Think Pieces

Queen's speech

Written by | Wednesday 24 November 2004

What struck me most about the Queen's speech was not the draconian plans to combat terrorism or crime. With an election coming up, that is just advertising. The government has plenty of powers to combat terrorism. But still feels the need to convince tabloid readers of how illiberal it can truly be.

The rich will pay more if you tax them at a flat rate

Written by | Sunday 21 November 2004

Shortly before the US election, President Bush listed his domestic priorities to the New York Times. "I'm going to come out strong after my swearing-in," he said, with "fundamental tax reform, tort reform, privatising of social security [pensions]."

That first priority is particularly interesting, because many of Bush's economic advisers are urging him to tear up the 55,000-odd pages of the US tax code and to follow the lead of nine other countries by replacing it with a simple, flat-rate tax.

The rich will pay more if you tax them at a flat rate

Written by | Sunday 21 November 2004

The idea of the flat tax is that everybody above a set threshold pays the same rate of tax. You simply scrap the complicated banding system of progressive rates, where big earners pay a higher rate of tax than middle earners, middle earners pay a higher rate than low earners. Out go the intricate adjustments depending on people's age or marital status, and all the other exemptions, concessions and rebates deemed necessary to make a progressive tax system look remotely fair. With flat tax, the poor pay nothing.

Wealth depends on the rule of law

Written by | Tuesday 9 November 2004

If you want to get rich, you need economic growth. To create economic growth, you need people to be creative, to produce things, and to bring them to market and exchange them. But producing and creating things needs investment - education, training, buying capital equipment, and so on. That's risky, because your business may not work and you could lose money. But if you have no secure rights over your own property, it's suicidal. That is why you need property rights and the rule of law.

Free trade

Written by | Monday 11 October 2004

Throughout the history of economic life, "free trade" has been the exception, not the rule.

Nearly a thousand years ago, the rise of Europe's merchant class posed a challenge to the feudal system of the time. The merchants' business was buying and selling, not working the land - so they owed no obligation to a landlord, and paid no taxes to the church.


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