That is, alas, typical. Proponents of closer European integration seldom acknowledge criticism of their project, let alone address its problems. Take, for example, waste and corruption in Brussels. The European Court of Auditors has refused to certify the EU budget for 14 years in a row. Yet no visible action has been taken to make EU accounting more transparent. If the European Union were a corporation, its top management would have been jailed long time ago.
The bill includes fees on certain segments of the health care industry as well as an increase in the Medicaid drug rebate amount for both brand name and generic drugs. The primary purpose of this Outlook is to examine the economic incidence–that is, the distribution of the true economic burden–of these policies. The fees in the Finance Committee bill are equivalent to excise taxes. As a result, the economic burden of these new taxes will be largely transferred to consumers in the form of higher prices, regardless of the statutory incidence, or legal construction, of the fee.
The $827 billion stimulus legislation under debate in Congress includes provisions aimed at ensuring oversight of the massive infusion of contracts, state grants and other measures. At the urging of the administration, those provisions call for transparency, bid competition, and new auditing resources and oversight boards.
We start with a report from Jan Schnellenbach who severely criticized the proposed reforms of German inheritance tax law. More generally, even if the desire to increase tax revenues in order to get out of the public finance crisis was understandable, he points to the “recent symptoms of distributive populism” found in Germany.
By emphasizing incentives to produce, rather than incentives to consume, the early Keynes was evoking classical, supply-side analytics. Whenever profit margins are tightly squeezed—whether by costs of labor, energy, taxes and/or debt service—the result is a periodic episode of cost-cutting called « recession. » Once the cost-cutting and inventory trimming achieves its purpose, profits and the economy recover.
Most economists, particularly those in public finance, find it preferable to raise revenue by taxing a broad base at a low rate in order to maximize the amount of revenue while reducing the distortions to the economy. The opposite of a broad-based tax is an excise tax, a tax levied on particular goods. Historically, governments have used soft drink excise taxes, which have existed since at least 1920, primarily to generate revenue. Today, however, states and localities increasingly view the taxation of soft drinks as a social tool—a way to curb rising obesity rates.
That was January 5, 1987. Ronald Reagan was president, and the deficit had reached almost 5.4 percent of gross domestic product (GDP). Now, three decades later, Democrats have changed their minds about the dangers of deficit spending. In February 2009, the nonpartisan Congressional Budget Office estimated that the deficit will reach $1.2 trillion this year-roughly 8.3 percent of GDP. That giant increase is attributable mainly to Washington’s September 2008 bank bailout and the federal takeover of mortgage lenders Fannie Mae and Freddie Mac.
The economic outlook is extraordinarily uncertain as no-one knows how long the credit crisis will last or how much damage it will do. Blaming the credit crisis, which he referred to on 14 occasions during his speech, the Chancellor downgraded his growth forecast but stuck to the view that 2008 will be the bottom, with growth picking up from 2009. If the Chancellor is right, this is hardly the stuff of crises.
In The Gathering Storm, Winston Churchill wrote of his initial thoughts after his election as Prime Minister in May 1940:
As I went to bed at about 3 a.m., I was conscious of a profound sense of relief. At last I had the authority to give directions over the whole scene. I felt as if I were walking with destiny and that all my past life had been but a preparation for this hour and for this trial.
While it is not recorded whether Mrs. Thatcher felt the same way in the early hours of May 4, 1979, she very well may have.
Britain Before Thatcher: The Sick Man of Europe