My weekly reading material for September 22, 2024

by Eric Pichet, The Journal of Tax LawVol. 14, p. 5, April 2007

Abstract:

Despite attempts to ‘unwind’ the Impôt de Solidarité sur la Fortune (‘Solidarity Wealth Tax’, the French wealth tax) during the last legislature (2002-2007), ISF revenues had increased dramatically by 2006, from €2.5 billion in 2002 to €3.6 billion. Analysis of the economic impact of this ISF wealth tax has led to the following conclusions: Tax collection costs remain low (around 1.6% of revenues); The failure to increase the threshold in line with inflation between 1998 and 2004 yielded a windfall of €400 million for the French State in the 2004 financial year alone; ISF fraud, mainly involving underestimation of real estate, has stabilised over time at around 28% of total revenues, equivalent to (if the legal framework had remained unchanged) a deficit for the state of €700 million in 2004; Capital flight since the introduction of the ISF wealth tax in 1988 amounts to around €200 billion; The ISF causes an annual budget deficit of €7 billion, or about twice the revenue; The ISF wealth tax has probably reduced GDP growth by 0.2% per year, or about €3.5 billion (about the same as the revenue); In an open world, the ISF wealth tax impoverishes France by shifting the tax burden from wealthy taxpayers leaving the country to other taxpayers.

HT2 Tyler Cowen.

by Scott Lincicome, Cato at LibertySeptember 16, 2024.

Extract:

Yeltsin, who would two years later become Russia’s first freely elected leader, walked the aisles of the relatively small Randall’s Market that day and was amazed by the variety and affordability of the goods on display. According to various reports, this visit—not the one to NASA—was the catalyst for Yeltsin’s departure from the Communist Party and his abandonment of the Soviet economic model. His 2007 visit New York Times obituary tells the story:

During a visit to the United States in 1989, he became more convinced than ever that Russia had been disastrously damaged by its centralized, state-run economic system, where people stood in long lines to buy the most basic necessities and the shelves were more often than not empty. He was overwhelmed by what he saw in a Houston supermarket, by the kaleidoscopic variety of meats and vegetables available to ordinary Americans.

Lincicome also quotes this from the New York Times obituary for Yeltsin:

Leon Aron, quoting a colleague of Yeltsin, wrote in his biography, “Yeltsin, A Revolutionary Life”…: “For a long time he sat motionless on the plane to Miami, his head in his hands. ‘What have they done to our poor people?’ he said after a long silence.” He added: “On his return to Moscow, Yeltsin would confess the pain he felt after the Houston excursion: ‘pain for all of us, for our country so rich, so talented and so exhausted by incessant experiments.’”

He wrote that Mr Yeltsin added: “I think we have committed a crime against our people by making their standard of living so incomparably lower than that of the Americans.” An associate, Lev Sukhanov, is reported to have said that it was at this moment that “the last remnant of Bolshevism collapsed” in his boss.

DRH note: This last quote reminds me of something Nikita Khrushchev said, something that was quoted in Red abundanceThis is what I wrote in “Plenty of Nothing”, my review of Red abundance:

The book ends with a sympathetic portrait of Nikita Khrushchev in 1968. Khrushchev, forced into retirement in 1964, looks back with sadness and anger at the enormous amount of blood shed for communism. He thought the losses were worth it because he and his comrades created paradise. But here are his actual words, which Spufford tells us in a footnote were on tapes Khrushchev had recorded but which were withheld from the memoirs his son had smuggled to the West:

“Paradise is a place where people want to end up, not a place they run away from. What kind of socialism is that? What kind of shit is that, keeping people in chains? What kind of social order? What kind of paradise?”

by Elizabeth Nolan Brown, RodeSeptember 18, 2024.

Extract:

I can’t say whether the allegations against Combs are true. But reading the indictment, a few things jump out that I can comment on. The first is how, once again, the Mann Act is rearing its ugly head, criminalizing something that shouldn’t really be a crime. The second is how federal prosecutors are (once again) stretching the application of sex trafficking laws to conduct beyond the types of actions they were originally designed to target. And the third is how the racketeering charge allows the government to seize far more assets than it would otherwise be allowed to seize.

by Christian Britschgi, RodeSeptember 17, 2024.

On Thursday, a group of Republican senators led by Sen. Tim Scott (R–SC) introduced the Renewing Opportunity in the American Dream (ROAD) to Housing Act, which proposes a grab bag of reforms to federal housing programs.

Unlike the slew of federal YIMBY (Yes in my backyard) bills introduced in recent years, Scott’s bill does not attempt to prod, goad or bribe local and state governments to liberalize their zoning laws. “Housing policy is inherently local, and federal lawmakers should encourage local solutions to local problems,” the bill’s press release reads.

However, the bill contains at least one idea to increase the housing supply.

This means that federal regulations requiring prefabricated homes to be built on a permanent steel chassis will be repealed.

by Rainer Zitelmann, Wall Street JournalSeptember 17, 2024.

Extract:

In 1942, Hitler defended the Soviet planned economy to those close to him: “One must have unconditional respect for Stalin. In his own way, the man is quite a genius… and his economic planning is so comprehensive that it is surpassed only by our own Four Year Plan. I have absolutely no doubt that there have been no unemployed in the USSR, unlike in capitalist countries like the USA.”

In July 1941, Hitler said, “A sensible utilization of the forces of a nation can only be achieved with a planned economy from above.” And: “As far as the planning of the economy is concerned, we are only at the beginning, and I imagine that it will be a wonderfully beautiful thing to build up an all-encompassing German and European economic order.” Statements like these confirm Hayek’s basic thesis.

And:

Hayek’s book presents a second major thesis: the loss of economic freedom precedes the loss of intellectual and political freedom. Critics who dispute his concerns point to the United Kingdom, which introduced extremely high taxes and nationalizations after World War II. While the economic consequences were disastrous—and were only reversed decades later by Margaret Thatcher, whom Hayek greatly admired—there was no loss of political freedom.

The critics have a point. The loss of economic freedom does not necessarily or directly lead to the loss of political and intellectual freedom. But Hayek was more right than wrong. Look at the recent example of Venezuela, which lost economic freedom first. Political freedom disappeared afterward.