Tag Archives: economics

Moving in the Right Direction

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For 13 years the countries of Southeast Asia have tried building a framework with China to resolve their territorial disputes in the South China Sea.

That plan has been eclipsed in part, officials at high-level talks in Malaysia this weekend acknowledged, in favor of a blunter strategy for dealing with China: strengthening alliances between countries anxious about Beijing’s increasingly assertive behavior.

This also runs counter to the People’s Republic of China’s strongly stated and often repeated preference for dealing with each of the South China Sea nations in strictly bilateral talks—one-on-one talks that the PRC could easily dominate.

Events like Vietnam and the Republic of the Philippines moving outside ASEAN to deal directly with each other and with other interested parties are intended to give those with disputes with the PRC’s sea grab a more powerful position from which to answer the PRC’s aggressions.

These budding arrangements also surround the signing of a new US-ASEAN strategic partnership, an arrangement that is intended to guide interactions between the two over the next five years and to

deepen the relationship as well as priority areas for cooperation not just between the two sides, but also on regional, global and transnational issues.

Whatever that means.

It’s good that the South China Sea nations are beginning to band together in order to better address the PRC’s acquisitiveness. That their moves don’t involve the US, despite President Barack Obama’s “pivot to Asia,” is…instructive.

Trust is a Two-Way Street

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Of necessity, trust must flow both ways. If one does not trust another, the other cannot rely on the one even to behave in a predictable manner toward that other, much less be trustworthy in turn.

The IRS has begun pushing 501(c)(3) nonprofits—the sort of nonprofits that the IRS has been caught targeting punitively conservative versions of—to give up the social security numbers of their donors.

Under the proposed rule, the IRS would create an optional filing for 501(c)(3) nonprofits. Those participating would, as part of their yearly report, turn over the Social Security numbers of any donors who give $250 or more to a charity in a given year.

The IRS’ claimed rationale for this is to simplify the ability of donors to claim the deductions on their tax returns by allowing the IRS to “verify” donors’ claims on their returns.

No. Since the IRS cannot be trusted by American taxpayers, it’s in no position to worry about the trustworthiness of an American taxpayer. There is no legitimate rationale for this “voluntary” reporting.

Further, for those who think this “optional” form of reporting will remain voluntary, I may know of some beachfront property north of Santa Fe in which you might also be interested.

Inversions

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Corporate inversions occur when a business in a high tax country gets bought out by a company in a low tax country and the bought-out company moves its own headquarters to the buyer’s country. This is occurring increasingly with American companies laboring under US’ usurious corporate tax code.

The Treasury Department—the Obama administration—demurs from these, and it has written, and it is writing more, rules to interfere with such moves. For instance,

The government still is working on tighter rules for a corporate tax-avoidance technique known as earnings-stripping and could release them in the coming months.

And this one:

One aspect of the rules, which limit companies’ ability to transfer foreign operations to a new foreign parent company, will apply to future transactions by all companies that completed inversions since Sept 22, 2014….

Such moves are things that a Progressive, Democratic Party-dominated government would love, but they’re anathema to liberty—interfering with the private decisions of American business owners as they do—and to a free market, which at the core of liberty.

The correct move, although it would restrict the personal power of government officials and their cronies and lobbyists, is to lower the corporate tax rates to globally competitive levels so that inversions of American companies become unattractive and so that other countries’ businessmen want to come here. With the job opportunities for Americans such additional businesses would represent.

American Companies Beholden to Foreign Governments?

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Now it appears that the Obama administration is taking yet another step to make us look like Europe: he’s negotiating an agreement that could end up requiring American companies, domiciled in America and operating in America, to report to European Union authorities.

Recall the European Court of Justice’s ruling last month that European citizens’ personal data that winds up being stored in the US as a result of various business deals is too exposed and the 15-yr-old, successful data-transfer Safe Harbor agreement between the US and the EU. This is the arrangement that’s being renegotiated, and potentially included in the new agreement is this:

American businesses could be required to report requests by US intelligence services for the data of European users under a trans-Atlantic data-transfer pact now being negotiated, according to the European Union’s justice commissioner.

Worse, it seems to be one-sided: EU companies in the US aren’t being required under this new deal to make similar reports to US authorities.

Hmm….

Democrats and the VA

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I’ve written a number of times about the Veterans Administration and the need to get rid of this dysfunctional government entity.

Now we get Democratic Party Presidential candidate Hillary Clinton doubling down on this failed VA and on her desire to expand Big Government further and to extend crony capitalism to a new arena.

Democratic presidential candidate Hillary Clinton is offering her vision for veterans’ health care, promising to fight full-fledged privatization while proposing the government contract with private providers for a range of health services.

Government has shown its incompetence in matters of health (among others), so her answer—the typical Progressive Democrat answer—is to have more of it. Crony capitalism has shown its profitability for politicians of any stripe, so this Progress Democrat wants more of that pie for herself. She wants Big Government to stay involved in the health care of our nation’s veterans, but she wants to shift that involvement to the health providers her administration will favor.

This would be foolishness if it weren’t dishonesty.

Veteranos administratio delende est.