Look who's leading the world in reducing greenhouse gas emissions. Stephen Moore writes:
Take a wild guess what country is reducing its greenhouse gas emissions the most? Canada? Britain? France? India? Germany? Japan? No, no, no, no, no, and no.
The answer to that question is the United States of America. Wow! How can that be? This must be a misprint. Fake news. America never signed the Kyoto Protocol some two decades ago. We never enacted a carbon tax. We don't have a cap-and-trade carbon emission program. That environmental villain Donald Trump pulled America out of the Paris climate accord that was signed by almost the entire rest of the civilized world.
Yet the latest world climate report from the BP Statistical Review of World Energy finds that in 2017, America reduced its carbon emissions by 0.5 percent, the most of all major countries. That's especially impressive given that our economy grew by nearly 3 percent—so we had more growth and less pollution—the best of all worlds.
The major reason for the reduced pollution levels is the shale oil and gas revolution that is transitioning the world to cheap and clean natural gas for electric power generation.
Meanwhile, as our emissions fell, the pollution levels rose internationally and by a larger amount than in previous years. So much for the rest of the world going green.
[Stephen Moore, "New Report Shows US, Not Countries Promoting Climate Change Activism, Reducing Emissions the Most," The Daily Signal, August 24]
The false promises of a carbon tax. Carbon taxes were supposed to be a way to address climate change without excessive bureaucracy and red tape. But it turns out, as Oren Cass writes, that they are just a way to increase taxes:
The so-called "conservative" case for a carbon tax has always been a shell game. Point out that such proposals might not meaningfully address climate change, and defenders claim that they'll boost economic growth. Note that they won't boost growth and you're told that they will save the planet.
The confusion abounds: carbon tax proposals are sold as the key to reducing burdensome red tape, even though that tape can be (and has been) cut absent a sweeping new tax regime. The tax is supposed to be "revenue neutral" thanks to offsetting tax cuts elsewhere—even as that same
revenue gets promised to households in the form of a "dividend." Through careful calibration, the tax is meant to offset efficiently the externalities associated with carbon-dioxide emissions — although no reliable estimate of those externalities exists. As I observed more than three years ago: "If we grabbed the wrists of carbon-tax advocates and demanded they turn over the shells all at once, we would find there was never a marble to begin with."
A new piece of legislation bears out that warning. Congressman Carlos Curbelo (R-FL) has introduced a carbon tax bill with none of the properties that proponents had promised to conservatives. It raises taxes dramatically, while refunding little of the money back to households. It slows economic growth. It does not eliminate EPA authority over greenhouse gases or address other climate-related regulations. It will increase if arbitrary targets are not met. But the criers of the conservative carbon tax aren't outraged, or even opposed. They are delighted. [...]
This mess was the inevitable result of endorsing carbon taxes as a concept without ever devising a viable proposal.
[Oren Cass, "There Is No Such Thing as a Conservative Carbon Tax," Economics 21, August 20]
Every house needs a foundation. Measurements of economic freedom (such as The Heritage Foundation's Index of Economic Freedom and the Fraser Institute's Economic Freedom of the World report) are composed of scores for different policy areas. In thinking about economic freedom, though, it might be helpful to consider how the different policy areas work in conjunction with each other, as Dan Mitchell suggests:
Generally speaking, the various policies are equally weighted. Which, based on a lot of research, is correct. But I wonder if the various policies are equal in different ways. I sometimes use a simple analogy in speeches, equating economic policy with the soundness of a house.
The quality of governance is akin to the foundation, because just as a very nice house won't last long if built on a shaky foundation, good policies won't generate much prosperity if the legal system is corrupt and property rights aren't protected.
Monetary policy is akin to the framework of the house because it is also systemically important. Most recessions (and the false booms that precede downturns) are caused by misguided central bank tinkering.
Finally, [...] trade policy, regulatory policy, and fiscal policy are the floors of the house. They determine the livability of the house, whereas monetary policy and quality of governance determine the structural soundness of the house.
