In a subscription-only editorial yesterday, Wall Street Journal Editorial Board member Stephen Moore notes that many countries in the rest of the world, including a few you'd never expect, are adopting the tax-cutting policies of Ronald Reagan, to their benefit:
Earlier this year the cover of Time Magazine depicted Ronald Reagan with a tear running down his cheek -- the message being that the political class has abandoned the Reagan legacy.....
Ironically, the Reagan economic philosophy of lower taxes, less regulation and free trade has never been more in vogue abroad -- so much so that it has become the global economic operating system.
Let's call this phenomenon Reaganomics 2.0.
In the Pacific Rim nations, for example, Malaysia, New Zealand, Singapore, Taiwan and Vietnam all have cut taxes this year or have plans to do so. Singapore has cut taxes multiple times in recent years and it now operates with no capital gains tax.
But the remarkable attitudinal shift on taxes has been in Europe, which in the 1980s and '90s showcased their gold-plated social safety nets, boasted of their citizens' willingness to pay high tax rates to maintain them and were openly contemptuous of the Reagan tax-cutting philosophy. Now those same nations of old-Europe seem to be in a sprint to see which country can get their tax rates lowest quickest. Nicholas Vardy, the editor of "The Global Guru" economic newsletter calls the phenomenon "Europe's Reagan Revolution."
French President Nicolas Sarkozy has plans to cut his country's business income tax by at least five percentage points as part of his economic rehabilitation plan. Spain and Italy are negotiating plans to lower their corporate tax rates, and the U.K. already did so earlier this year. Sweden and Russia last year eliminated their estate taxes because they said the tax was economically counterproductive. In Germany under Chancellor Angela Merkel, the corporate tax rate has been reduced to less than 30% from 39%.
Some of this tax chopping in Old Europe is a response to the success of the U.S. tax rate reductions and the fast pace of job creation that ensued from economic growth -- though few European officials will acknowledge that reality. But a bigger factor more recently has been the impact of the flat-tax revolution in Eastern Europe. Dan Mitchell of the Cato Institute says there are now 14 nations with flat taxes, 10 of them in nations formerly behind the Iron Curtain. "The pace of tax reform in these nations is so frantic, that it's hard to keep up to date with the changes," he says. Poland hasn't yet established a flat tax, but recently cut its business tax to 19% from 27%.
Austria cut its corporate tax rate to keep pace with its neighbor, Slovakia which recently adopted an 18% flat tax. Singapore is cutting taxes to compete with its 16% flat-tax rival Hong Kong. Northern Ireland wants to cut its tax rates so that it can compete with the economic gazelle of Europe, the Republic of Ireland. In 1988 Ireland was a high-unemployment stagnant economy with a 48% corporate tax rate, today that rate is 12.5% and the rest of the world is now desperate to match its economic results. Meanwhile German Finance Minister Peer Steinbrueck sold the latest tax cuts as "an investment in Germany as a business location."
The idea that jobs, businesses and wealth follow low tax rates is widely accepted.
..... This is all very good news -- except in the U.S.
Sad, but true. Congress has proposed tax increases that collectively, if enacted, would dwarf the previous record 1993 increases that even Bill Clinton once admitted went too far (fourth item at link in "The Classics" category). Every major Democratic presidential candidate wants some form of nationalized or nationally-controlled health care; though they may deny it now, they will have to raise taxes, and steeply, to pay for any such program if it is ever enacted. Some of us remember that the original HillaryCare proposal was supposedly going to paid for with only increased cigarette taxes -- a fantasy that didn't survive more than a day or two after the full plan was released.
Finally, the major GOP candidates appear to be satisfied with advocating making the 2001 and 2003 Bush tax changes permanent, and stopping there. Meanwhile, Moore shows that other countries are demonstrating, in case we have forgotten Reagan's multiple tax cuts, that cutting rates several times in stages will lead to even greater prosperity, and even greater tax collections.
