom that impose high taxes on air travelers.

Good news for free trade and free travel: on April 30, the United States and the European Union signed an “open skies” agreement designed to liberalize transatlantic air travel. Scheduled to take effect in March 2008, the agreement removes most restrictions on routes and fares between the United States and Europe… The other interesting effect is on tax competition. With routes free and open, countries can compete for flights by lowering taxes. With routes opened up, countries will be able to tailor their taxes to attract flights, promoting price competition throughout the continent. Britain’s recently doubled air passenger duty raised fares to London by as much as £160.00 round trip, which has caused shifts in traffic away from London (traditionally a cheaper European gateway) to Amsterdam, Frankfurt, and other European hubs. When countries compete to cut taxes on air travel, the traveler wins.

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Fighting for Earmarks

“Republicans will seek a House vote next week admonishing a senior Democrat who they say threatened a GOP member’s spending projects in a noisy exchange in the House chamber, Minority Leader John Boehner said Friday,” according to the AP.

Their target is Rep. John P. Murtha, D-Pa., a 35-year House veteran who chairs the appropriations subcommittee on military spending.

Murtha, 74, is known for his gruff manner and fondness for earmarks – carefully targeted spending items placed in appropriations bills to benefit a specific lawmaker or favorite constituent group.

During a series of House votes Thursday, Murtha walked to the chamber’s Republican side to confront Rep. Mike Rogers, R-Mich., a 43-year-old former FBI agent. Earlier this month, Rogers had tried unsuccessfully to strike a Murtha earmark from an intelligence spending bill. The item would restore $23 million for the National Drug Intelligence Center, a facility in Murtha’s Pennsylvania district that some Republicans say is unneeded.

According to Rogers’ account, which Murtha did not dispute, the Democrat angrily told Rogers he should never seek earmarks of his own because “you’re not going to get any, now or forever.”

“This was clearly designed to try to intimidate me,” Rogers said in an interview Friday. “He said it loud enough for other people to hear.”

Now it’s true that there’s a House rule that prohibits “lawmakers from placing conditions on earmarks or targeted tax benefits that are based on another member’s votes.” Wouldn’t want anybody to oppose your earmarks just because you opposed his.

But really – after they lost control of Congress partly because of their profligate spending and their multiplying earmarks – this is what Republicans choose to fight over? They’re going to draw a line in the sand on C-SPAN to defend Mike Rogers’s right to put special-interest earmarks in appropriations bills? That ought to bring the independent and libertarian and small-government voters streaming back.

All Wet

Today’s NYT has a fascinating story on the recovery of some $500 mi18ship600.jpgllion in gold and silver coins from a colonial-era shipwreck in the Atlantic. The recoverer is Odyssey Marine Exploration, a publicly traded firm (AMEX: OMR). Odyssey made headlines a few years ago when it salvaged $75 million in coins from the Civil War-era shipwreck of the SS Republic off Savannah, Ga.

The Times notes that Odyssey’s latest find will fuel the already-bitter battle between “academic” and commercial marine achaeologists over treasure-hunting and recovery. The article includes this fusillade from the academics:

Kevin Crisman, an associate professor in the nautical archaeology program at Texas A&M University, said salvage work on shipwrecks constituted “theft of public history and world history.”

He said the allure of treasure hidden under the sea seemed to blind the public to the ethical implications. “If these guys went and planted a bunch of dynamite around the Sphinx, or tore up the floor of the Acropolis, they’d be in jail in a minute,” Mr. Crisman said.

As a marine archaeology buff, I’ve eagerly followed the exploits of both academic archaeologists like Bob Ballard and treasure hunters like Mel Fisher. To be sure, the two groups operate differently — academics can pursue more scholarly study of their wrecks because they have the luxury of government and/or foundation funding for their work, while commercial archaeologists must please their investors, who want financial returns and/or the joy of recovering and owning pieces of history.

With that distinction made, I have to say that Crisman should go soak his head. Odyssey’s latest find and Mel Fisher’s Atocha salvage work most certainly are not thefts of “public” or “world” property because neither the public nor the world owns the wrecks. If a ship is lost outside of territorial waters then, at best, the ship’s original owner or insurer owns the wreck, and it often is the case that no one legally owns a wreck until someone discovers and begins working it. (There sometimes are bitter legal fights between the ship’s owner, insurer, and the wreck’s discoverer when a discovery is made.) Chrisman’s comparing Odyssey’s discovery and salvaging of its latest wreck to the destruction of properties like the Sphinx or Acropolis is all wet.

Just as important, commercial incentives motivate the discovery of wrecks and the advance of marine archaeology. (Indeed, why didn’t the academics beat Odyssey to the Republic or Fisher to the Atocha?) It took Fisher more than a decade of searching to find the wreck of the Santa Margarita, and another five years to find her sister ship, the Atocha. To recover artifacts from wrecksites, Fisher invented a simple yet ingenious device, the “mailbox,” to pump clear water into the site to improve visibility and sweep away sand that covers the wreck. And, using money from his share of the more than $400 million recovered from the Santa Margarita and Atocha, Fisher financed other expeditions and established a nonprofit maritime heritage museum. Crisman’s dismissal of treasure hunters and commercial archaeologists as being irresponsible yahoos who care only about riches seems little more than academic snobbery.