[Dan Mitchell, "Trump and the Economy: How Strong and Who Gets Credit?" International Liberty, August 24]
Will Russia get a naval base in East Africa? Somaliland, unlike the rest of Somali, has a functioning, stable government. It deserves to have its independence recognized, and, writes Michael Rubin, doing so soon could prevent Russia from obtaining a naval base there. Rubin writes:
In August 1940, Italian fascist forces invaded British Somaliland and overwhelmed the small British garrison there. Still, the Italians held the territory for less than a year before the British reconquered it. In 1960, however, both the British and Italians agreed to grant independence to their respective Somali territories. British Somaliland was for five days its own independent republic, before merging with what had been Italian Somaliland (and later the "Trust Territory of Somaliland under Italian administration") to become the Somali Republic, or Somalia. The two units had an uneasy relationship over subsequent decades. In 1991, when the Somali government collapsed, the former British Somaliland declared its independence. For the past 27 years, it has functioned as an independent state even without formal international recognition.
Somaliland deserves independence
The point of this history lesson? Somaliland has been separate from Somalia far longer than it has been part of Somalia. In many ways, it is like Taiwan, which China claims as its own even though the period of direct Chinese rule over Taiwan was surprisingly short — decades rather than centuries. Like Taiwan, Somaliland has developed its own political culture distinct from its larger neighbor. Freedom House, for example, ranks Somaliland as partly free, a better ranking than Somalia, which is not free. Somaliland has had its ups and downs, but it has remained politically stable and secure. It has its own currency, runs its own cellphone network, and is accessible by direct, regularly scheduled passenger flights from the United Arab Emirates and Ethiopia. It has never allowed its territory to become a safe haven for pirates, as the autonomous Somali Puntland region did, nor did it become a safe haven for al Qaeda affiliates, as the remainder of Somalia has. Unlike in Somalia proper, where most businessmen and aid workers must live behind blast walls at the international airport, Westerners are safe in Somaliland. [...]
Now Russia may be making a play for Somaliland: While the Somaliland government is playing coy, local media reported this past spring that Russia was seeking to build a small naval base and air station in the Somaliland port city of Zeila in exchange for recognition. For Somaliland, that would be a good deal, but for the United States it would be a self-inflicted strategic wound, coinciding as it does with Russian efforts to flip Egypt, which resents what it perceives to be congressional and State Department hostility toward it.
[Michael Rubin, "The U.S. Needs to Recognize Somaliland Before Russia Does," American Enterprise Institute, August 22]
The power to tax is the power to destroy. In South Dakota v. Wayfair, the Supreme Court threw out its physical presence standard, allowing states to tax commerce between their citizens and retailers located beyond their borders. How will states use this new taxing power? As Andrew Moylan and Andrew Wilford write, lawmakers who put new tax bills forward hastily will risk crushing the smaller internet retailers and the competition they provide:
As the Court notes, the internet has served as a means of allowing new retailers to reach the same consumer base that established nationwide retailers already have access to. It can be extremely difficult for new retailers to contend with the complexity inherent in a system with 45 states (and D.C.) having their own sales tax regimes and an estimated 12,000 tax jurisdictions.
Tax compliance is already a greater burden for smaller retailers. A 2014 study by the National Association of Manufacturers found that the cost of tax compliance was over $1,500 per employee for businesses with fewer than 50 employees, but under $700 for businesses with more than 100 employees.
Considering that many affected businesses will be small groups selling products on platforms like Etsy, this cost could be prohibitive. The giants of retail, such as Amazon and Walmart, already have physical presence in the form of stores or distribution warehouses spread across the country. This means that they already collected sales tax, and the Wayfair decision won't change their tax bills much. It will be the small retailers that have to invest the substantial time and effort into complying with multiple tax regimes, or possibly change their business models. [...]
In positively citing the small seller exception in South Dakota's law, the Court gave some support to the notion that states ought to distinguish between large businesses with many resources to handle tax compliance and smaller ones that would be crippled by complex tax obligations. Even this guidance is subject to dispute, however, since it is quite broad and not contained in the actual holding of the Court.
[Andrew Moylan and Andrew Wilford, "South Dakota v. Wayfair: What it Means," National Taxpayers Union Foundation, August 23]
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