The US press remains (deliberately?) ignorant of the tax revolution going on overseas, and stands poised to ridicule anyone who might propose the next logical step -- another income-tax cut. Mr. Moore is very clear, and very correct, about the potential implications:
All of this threatens to move America from leader to laggard in the global race for job creation, capital investment and prosperity. Maybe that explains the tear rolling down the Gipper's cheek.
Cross-posted at BizzyBlog.com.
—Tom Blumer is president of a training and development company in Mason, Ohio, and is a contributing editor to NewsBusters
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Reaganomics: Milton Friedman 101
September 1, 2007 - 18:55 ET by Lame CherryMilton Friedman deserves more credit for the current make up of the United States than any American. His financial policies were written of over 50 years ago when Keynsian stagnant socialism ruled the world. Friedman was called crazy and castigated and pushed into the wilderness.
Reagan is the force who brought his policies to the world along with Mrs. Thatcher. Friedman has been in the news again as of today though he died last year.........the military is recruiting soldiers with the bonus system.....the all volunteer Army was Milton Friedman's brain child and it works.
The fastest growing market from Soviet poverty to western civilization is in the Baltic. They have no taxes on the poor, a 23 percent tax on mid income to wealthy and are drawing in investment from around the world. The standard of living there is going through the roof. This is Milton Friedman's work and the only reason socialism is prevailing in America and the former republics of Brazil and Venezuela is the cartel nation rapists like Rothschild and Rockefeller use it to skim billions off of each nation.
I have advocated to the Rockefeller's a compromise where they could skim the world economy, leave American progression free in North America with the Americanization of Canada and Mexico with trading partners in South American republics, but the cartel desires control more than money for reasons more than the world order.
America could run a flat tax, a two tier dollar, ownership of the US Treasury printing backed currency, the use of Canadian raw materials, US technology and Mexican labor for a thriving western arena. As I revealed here, the advancement of sea resources would fuel this in feeding the Eurasian appetite and would leverage the world without costly wars.
All of the above with the poverty class not paying one nickle in taxes and all with private medical and retirement systems giving complete control back to the US citizen.
Reaganomics does indeed work. The problem is robber barons like Soros to the cartels come in and drive nations to debt, then raise interest rates and cause defaults where communists are installed so there is only one authority to reap money from. This is Chavez and Castro........and this trend is building in the United States.
It is pure nonsense for President Bush to bail out mortgage owners which are in trouble now due to banks handing out money to illegals and poor people to rape them. Inflation is the enemy harming Americans and it is fueled by the Fed printing money for the Rockefellers. Bush 43 should instead of announced mortgage loan interest rate drops so people could pay off their own debt and instead invested that tax payer money in drilling new oil wells as it is oil, oil, oil driving prices. If those Chicoms can cap oil prices for the good of their paper tiger economy the US can do the same in the short term instead of paying billions more to market traders who always drive prices up.
The US economy is going to revert into a depression as citizens can not afford inflation hiking all prices up with the continued devaluation of the wages they are slaving for. This system of debt can not function any more.
The day after the planned radiation poisoning of the Middle East oil fields in a nuclear exchange and Putin announces all Russian oil will be paid for in Euro's is the day the United States collapses to a second world power with a first world military. Central Europe as I have warned who has been in hand in hand with Putin's Bolsheviks messing up the Middle East will then have the Euro as world currency, print trillions in Euros which will supplant the dollar and then America will face what the British did in loosing their empire.
All of this can be avoided, but the cartels running America are bringing this about as they get control of the American sphere then.
The danger in this is the world tribal fracture. The Israelite nations known as the Indo European nations of the west will split against the rest of the world with Japan. The Eurasians will assassinate each other as they always do in this period and it is certain the catalyst will be Libya and Egypt pushing for control of the Middle East will cause a central European military response. At that point, the world war starts like none ever seen.
