Can NZ double migrant investors and entrepreneurs from $3.5 billion to $7 billion at no cost to taxpayers!?
07 Jul 2015 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, economics of bureaucracy, entrepreneurship, income redistribution, industrial organisation, managerial economics, organisational economics, politics - New Zealand, Public Choice, public economics, rentseeking, survivor principle Tags: corporate welfare, entrepreneurial alertness, industry policy, industry targeting, The fatal conceit, The pretence to knowledge
I didn’t notice any discussion in the Cabinet paper of a government doing this before and whether their investment promotion efforts succeeded or not. This latest policy proposal cannot even count as evidence-based policy dreaming, much less a serious contribution to public policy.
Hoping to double incoming foreign investor and entrepreneur migration from $3.5 billion to $7 billion inside three years without spending any extra public money is breathless public policy making. I am sure lots of governments previously tried to get something for nothing.
It will be helpful if ministers pointed to where overseas governments have been successful in doubling foreign investment by simply reprioritising existing investment promotion efforts.
There are at least 2,500 national, provincial and city investment promotion agencies out. Some of them must have been subject to some sort of evaluation as to their success.
This overseas literature review would be in addition to the recent findings of the Ministry of Economic Development about the poor performance and perhaps futility of the foreign direct investment promotion by New Zealand Trade and Enterprise.
Imagine how much bigger a boost in foreign investor and entrepreneur migration lays before us if actual real new money was put on the table.
via beehive.govt.nz – Strategy targets international investors and Evaluation of NZTE investment support activities [929 KB PDF]
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Fabian Society and Church of England caught out as hypocrites on London Living Wage of £18,000
06 Jul 2015 Leave a comment
in income redistribution, industrial organisation, labour economics, minimum wage, poverty and inequality, Public Choice, rentseeking, survivor principle Tags: British economy, British politics, Church of England, expressive voting, Fabian Society, hard budget constraints, Left-wing hypocrisy, living wage, market selection
Doing business in the PIGS (Portugal, Italy, Greece and Spain) – World Bank rankings
03 Jul 2015 Leave a comment
in applied price theory, applied welfare economics, currency unions, economic growth, economics of bureaucracy, economics of regulation, Euro crisis, health and safety, income redistribution, industrial organisation, labour economics, law and economics, minimum wage, occupational regulation, property rights, Public Choice, rentseeking, survivor principle, unions, welfare reform Tags: cost of doing business, Eurosclerosis, Greece, Italy, PIGS, Portugal, Spain
Figure 1: Doing Business rankings, PIGS, 2014
Source: World Bank Doing Business 2015.
All in all, Italy and Greece are a dog of a place to enforce a contract. The long-suffering taxpayer is better off paying taxes in Greece than in Italy! Not surprisingly, trading across borders is the greatest strength in doing business in the PIGS. The European Union does have some benefits.
Figure 2: Doing Business rankings, Greece and Italy, 2014
Source: World Bank Doing Business 2015.
All in all, Italy and Greece are equally bad places to do business and Italy is much worse when it comes to taxes. About the only saving graces of Italy is the registration of property and the protection of minority interests in companies.
Figure 3: Doing Business rankings, Spain and Portugal, 2014
Source: World Bank Doing Business 2015.
Spain and in particular Portugal are much better places to do business than Italy and Greece.
A blow to Director’s Law?
03 Jul 2015 Leave a comment
in constitutional political economy, income redistribution, Public Choice, public economics, rentseeking Tags: British economy, British politics, Director's Law, expressive voting, growth of government, median voter theorem, size of government
No, most U.K. homes do not get more in benefits than they pay in tax ow.ly/3y0nEo http://t.co/LaXvGa8ro2—
Bloomberg VisualData (@BBGVisualData) July 02, 2015
…the poorest 30 percent of households receive significantly more in cash benefits than they pay in tax. The next 10 percent receive on average £596 pounds a year more in cash benefits than they pay in tax, and the top 60 percent all pay more in tax than they get back in cash benefits.
New data from the ONS show the huge growth in state dependency under New Labour. Analysis at cps.org.uk/files/factshee… http://t.co/OLjRoxt3eg—
CPS Think Tank (@CPSThinkTank) June 29, 2015
Top marginal income tax rate throughout the 20th century
29 Jun 2015 Leave a comment
in economic history, entrepreneurship, income redistribution, politics - USA, Public Choice, public economics, rentseeking Tags: Eurosclerosis, taxation and entrepreneurship, taxation and investment, taxation and the labour supply, top 1%
Piketty presents the changes in the top marginal income tax rate throughout the 20th century… #GCLIS http://t.co/sFpV0ypC5C—
LIS (@lisdata) April 16, 2014
Does the NZ Superannuation Fund recover the deadweight cost of the taxes that funded it?
24 Jun 2015 Leave a comment
in comparative institutional analysis, financial economics, income redistribution, politics - New Zealand, Public Choice, public economics Tags: ageing society, demographic crisis, New Zealand superannuation fund, old age pensions, social insurance, sovereign wealth funds, welfare state
The $30 billion New Zealand Superannuation Fund is the best performing sovereign wealth fund over the past five years, generating returns of more than 17 per cent a year.
