Taxes on the rich clearly aren’t too high

There are lots of countries in the world that are tax havens. They are short of skilled labour. Anyone earning enough to pay higher-rate tax in a Western country has a skillset that would easily land them a job doing something similar in a tax haven.

Instead, they’ve chosen to live where they do. Definitionally, this shows that they believe the tax is a price worth paying for the quality of life they enjoy there. If they didn’t, then they’d have moved to a tax haven already [*].

So while some rich people might complain that they think taxes are too high, they clearly mean this in a “it’d be nice if this thing was cheaper, but I’m still going to buy it at the price it’s on sale for” way (rather like people buying Apple products), and therefore we can discount their protests.

Taxes on unskilled workers, who don’t have the same advantages when it comes to free migration, are a different story: the poor can’t be deemed to have agreed to the deal in the way that the rich clearly can.

So the morally best way to reform the tax system would be to remove the working poor from the tax net, while ensuring that those wealthy enough to have a choice bear more of the cost. This is even before you consider the massive benefits (on virtually all measures) of having a more equal society.

[*] there is a pragmatic argument that “we’ll be stuffed if all the talented people leave”, and there is presumably a level of tax at which this might be true. However, evidence from the 1960s and 1970s (when marginal tax rates on very high incomes were above 90% in the UK) suggests that the proportion of talented people leaving even at that rate was low enough as to be irrelevant to overall economic growth.

Waratah trains: why the NSW government isn’t at fault

The suggestion that the NSW government had done nothing wrong would normally seem unlikely, irrespective of context. Even more so when the context is a $2.6bn capital investment project that’s at risk of collapsing, requiring a massive government bailout, or both.

However, the funding shortfall threatening the public-private partnership (PPP) to build 78 new Waratah suburban trains for Sydney CityRail services is an exception. The NSW government did a good job in managing risks for this deal, and it’s at risk of having to stump up extra taxpayer’s cash for reasons nobody can blame it for not foreseeing.

On the plus side, even if the government does have to step in, it’s unlikely the NSW taxpayer will lose much. The biggest loser is likely to be Downer, the train’s builder, which is exactly where the blame should lie. Unfortunately for the NSW government, the deal is arcane enough that the press and the opposition can easily claim otherwise.
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What I’ve been up to, week ending 2010-09-19

  • Sorry #LibDems. Having been in another country w/coalition – and having looked at the numbers on #ukvotes – you did the best thing available #
  • Directly related to last tweet – the only alliance in Aus with a mandate to govern was ALP/Green. Not Nationals/Liberals. #auspol #

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World leader? Not even close

Matt Yglesias, who used to be a liberal US commentator but seems to have turned into a neo-liberal US commentator, has a very odd piece on retailing, in which he argues that being awesome at retailing is the US’s major skill, which will one day benefit poor benighted foreigners:

We’re the world leaders in retail sector organizational innovations, as witnessed by McDonald’s semi-hegemonic global position and the fact that in a place like China where it’s not number one, the company it lags behind is another American firm. But here in the U.S., we’ve long since pushed beyond mere fast food into the realm of big box retailing, with Wal-Mart leading the way. But thought both these firms have some international operations, they’re evidently not that big and in the case of Home Depot seem largely limited to Canada and Mexico and Wal-Mart doesn’t operate in continental Europe at all… That kind of thing will probably change over time, to the benefit of European consumers, and I guess make the Walton family even richer.

Now, there are only two ways in which I can envisage Matt might have come up with this argument. One is that he’s never been abroad, never looked at any case studies on retailing, never spoken to anyone who worked in retail strategy, and never looked at any reports on US retailers’ attempts at international expansion. The other is that he’s well aware that the above is absolute, ridiculous insane nonsense on stilts, but is writing it anyway.

Having worked in retail consultancy, the retailers that people admire and seek to emulate for their amazing supply chain skills are Tesco, Carrefour, Inditex (Zara), IKEA, Aldi, H&M, AS Watson (Superdrug) and Amazon. One of these retailers is from the US, six are European, and one is from Hong Kong.

Wal-Mart has repeatedly tried to expand internationally, but has only been successful in Mexico and Brazil. It has a strong position in the UK, but this was achieved by buying the country’s fastest-growing retailer in 1999 for an enormous price tag, and not changing very much subsequently. Its operations in emerging markets lag way behind Tesco and Carrefour. It invested vast sums in trying to build a German operation, but eventually ended up closing it down because it couldn’t compete with Aldi and Lidl (who pay vastly higher wages but run a more efficient supply chain – and the former is increasingly doing so in the US as well).