North Africa will see the first sweeps, but the main wars will be from the Rhine, Bohemia, Prague and the Balkans. Just as the Assyrians, Babylonians etc... all finished the fight in the valleys north of Jerusalem, this will like Allenby be battled out in Bashan and the valleys there as they are even more perfect for modern long range warfare being flat with appropriate hills for an arena.
What that all has to do with Reaganomics is........fix the system you power hungry Rockefellers as what you are creating has only one way to survive and that is an American Republic of wealthy citizens armed to the teeth and producing our own energy by God's grace.
Share the power cartel or you will be kings over an atomic hell.
Friedman was absolutely correct. America does not need to scrap capitalism, but set it free and it's citizens to prosper.
*HIC IACET ARTORIVS REX QVONDAM REXQVE FVTVRVS
Hay LC; Milton Friedman, also thought up School Vouchers.
September 1, 2007 - 19:38 ET by upcountrywaterIn the 50's! The plan was for them to work like food stamps, ie: slect your own school.
To bad ; by some wierd twist of fate (school choicers) didn't get the wal mart protesters, marching in front of.
BIG SCHOOL
Another point:
"Share the power cartel or you will be kings over an atomic hell. "
That would be a: 700 AD , oil free, electricity free ,atomic hell.
How very carbon free, carbon free at last.
Entitlement over infrastructure every SINGLE time.
Prof. Friedman had all sorts of good ideas...
September 1, 2007 - 19:44 ET by sarcasmoNo draft. End tax & spend drugwar. Less govt. spending & more trade...Almost sounds like someone I know! ;)
JMR
Rally online with fans of Dr. Ron Paul.
Keynsian stagnant socialism
September 2, 2007 - 10:15 ET by dscottKeynsian stagnant socialism ruled the world.
LC, I'm going to dispute this characterization of Keynes. I read Keynes book cover to cover on the modern economy many years ago. Something that many Democrats ignored in their politically driven agenda was their use of pump priming the economy via deficit spending to stir economic activity. Keynes wrote that the purpose of taxation in the modern economy is to act as a brake upon it. As in everything else Democrats pick and choose (very poorly btw) ideas to cover their agenda. The ideas don't have to make any sense, just look at AGW, another bid to have government run everything. You should know that Friedman did not form his ideas in a vacuum.
dscott's postulate: The degree to which someone exaggerates or deceives is inversely proportional to the merit of the advocated position.
No Kidding
September 1, 2007 - 23:54 ET by Steve08080As usual the left is wrong when it comes to taxes, but we already knew that. They're trying their hardest to wreck this country. I recently watched a PBS documentary (I couldn't believe PBS broadcasted this) called Commanding Heights/The Battle for the World Economy (originally aired in 2002). This documentary pretty much covered socialism/communism and capitalism. It was truly amazing how once countries switched over to the free market how their economies just exploded. I highly recommend watching this dvd. It should be required viewing for all high school students, but of course the left wouldn't want that.
Ronald Reagan once again was right and the usual suspects can't swallow it. God Bless you RR! We need another RR for '08.
http://www.amazon.com/Commanding-Heights-Battle-World-Economy/dp/B00006HAZF/ref=pd_bbs_sr_1/102-4310597-4331324?ie=UTF8&s=dvd&qid=1188704451&sr=1-1
Steve, thank you for the
September 2, 2007 - 01:40 ET by jdhawkSteve, thank you for the information on this DVD and book. I purchased it on Amazaon. I'll let you know what I think of it when I get a chance to see the DVDs and read the book.
Thank You
September 2, 2007 - 08:30 ET by Steve08080No sweat Mr. Hawk. I think you'll enjoy it.
Leaches and bloodletting
September 2, 2007 - 20:21 ET by nkviking75An analogy: If tax policy was medicine, Democrats would be mandating the use of leaches and bloodletting.
When you put the clowns in charge, don't be surprised when a circus breaks out.