Those returns easily beat all other sovereign wealth funds that publish their figures, according to a global study by JP Morgan. In the last three years alone, the fund returned an average of 21 per cent a year.
Good thing to do considering that the default deadweight cost of taxation is put by that Treasury to be 20%:
As a general rule, deadweight losses should be included if they are of sufficient size relative to the overall costs and benefits of the proposal that they are capable of altering the decision as to whether or not to proceed with the proposal.
Having said this, deadweight losses are notoriously difficult to quantify. Estimates vary from 14% up to 50% of the revenue collected.
Treasury suggests a rate of 20% as a default deadweight loss value in the absence of an alternative evidence based value. Thus public expenditures should be multiplied by a factor of 1.2 prior to discounting to incorporate the effects of deadweight loss.
This deadweight cost of taxation includes funds contributed to New Zealand government owned investment funds. In a speech last week, the Super Fund chairman Gavin Walker warned that the recent high returns were unlikely to continue in the long-term:
The last few years are likely to have been among the best years the fund will experience for some time,” he said. “On average and over the long-term we expect to earn the rather less exciting figure of 8 per cent [per annum] – but which will still provide a handsome return to New Zealander stakeholders.
The New Zealand Superannuation Fund must beat the market every single year to make up for the deadweight cost of its funding, the usual interest rate on borrowed funds, a premium for the investment risk added to the Crown’s portfolio and the cost to New Zealand’s growth rate of higher than otherwise taxes on income, entrepreneurship and investment.
Most mutual funds still can't beat their benchmark read.bi/1GkTig1 http://t.co/r7ezoDGJbV—
BI Chart of the Day (@chartoftheday) June 03, 2015
Millennials’ Political Views Don’t Make Any Sense
22 Jun 2015 Leave a comment
in applied price theory, comparative institutional analysis, constitutional political economy, economics of information, economics of media and culture, income redistribution, politics - USA, Public Choice, rentseeking Tags: antiforeign bias, antimarket bias, expressive voting, make-work bias, rational ignorance, rational irrationality, voter demographics
Millennial politics is simple, really. Young people support big government, unless it costs any more money. They’re for smaller government, unless budget cuts scratch a program they’ve heard of. They’d like Washington to fix everything, just so long as it doesn’t run anything.
Young people lean way left on issues like gay marriage, pot, and immigration. On abortion and gun control, they swim closer to the rest of the electorate.
But on economics, they’re all over the map. You get the sense, reading the Reason Foundation and Pew studies, that a savvy pollster could trick a young person into supporting basically any economic policy in the world with the right combination of triggers. Conservative and liberal partisans can cherry-pick this survey to paint Millennials as whatever ideology they want.
On spending:
Conservatives can say: 65 percent of Millennials would like to cut spending.
Liberals can say: 62 percent would like to spend more on infrastructure and jobs.On taxes:
Conservatives can say: 58 percent of Millennials want to cut taxes overall.
Liberals can say: 66 percent want to raise taxes on the wealthy.On government’s role in our lives:
Conservatives can say: 66 percent of Millennials say that “when something is funded by the government, it is usually inefficient and wasteful.”
Liberals can say: More than two-thirds think the government should guarantee food, shelter, and a living wage.On government size:
Conservatives can say: 57 percent want smaller government with fewer services (if you mention the magic word “taxes”).
Liberals can say: 54 percent want larger government with more services (if you don’t mention “taxes”).
via Millennials’ Political Views Don’t Make Any Sense – The Atlantic and This poll proves that millennials have totally incoherent political views – Vox.
Why do these top 0.1 percenters get a pass from the Occupied Movement and Twitter Left?
15 Jun 2015 Leave a comment
in applied welfare economics, economics of media and culture, income redistribution, movies, politics - USA, poverty and inequality, Public Choice, TV shows Tags: comedy, Left-wing hypocrisy, Leftover Left, Occupy Wall Street, top 1%, Twitter left
The 25 richest comedians (or why not to go into standup comedy) from @randal_olson randalolson.com/2015/03/04/top… http://t.co/cp3lSnuPOf—
Tyler Vigen (@TylerVigen) March 17, 2015
Mises on why economics analysis is so unpopular
14 Jun 2015 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, economics of bureaucracy, income redistribution, Ludwig von Mises, Public Choice, rentseeking Tags: antiforeign bias, antimarket bias, expressive voting, green rent seeking, makework bias, NIMBYs, rational ignorance, rational irrationality
Milton Friedman on the essence of the Age of the Worker
13 Jun 2015 Leave a comment
in applied price theory, applied welfare economics, economic growth, economic history, health and safety, income redistribution, industrial organisation, labour economics, labour supply, macroeconomics, Milton Friedman, occupational choice, politics - Australia, politics - New Zealand, politics - USA, Public Choice, rentseeking, unions Tags: competition and monopoly, The Great Enrichment, union power, union wage premium
Utopia, you are standing in it! 
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