Europe Archives — Laissez FaireLaissez Faire

John Cochrane notes that some people have been “advocating that even a 91% federal income tax rate, on top of state, sales, etc, as we had in the 1950s, (not counting all the loopholes!) will actually be good for the economy and also raise lots of revenue.” I’ve definitely heard that. But as Cochrine notes, it’s a fantasy. “Europe has been running a very useful set of experiments on what happens if you address yawning deficits with high income, wealth and property taxes.” He goes on to quote a recent article in the Telegraph.

Almost two-thirds of the country’s million-pound earners disappeared from Britain after the introduction of the 50p (percent) top rate of tax, figures have disclosed.

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election. . . .

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.

Since the announcement, the number of people declaring annual incomes of more than £1 million has risen to 10,000.

However, the number of million-pound earners is still far below the level recorded even at the height of the recession and financial crisis. . . .

Far from raising funds, it actually cost the UK £7 billion in lost tax revenue

Whole thing here.

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The Guardian just published an op-ed I wrote on Atlas Shrugged and the American spirit:

It’s not often that an American election sparks debate about a philosopher. But ever since Mitt Romney announced his selection of Paul Ryan as his vice presidential candidate, talk has turned to the ideas of novelist-philosopher Ayn Rand.

Ryan is on record as being a fan of Rand’s, and although he has taken pains to distance himself from her entire philosophy, he continues to stress that her novel Atlas Shrugged “is a great novel”. Ryan is far from the only one who thinks so. Since the financial meltdown of 2008, Rand’s 1957 novel has sold more than 1.5 million copies.

But here’s something interesting: virtually all of those sales took place in the US. Why are so many Americans, from students to politicians, talking about Rand’s novel – and why are her books comparatively unknown in Europe?

The answer to both questions is the same: Atlas Shrugged is a hymn to the American spirit.

Whole thing here.

• A man is pulled over for speeding. The cop who pulls him over discovers the driver is carrying $22,000 in cash. “[I]t’s not illegal to carry cash,” the officer notes. Maybe the man did something else illegal? “[H]e hadn’t committed a criminal law,” says the officer. What happens next? The cop seizes the man’s life savings suspecting it was drug money. According to the officer, “The safest place to put your money if it’s legitimate is in a bank account. He stated he had two. I would put it in a bank account. It draws interest and it’s safer.” Apparently.
• Paul Krugman is wrong about something.
• Paul Krugman is wrong about something else.
• It’s long past time we throw out the word “austerity.” By lumping together tax increases with cuts in government spending, the term masks the real issue: Is a country increasing government control over the economy or increasing freedom? And as Veronique de Rugy points out, for those European countries that have limited government spending, “austerity” has been a resounding success.
• The Washington Times interviews our friend John Allison, former CEO of BB&T Corporation, about government intervention in banking, Obamacare, and today’s moribund economy.
• From the “I wish I had written this” file: “When Julia Tried To Start A Business”
• Do the critics of oil speculation actually know what it is speculators do?
• I recently finished a fantastic book that traces the origins of the Green movement, Merchants of Despair by Robert Zubrin. I had planned on writing a review of the book, but my friend Alex Epstein has beat me to it, allowing me to condense my comments to: What he said.
• Regulatory State Watch: “Special Accommodations for Pee-Shy Employees”