Thoughts on Freedom

Greetings,

The name is Tex. I have my own website over at whackingday.com. John Humphreys kindly invited me to join up here and sing the praises of gay porn and the Iraq War. Or something like that.

Anyhow, by way of a self-deprecating introduction, here are some brief factoids about me:

-> I am 33 years old, live in Canberra, and last week bought my first home.

-> I came to the conclusion that most things I believed up until 2-3 years ago were complete crap. I’m too embarrassed to list the many stupid ideas I supported, though in the interests of disclosure, I will mention the words “gun control” and “medicare”.

-> “Important” books give me a headache. I know the other authors here experience a ten-inch boner at the thought of reading Ayn Rand, Albert Jay Nock, Robert Nozick, von Mises and all that crap, but just the thought of reading this sludge makes my bowels tremble.

-> My view of economics and liberty in general is unapologetically simple: voluntary transaction is good, government regulation thereof is bad. I keep this algorithm simple for two reasons: 1) it works, 2) all complicated economic theory is pretty much an extension of the general rule. There, I just saved you from reading 2000 pages of Chicago school horseshit.

-> Here’s an issue most people reading this will not agree with: my views on the Middle East & Israel make Bibi Netanyahu look like Cindy Sheehan. I don’t give a rat’s arse about the so-called “Palestinians” or their “occupied territories”. They have no genuine historical beef, other than getting their arses kicked in wars they keep losing. I don’t cry for Nazis, even ones who wave the Koran instead of Mein Kampf.

-> In a similar vein, I support the Iraq war, and am one of the few people on earth not pissing their pants over the way it is going. I may elaborate later.

-> I don’t belong to any political party. Well, not yet. I keep meaning to fax off a membership form for the LDP, but I never get around to it.

-> I work in the higher education sector in the field of asset management.

-> I may have single-handedly destroyed the political career - and probably the sanity - of Victorian Greens candidate Thom Lyons.

-> Monica Belluci is the world’s biggest babe.

-> Vindaloo curry is the food of the gods.

Well, that’s all for now. I’ll do a ‘real’ post sometime in the next few days.

I was re-reading over some old articles I have collected and I thought this one was worthy of discussion. Broadly it relates to the manner in which taxation keeps poor people in poor countries impoverished. In particular the article looks at Ethiopia.

http://wanniski.com/showarticle.asp?articleid=3028

But what about the starvation in the countryside. Is it all “drought”? Here I find in the tax material supplied to me by Charlie Rangel, which of course he has never read, is the tax code on agriculture:

(a) Computation of taxable income Income from agricultural activities is usually calculated by reference to the price of the crop before harvest. If the crop is sold, the selling price is used as the basis for assessment.
(b) Special deductions for farmers When a farmer’s income exceeds ETB 600 [$68], he is entitled to make the following deductions from gross income in order to determine taxable income:
– any fee payable (e.g. rural land fee);
– all costs incurred in the production of the farmer’s income;
– depreciation of movable and immovable assets used in the agricultural activities…

(c) Rates of tax

Taxable income (ETB) Rate (%)

Up to 600 ($6 10%
Over 36000 ($4235) 89%

That’s right. A marginal tax rate on agricultural profits of 89% at $4,235. The tax system in Ethiopia is designed specifically to bring about the starvation of the entire population of 67 million. Can you believe a “corporate farm” that has a profit of $4,235 in annual income must pay the government 89% of any dollar of profits over and above that amount? How can this happen? This is of course outside the realm of economics and deeply into the realm of politics.

The dollar figures are US dollars.

Lets say you are an Ethiopian farmer. If you decide to invest some time, effort and resources improving your output then you will assume all the risk. However if you are successful the government will assume 89% of the benefit. In such a political environment it rationally makes more sence to wait for the government to make an investment rather than take the risk yourself. As a result nobody every builds any buffer to deal with the bad years. What makes this even more tragic is that Ethiopia is a fertile country that could be a bread basket if policy permitted.