Wal-Mart excels at regulatory capture and union-busting, and is good enough at being a retailer to make a lot of money in markets where it’s established a dominant position. Unlike the companies on my list above, it isn’t good enough at being a retailer (in terms of branding, store experience and supply chain management) to establish major positions in markets where it starts without a dominant position. And “being just about competent enough that you can keep your monopoly alive” isn’t really a highly exportable trait, or a particularly beneficial one to The World At Large.

Although on the other hand, it is a pretty good description of the area where big US businesses are actual world-leaders, whether we’re talking healthcare, oil, telecoms or software…

Crooked Timber comments deliver, again

From a post on the correlation between studying engineering and becoming a violent extremist, commenter Tom Bach:

Hitler was notoriously lazy and profoundly ignorant; in large measure because he never studied anything and read less. He enjoyed rambling monologues filled with made up facts.

Commenter Stuart:

It sounds as if Hitler had been born a few decades later he might now have a show on Fox News.

As if he’d know

Rupert Murdoch to the FTC:

Technology makes it cheap and easy to distribute news for anyone with Internet access, but producing journalism is expensive.

True. Phones don’t just illegally tap themselves, and making police investigations magically disappear is also an expensive business…

However, his implied public service argument falls down on an obvious point: none of the expensive reporting the soon-to-be-paywalled News of the World does is of any benefit whatsoever to anyone. So a footballer’s dad is willing to buy some Bolivian marching powder, or a vicar shagged a tart; see my rock of indifference the size of the Ritz.

On the other hand, the reporting that the non-paywalled New York Times did into the NotW’s crooked ways, and super-dodgy relationship with the Metropolitan Police, is well worth anyone’s money. Funny the way that tends to work…

What I’ve been up to, week ending 2010-09-05

  • RT @legaleagleMHM Just opened wheelie bin and a WASP flew out. Who on earth would have put a wasp in a wheelie bin; what's world coming to? #
  • Thing which perplexes me about this TBL piece: how the hell did they find anywhere in Aus that even serves hot curry? http://bit.ly/aGAFvV #
  • I mean, if you go to a curry house, and order 'hot with extra hot', you get something that'd be a 'medium' in the UK… #
  • …and don't get me started on pizzas. Or Mexican food. Yes, I do want 'hot' sauce and jalopenos. No, it still won't taste of anything #rant #
  • Hang on – who *doesn't* sleep with their mobile by their bed? http://bit.ly/blw0WY #andImover30 #
  • Also, Arnie's nickname is the Gubernator. 'Governator' doesn't work. Eejits: http://bit.ly/d1q5eK #
  • 74% of Australians say they drink in a pub, bar or restaurant twice a month or less often than that. In other news, people lie. #
  • Sorry, did a Liberal Senator really just prank-call Rob Oakeshott's wife and pretend to be the Devil? #ausvotes #WTF #noseriouslyWTF #
  • Ok, apparently the Senator in question thought it was one of Oakeshott's kids on the line, not his wife. #sothatsOKthen #ausvotes #
  • Good work, #Kmart, for selling me a $9 toaster. Was almost tempted to buy some $10 organic bread to toast in it… #
  • Stick a report-related fork in me, I'm done. Well, apart from the bit I need to do tomorrow #ebz http://fallenlondon.com/c/234250 #
  • Ok, infinite mega-work is finished and it's a beautiful day – so I'm on a train to IKEA. Doh. At least I get to go with @chrissiem… #
  • I say "on a train", what I mean is "stuck at Town Hall for half an hour". 30 min frequency on daytime urban rail? Seriously, wtf? #cityfail #
  • JG is correct: RT @annabelcrabb: JG says this Parliament is what the people have chosen, and MPs are obliged to try to make it work. #
  • After seven months of living in this country, I've worked out why the Internet varies apparently-randomly between 'fast' and 'dreadful' #
  • Domestic or domestically-cached (i.e. popular foreign) = fast, because (even pre-NBN) it's better than UK ISPs. International is terrible. #
  • …so if I were the next govt's advisor, I'd run a new big cable to Singapore and another one to LA, rather than cocking about domestically. #
  • I love it when TV incidental music is aces (Teachers on ABC2 played out with Boy With The Arab Strap). Also, remember when C4 was good? #
  • I realise the only people who'll get the last tweet are Britpop fans who're Anglophile Aussies or Aussie Brits. That's my niche, baby. #
  • 'Unfollow' posts are tedious, but wanna note realising that 'voice of rank and file' cop World Weary Detective http://bit.ly/ajdt2z is cunt #

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