RE: [lpsf-discuss] Trade / Monopolies

Dear Celine,

Tariffs on imports aren't really the problem. Tariffs, if used correctly
as an income generation devise are a self-limiting tax. That is, if the
tax is too high, the revenue goes down. However when tariffs are used
not to raise revenue but rather to restrain trade, then there is a
problem. Hong Kong doesn't do that.

I'm afraid asking for the details of how American, Eastern Europe and
South American got from rich to poor is more than I can do. However, the
article below covers why Lithuania is the fasting growing economy in
Europe. There's another article about which US States are doing best
economically and why.

I didn't hear anyone say that Japan lowered any taxes and regulations,
it simply had less of them then that later. I still disagree that the
government made the investments. Business people working closely in a
cooperative governmental forum decided to use money they were paying
into the system for their own purposes. Sure there were politics and the
like but it's not like the government generated the money and made the
decisions. I think you are giving the Japanese government too much
credit and not giving enough to the brilliant Japanese business people
who understood the advantage of working together strategically. However,
when faced with a bloated welfare state and competition from abroad,
they are struggling.

My Japanese business friends say the reason for the banking crisis was
that Japanese people are uncomfortable with foreigners. So they did not
diversify their investments outside of Japan, instead preferring to bid
up Japanese investments higher and higher to the point where they were
completely unrealistic and vulnerable. So when the market crashed, the
losses were so great that there will probably not be even one
international Japanese bank remaining according to my friends.

The bubbles in Asia were not caused by outside investments. They were
caused by speculation about future purchasing power and productivity of
the region. This led to bad investments on the part of private investors
that corrected in time. That's a big difference.

Technology is the industry that is least influenced by government.
That's why the quality keeps going up and price keeps going down.
Government is a big consumer of technology but relative to the total
capital, their "investment" in minimal. I'll try to dig up those



A new study by the Tax Foundation ranks the 50 states based on
how "business-friendly" their tax policies were in early 2003.

Because taxes affect business decisions, job creation and
retention, plant location, competition and the long-term health
of a state's economy, each state is constantly competing with its
neighbors to attract new companies with tax break packages.

According to the rankings:

   o Wyoming, New Hampshire, Nevada, Colorado and Alaska have
       the most business-friendly tax systems in the United

   o Nebraska, Ohio, Arkansas, California and Mississippi have
       the most burdensome and complicated tax systems.

Other findings:

   o The most efficient and prosperous states are marked by tax
       neutrality -- favoring all business activity, not large
       companies over small ones or existing companies over

   o The least competitive tax systems are found in states with
       complex, multi-rate corporate and individual tax codes,
       high sales taxes, and tax burdens that have grown faster
       than citizens' income.

According to the authors, every tax change will affect a state's
competitiveness relative to neighboring states. Entrepreneurial
states can take advantage of the tax increases of their neighbors
to attract businesses and increase prosperity.

Source: Scott Hodge et al., "State Business Tax Climate Index,"
Background Paper No. 41, May 2003, Tax Foundation.

For text

For more on State Taxes and Economic Growth