Jon Margolis is a smart guy, and his blog is always interesting reading. He does suffer from that most common malady of journalists, and particularly journalist-pundit hybrids; that is, the need to demonstrate his independence and objectivity by making sure he never bops right-wing silliness without smacking the left as well. As though the cosmic balance must be restored against some arbitrary, moderate-fulcrum-point. The truth is simply, of course, that sometimes right wingers just say (and believe) silly things, and silly things are silly all on their own.
But nobody’s perfect, right? Margolis is a wise fellow who knows a lot of stuff, and that’s what makes things like this such fun reading:
Conveniently illustrating the absurdity of (“the ‘businesses will run away’ delusion”), the folks at the Vermont Tiger web site recently warned against raising taxes because ” people will leave a state that is failing economically And they will head for a place where the business environment is friendly. Like North Carolina.”
North Carolina? Give us a break. The “business environment” may be great down there. The economy is a disaster. With a 10.8 percent unemployment rate (Vermont’s is 7.2), North Carolina is the state that’s “failing economically.”
Remember, these are the folks who not long ago wanted Vermont to follow the economic model of Ireland. Who, in fact, may have named their site after the “Celtic Tiger,” nickname for the Irish economic boom of not long ago.
The inanity of this comparison boggles the mind. Ireland is a sovereign nation with control of its currency. It did ease financial regulation and cut taxes in the early 1990s, but it increased spending, largely on education, mooching off the European Union and going into debt.
Oh, and its boom has gone bust, largely because it is under-taxed and under-regulated (and possibly corrupt; see here). No intent here to trash the folks at Vermont Tiger, who seem civilized and who sometimes make sense. But their economic analyses should be viewed through the filter of their Irish delusion.
No response yet at the Tiger. Maybe they’re just hoping if they ignore Margolis, he’ll go away. Or maybe they simply don’t have a good response.
In any event, Margolis has hinted he’ll restore the cosmic balance again by beating up on the left tomorrow. Heh. Maybe it’ll be GMD.
Not that it’s central to the point, but Ireland thinks it has gone bust not because they’re undertaxed and under-regulated, but because they depended on U.S.-backed financing for their real estate-driven boom. When the financing dried up, so did the bom.
And while the Irish government is most definitely plagued by corruption, their corruption seems almost innocent in comparison with U.S. corruption. It’s mostly about petty (or petit) bribes and influence. I actually find it refreshing that the Irish are still upset about it. In the U.S. we’ve institutionalized it.
But I’ve always thought Celtic Tiger’s (and other rightists) rush to used Ireland’s economy as a model for success is kind of odd. I mean, these are the same people who are constantly whining about “socialism.” Well guess what? The Irish economy is controlled under a typical European democratic socialist system.
If you want an “Irish” economy, you’ll have to start where the Irish started: Socialized medicine, first of all, so that you have a healthy population; second, socialized education, so you’ll have a highly educated population to earn the money to pay the taxes you’ll need to support your socialist system. And welfare system (bad connotation here, but it doesn’t mean what most Americans think it means) so that, among other things, the elderly and unemployed will not fall into sub-poverty living, and there’s help for vocational training.
And how are you going to pay for all this health, education, and welfare? Taxes. The Irish pay a lot of taxes. VAT, for one, Ireland has the highest VAT in Europe. And taxes for cars that are based on the size of the engine, the bigger the engine the higher the tax – if you want to own a pickup in Ireland, it’s considered a commercial vehicle and you pay a higher sales tax, and you’ll pay a higher road tax. Doesn’t matter that it’s for personal use. And you’ll pay higher insurance for it, too, and there’s a tax on that. The Irish pay an annual tax to own a TV. There are two income tax rates in Ireland, 20% and 41%, and everyone pays – it is taken directly out of your pay, and you don’t file a tax return at the end of the year to get any refund.
These would-be Hibernophiles that think Ireland is some kind of low-tax business haven are not looking at the whole picture. You get what you pay for. And you have to pay first.