You are browsing the archive for 2014 April 20.

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Record Skyscrapers Planned

April 20, 2014 in Economics

By Mark Thornton

Continental record high skyscrapers have occurred in Europe and more recently in China and North America. Such regional or continental records indicate looming economic crisis as did happen in Europe and seems to be unfolding in China and North America.

More recently we have learned that world record setting skyscrapers are planned for China and Saudi Arabia. World record setting skyscrapers are a indication of a looming world economic crisis. The Telegraph reports:

The Kingdom Tower in the coastal city of Jeddah will measure 3,280 feet (1km), some 568 feet (173 meters) taller than the current Guinness world record holder, Dubai’s Burj Khalifa, which stands at 2,716 feet (827 metres)

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“Skyscrapers and Business Cycles” QJAE (2005)

See also: “Paging Mark Thornton: Saudi Arabia to Begin Building World’s Tallest Skyscraper Economic Policy Blog

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Source: MISES INSTITUTE

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Walgreen Could Benefit from Moving to Europe

April 20, 2014 in Economics

By Daniel J. Mitchell

Daniel J. Mitchell

Some shareholders at Walgreen Co., based in Deerfield, are pressing the company to move its headquarters to Europe, where it owns nearly half of Swiss pharmacy giant Alliance Boots. Should Walgreen move?

Walgreen Co.’s purchase of Alliance Boots raises the question of whether the expanded company should be domiciled in the United States or overseas.

Many shareholders want a “corporate inversion” with the company based in Europe, possibly Switzerland. Some think this would allow Walgreen to avoid paying tax on American profits to Uncle Sam. This is not true. All companies, whether domiciled in America or elsewhere, pay tax to the IRS on income earned in the U.S.

Politicians in Washington should lower the corporate tax rate and reform the code so that America no longer is an unfriendly home for multinational firms.”

But there is a big tax advantage if Walgreen becomes a Swiss company. The U.S. imposes “worldwide taxation,” which means American-based companies not only pay tax on income earned at home but also are subject to tax on income earned overseas. Most other nations, including Switzerland, use “territorial taxation,” which is the common-sense approach of only taxing income earned inside national borders.

The bottom line is that Walgreen, if it becomes a Swiss company, no longer would have to pay tax to the IRS on income that is earned in other nations. That’s not a trivial matter since that income already is subject to tax by other governments. Moreover, the U.S. has one of the world’s highest corporate tax rates, putting American-based firms at an even greater disadvantage.

Experts at UBS estimate that Walgreen faces a tax rate of more than 37 percent, while Boots has a rate of 20 percent. So if the combined company were based in Switzerland and got out from under America’s misguided tax system, the firm’s tax burden would drop, and UBS analysts predict that earnings per share would jump by 75 percent. That’s a plus for shareholders, of course, but also good for employees and consumers.

But ideologues on the left, even the ones who understand that the company would comply with tax laws, are upset that Walgreen is considering this shift. They think companies have a moral obligation to pay more tax than required.

This is a bizarre mentality. It assumes not only that we should voluntarily pay extra tax but also that society will be better off if more money is transferred from the productive sector …read more

Source: OP-EDS

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Dems Want Government Health Care for All — No Matter the Cost

April 20, 2014 in Economics

By Michael D. Tanner

Michael D. Tanner

With little fanfare, Vermont is preparing to become the first state to implement a single-payer, government-run health-care system. The Vermont plan, if implemented, would abolish private health insurance in the state and replace it with a taxpayer-funded system under which the state government directly pays doctors and hospitals.

Of course the state is having a bit of trouble figuring out how to pay for the program’s estimated $2 billion price tag, considering that the entire state government’s operating budget is currently just $2.7 billion. Currently under consideration is an increase in the state sales tax from 6.9% to 29%.

At the same time, opponents of ObamaCare have often suggested the massive health-care program is really a stalking horse for such a government-run system. ObamaCare’s fans have sometimes suggested the same. Senate Majority Leader Harry Reid (D-Nev.) has said that the health-care law is “as step in the right direction” toward abolishing private health insurance.

Obamacare may take us further down the road to a government-run health care system.”

But a single-payer system — or at least government-run health care — may already be a reality in far more ways than most Americans realize.

Already the government directly pays for more than half of every dollar spent on health care in this country. This compares to just 13 cents directly paid by the individual purchasing or consuming the health care. (Virtually all of the remaining 37% is paid for through insurance, much of which is also subsidized, directly or indirectly, by the government).

In fact, consumers in many countries that we associate with “socialized medicine,” such as France, actually pay more out of pocket for their health care than do Americans.

Medicare is the single biggest government health care program. At a cost of $612 billion this year, the massive insurance program for seniors alone accounts for one-fifth of all US health care spending. Medicaid pays an additional 15%. Altogether, there are at least a dozen government programs to provide or pay for health care.

In 2012, nearly 41% of New Yorkers receive health care through one or another government program, Medicaid in particular. According to the Kaiser Family Foundation, roughly 23% of New Yorkers are on Medicaid. By comparison, just 15% of Connecticut residents and 12% of New Jerseyans are on Medicaid.

Medicare is the second-largest health-care payer in New York, providing coverage for 12% of residents, slightly below the 14% …read more

Source: OP-EDS

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The Man Who Coined “Anarcho-Capitalism”

April 20, 2014 in Economics

By Mark Thornton

Michael Oliver, the man who coined the term Anarcho-capitalism is interviewed on Jeff Berwick’s Anarchast. Oliver is now a market technician, but over 40 years ago he wrote a book: The New Libertarianism: Anarcho-Capitalism. In the book he shows that Ayn Rand’s objectivism needs the economics and political theory of Murray Rothbard. Oliver and Berwick talk about the history of the movement, the current state of the movement, the election of 2016 and optimistically conclude that it actually all began with Lew Rockwell!

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Source: MISES INSTITUTE