An independent socio-economic thinktank.

Friedman: Consumption tax best, but unlikely

[i]A relatively pure consumption tax would be the most efficient revenue system for the government, but is unlikely to occur because it would offer politicians little ability to dole out special favors, Nobel prize-winning economist Milton Friedman told President Bush's advisory tax panel Thursday.
"I think most economists today would come close to agreeing that the major tax ought to be a flat-rate tax on consumption. Whether that tax is collected by a retail sales tax or whether it's collected by the way the income tax is by individual reporting would be open" for debate, Friedman told the panel, as it held a public hearing in San Francisco.
Such a tax would be ideal in part because it would encourage savings, Friedman said.[/i]

Comments by WorkForAll. Isn't it sad? Now economists finally agree on what's good for society and even outspoken economists like Friedman tell us the politicians won't like it because they will no longer be able to give out favors. Is this a recognition of the weakness of a political democracy or tolerance towards 'soft' corruption?

World's ecocsystem and economies at risk

A recent report by the UN, the Millennium Ecosystem Assessment, looked at the "ecosystem services" that are essential for human well-being. The conclusions are rather sobering. If humanity continues on its current pace, it will destroy its own ecosystem. Read on for comments and links to the original reports.

What is Welfare, when not called Social Dumping?

'What is welfare?' asks the Wall Street Journal in the context of the recent European political turmoil. All things considered, it even looks like Europe is starting to panic. Who wouldn't with 5.2. million unemployed in Germany, a post-war record? Even the European Chamber of Commerce estimates it will take more than a 100 years to get level with the US. That is, if the current disastrous economic policies are continued and we even slightly grow faster. Not very likely given the last decades of history. The point is, it doesn't need to be so. Just look at Ireland who reversed course some 20 years ago.
In the same context the Stability Pact has been undercut, opening the door to more irresponsible deficit spending. The Bolkestein directive is under fire. Protestors call it 'Social Dumping'. Did they read the report estimating that it would generate growth and create 600 000 jobs ? The real Social Dumping has been going on for already a few decades, but by the hands of the European governments imposing rigid labor rules and job killing labor taxes. Yes, in the name of Social Welfare. Not convinced? Check the real unemployment figures, ranging between 15 and 25%. In Belgium, taxes account for 47 % of the price of a bread and for 65 % of the 97 euro a day a home for elderly people costs. If anything will stop Social Dumping, it will be cutting down inefficient government sectors and lowering drastically the tax on labor.
If Welfare is not to become a fatal European disease, action is needed. Growth with not come from Innovation if people are not rewarded for taking risks and working harder because they will not innovate enough to compensate for the inefficiency of the system. Reducing government inefficiency and abolishing all labor tax can restore the balance and make Europe competitive again. It will also level the playing field with countries who recognised that taxing labor is not the way to achieve Welfare.
For the Bolkestein Directive, read it first. [url=http://europa.eu.int/comm/internal_market/en/services/services/index.htm#2004proposal]Bolkestein proposal.[/url].
Read on for the WSJ article.

Why Europe lags behind. Is Lisbon going far enough?

In the Washington Post of August last year, Bruce Bartlett comes to the conclusion that Europe has 20 years to catch up with the USA. The figures on poverty also slash some myths. On average, one is better off being poor in the US than in Europe. The study of WorkForAll provides insight by comparing Belgium with Ireland but as the data shows, what applies to Belgium actually applies to most of the EU15. The Lisbon strategy is not just 5 years overdue. It's 20 years overdue. And while it is a positive sign that awareness is growing, the recent renewed opposition that is actually just pleading for a status-quo while the stability pact has been relaxed, will just increase the burden for the future generations. The time to act is now. Judge for yourself and read on the following publications downloadable from the next pages.