Moreover, Crisman’s portrayal of academic archaeologists as selfless scholars who protect history and advance the public’s interest is bilgewater. Academic archaeologists love working wrecks as much as treasure seekers do — the joy of finding and exploring wrecks, harvesting artifacts, and holding history in their hands. Just like treasure hunters, the academics want legal protections to ensure that only they can salvage from the wrecks they discover, and they squirrel away the salvaged artifacts in their offices and labs. One day, perhaps, those artifacts will be put on display so the public can look but not touch, but how is that much different than Mel Fisher’s museum or the selling of artifacts to private collectors who often then put the artifacts on display?

There certainly is room in marine archaeology for both the treasure hunters and the academics. But there isn’t room for the elitist attitude that only academic archaeologists should have the right to touch history and commercial ventures are equivalent to destroying the Acropolis.

Let Parents Choose

One of the most frequent objections I hear to market education reforms is that poor and minimally educated parents won’t be able to choose wisely; that they would be bad education consumers.

There is overwhelming evidence that even the world’s poorest, least educated families make better educational choices for their own children than “expert” bureaucrats make on their behalf.

I once offered this evidence to a Democratic state legislator who shocked me with the racism of his response. He basically said that such successes in the slums of, among other places, Africa, were not relevant to the U.S. context. “Our poor blacks” he told me, are less well equiped to choose their children’s schools than Africa’s poor blacks. This particular state legislator is, by the way, African American.

To him and those who share his pernicious misconception, there is now yet more evidence that families of all races, at all income levels, at all education levels, can choose wisely for their children — even if they are American. A newly released study by Georgetown University scholars finds that families (overwhelmingly low-income and African-American) participating in D.C.’s school voucher program are making rational, informed choices and are becoming more astute consumers the longer they participate in the program.

What most opponents of market education fail to grasp is that the reason so many parents are so detached from their children’s education in the current monopoly school system is that the system itself has marginalized them. Most parents have virtually no direct say in any important aspect of their children’s public schooling. There is thus no point for them to become informed and active. When given a choice and a chance, they know what they want and they learn to be savvier consumers the more they exercise that choice.

Ad Hominem Absurdum

A little story popped up in the press today that offers what my wife and I, in the context of our responsibilities toward our 4 year-old son, often refer to as “a teaching moment.” That opportunity is afforded by an accusation out of Greenpeace this morning that Cato, along with 40 other policy organizations, are wholly-owned subsidiaries of Exxon-Mobil and thus should not be trusted.

The contention that Exxon-Mobil funding colors Cato’s analysis (with contributions, by the way, that accounted for less than 1/10th of 1% of our budget in 2006) is compelling only if Greenpeace has some sort of “motive detection device” that can be produced for public inspection. For instance, I say I’m motivated by genuine skepticism that industrial greenhouse gas emissions will usher in the Book of Revelations. They say I’m motivated by greed. We can settle this argument to the satisfaction of some third-party observer … how exactly? Even administering me with liberal doses of sodium pentathol is unlikely to settle this little spat about the nature of my character.

The truth is that my colleagues at Cato and I are skeptical about the end-of-the-world scenarios bandied about by zealots like Greenpeace, we anchor that skepticism in the peer-reviewed scientific literature, and that skepticism naturally attracts funding from those parties who like what they hear. Arguing that causality actually works the other way is not only an unproved and unprovable assertion (let’s call it “faith-based argumentation”), it is impossible to square with all the work we’ve published arguing against many of the things the oil industry is known to support.

For instance, we have vigorously argued against President Bush’s national energy strategy and the resulting Energy Policy Act of 2005, called for the dismantlement of the Strategic Petroleum Reserve, railed against federal oil and gas subsidies, argued for the elimination of the Clean Air Act rules that allow older refineries to escape tough anti-pollution standards, suggested giving the Arctic National Wildlife Refuge to the Greens to do with as they wish, argued against allowing cost-benefit analysis to dictate environmental standards, and defended the government’s right to renegotiate drilling leases in the Gulf of Mexico that provided highly favorable contractual terms to some oil companies.

Regardless, Greenpeace’s assertions — even if true — are founded upon a classic logical fallacy. For those who never took a course in logic, it’s called ad hominem. Despite what the body politic might otherwise believe, the merit of an argument has nothing to do with the motives of the person making that argument.

For instance, if the Institute for Policy Studies argues that minimum wage laws have little net effect on unemployment and produce citations in the literature to back that up, the reply that “IPS is staffed by a bunch of socialists who simply want to bring down capitalism and should thus not be listened too” persuades only those people who are too intellectually lazy or mentally impaired to think straight. Similarly, if Cato argues that it’s very hard to justify tight greenhouse gas emissions controls using strict cost-benefit analysis — and provides academic citations to back that up — the charge that “Cato is paid by Exxon-Mobil to take that position and thus shouldn’t be listened too” is likewise a variation of the argument made famous by Joe McCarthy. “He’s evil — and thus a liar.”

And in that vein, notice the thinly veiled smear entailed in Greenpeace’s constant use of the phrase “climate denial” and its related cousins. In this context, it’s obviously meant to echo the ugly “climate denial is like Holocaust denial” charge rampant at some high-decibel quarters on the Left. Greenpeace’s strategy here is to leave no insult or character smear off the table in its drive to censor the policy debate.

That Greenpeace resorts to such a tactics does not surprise. Those with good arguments pound the arguments; those with poor arguments pound the table. God forbid Greenpeace grant that people of good will might actually disagree with them. And God forbid that we ask people to judge an argument by the facts rather than some schoolyard game of “you stink.”