Verhofstadt: "Lisbon method works only once a year"

http://www.euractiv.com/Article?_lang=EN&tcmuri=tcm:29-136616-16&type=News In above interview with euractiv, Premier Verhofstadt makes an implicit appeal to impose maximum and minimum tax levels for all European member states. We have following comments:

Destexhe: Wallonie, la verite des chiffres

I'll post this in English. While the WorkForAll study is based on country specific figures from the OESO, as most people know, each country also has regional differences. We excluded such analysis because there are no OESO figures and hence a comparaison is questionable. However, recently a study was published putting Belgium's South (Wallonia) against the North (Flanders) and the rest of Europa. As most Belgians know, the South has a much more State-Socialist and Labor Union based political class. The economic results are even more disastrous than for the whole of Belgium although much compensation clearly comes from the cosmopolitan central Brussels region. The study however is frighthening because it shows that while Belgium's situation is average at the best and the Northern Flanders are clearly better of, the performance remains mediocre and as the South shows, it can get worse. The good news remains that even this study takes Ireland as a counter-example. Read on the study by d’Alain DESTEXHE, a senator in Wallonia.[url=http://www.workforall.org/wallonie_fevrier_2005.pdf]wallonie_fevrier_2005.pdf (250 KB)[/url]
Note that in Quebec, the French-speaking region of Canada, similar studies had been undertaken in 2001 by 'L'Institut Economique de Montreal.
[url=http://www.workforall.org/assets/TailleEtats.pdf]TailleEtats.pdf (370 KB)[/url] [url=http://www.workforall.org/assets/Quebec_fr.pdf]Quebec_fr.pdf (250 KB)[/url]

Greenspan Touts Idea of a Consumption Tax

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The Fed chief made his comments in prepared remarks to the President's Advisory Panel on Federal Tax Reform. Revamping the complex tax code is an important goal of President Bush.

Europa wordt warm voor de Vlak Taks ('Flat Tax')

Terwijl bijna alle nieuwe europese lidstaten, allen uit het ex-communistische blok, de eenvoudige en veel lagere 'flat tax' ingevoerd hebben om hun welvaartsgroei terug op gang te brengen, werd dit aanvankelijk door de 'oude' en machtige lidstaten met argwaan bekeken. Stilaan begint men echter te beseffen dat daar een remedie ligt voor de europes stagnatie. Euroactiv, een europese nieuwsdienst, bericht hier over. Lees verder ...
Toevoeging: ondertussen is de Vlak Taks in Nederland grondig onder de loep genomen. We vonden volgende studie uitgevoerd door de Universiteit van Leiden (1999!). [url=http://www.workforall.org/assets/2005_8_Caminada.pdf]2005_8_Caminada.pdf (200 KB)[/url]

WorkForAll in the media

De studie van WorkForAll trekt de aandacht van de media.

De Tijd (www.tijd.be), 20 Dec 2004, 5% welvaartsgroei is geen utopie.
met als kanttekening: [i]Ierland heeft aangetoond dat een afslanking van de overheidsuitgaven niet leidt tot een afbouw van de essentiele sociale voorzieningen.[/i]
Liberales (www.liberales.be), 14 Jan 2005, interview door Jan Pille met Eric Verhulst onder de titel "Vijf procent welvaartsgroei is geen utopie".
De volledige tekst op op volgende paginas.
Voordracht 'Via Reaganomics naar volledige tewerkstelling' (31.01.2005) door Willy De Wit.. Zie verslag op [url=http://lvb.net/item/817#more]http://lvb.net/item/817#more[/url]

Ierland scoort ook hoogst voor welzijn

De studie van WorkForAll maakt duidelijk welke de succesfactoren zijn voor een duurzame welvaartsgroei. Blijkbaar is welvaartsgroei ook goed voor het welzijn van de burgers. Een recente studie van The Economist (The Economist Intelligence Unit’s quality-of-life index) heeft een 'levenskwaliteitsindex' vastgelegd die niet alleen de materiele maatstaven hanteert. Alle landen werden vergeleken. Ierland scoort het hoogst, Belgie komt op de 24st plaats. Zimbabwe scoort het slechts.
Download de studie hier:[url=http://www.WorkForAll.org/assets/Quality_Of_Life.pdf]Quality_Of_life.pdf[/url] (68KB)