The Steroid-Pumped Version of “Taxes Are for the Little People” – Daniel J. Mitchell –

The Steroid-Pumped Version of “Taxes Are for the Little People” – Daniel J. Mitchell –

I’m not a big fan of international bureaucracies, mostly because they always seem to promote bad policy such as higher tax rates.

To add insult to injury, the bureaucrats who work at these organizations have created very comfortable lives for themselves while the rest of us pick up the tab, as documented here and here.

But the ultimate insult is that the overpaid and pampered bureaucrats receive tax-free salaries while they jet-set around the world pushing for higher taxes.

Yes, you read correctly. They demand higher taxes for everyone else, but their bloated salaries are exempt!

Here’s some of what the UK-based Guardian just reported about the head of the IMF.

“Taxes for thee, but not for me”

Christine Lagarde, the IMF boss who caused international outrage after she suggested in an interview with the Guardian on Friday that beleaguered Greeks might do well to pay their taxes, pays no taxes, it has emerged. As an official of an international institution, her salary of $467,940 (£298,675) a year plus $83,760 additional allowance a year is not subject to any taxes. …Lagarde, 56, receives a pay and benefits package worth more than American president Barack Obama earns from the United States government, and he pays taxes on it. The same applies to nearly all United Nations employees.

To make matters worse, these globe-trotting bureaucrats have figured out all sorts of ways of padding their pay.

Base salaries range from $46,000 to $80,521. Senior salaries range between $95,394 and $123,033 but these are topped up with adjustments for the cost of living in different countries. A UN worker based in Geneva, for example, will see their base salary increased by 106%, in Bonn by 50.6%, Paris 62% and Peshawar 38.6%. Even in Juba, the capital of South Sudan, one of the poorest areas of the world, a UN employee’s salary will be increased by 53.2%. Other benefits include rent subsidies, dependency allowances for spouses and children, education grants for school-age children and travel and shipping expenses, as well as subsidised medical insurance. For many years critics have complained that IMF, World Bank, and United Nations employees are able to live large at international taxpayers’ expense.

So how do these bureaucrats justify their lavish salaries and gold-plated benefits?

Officials from the various organisations have long maintained that the high salaries are a way of attracting talent from the private sector. In fact, most senior employees are recruited from government posts.

Kudos to the Guardian for exposing this nonsense, particularly the fraudulent claim that lavish compensation packages are need to attract and retain these incompetent bureaucrats.

But let me add to the Guardian’s analysis. In a recent email exchange with several people, I addressed this issue, specifically commenting on whether the head of the IMF, Ms. Lagarde, should get a giant salary because she could earn more money in the private sector. I wrote that there were two responses to this assertion.

1. She has genuine skills as a wealth creator. In which case, we should force her out of the IMF as soon as possible so her talents can be used productively rather than destructively.

2. She can get big bucks by trading on her connections and entering the world of corporatism. Work for KPMG, or the Carlyle Group, or some other entity that specializes in getting favorable deals for the elite. That’s not the private sector.

In either case, her salary in her current position should be zero. Unless we think she should be paid the value of her marginal product, in which case she probably owes the world’s taxpayers several hundred billion dollars.

In other words, it doesn’t matter whether Ms. Largarde’s ability to earn lots of money is the result of genuine ability or cronyism. Since the IMF is pursuing bad policy, her value in that position is below zero.

My Cato colleague Richard Rahn was correct when he wrote that it is the ultimate hypocrisy for tax-free bureaucrats to lobby for higher taxes on the rest of us.

And that’s why defunding these parasitic international bureaucracies is not just good fiscal policy and good economic policy, it’s also the morally just policy.

The death rattle of Democracy – Tea Party Nation

The death rattle of Democracy – Tea Party Nation.

Posted by Judson Phillips

Watching a Democracy die is not a pleasant experience.  The only thing worse is watching one die and having most people not even realize a Democracy just died.

 Which Democracy died?

 Greece, of course.

 Greece is a cautionary tale for America and every other nation in the world.  Perhaps the question we have to ask, is Greece even a nation any more?

 The obvious reaction to that question is, of course it is.  The Greek flag still flies.  There are Greek borders.  The Greek government and Parliament are still there.

 All true.

 But for all intents and purposes, Greece is now a state in receivership. 

 The defining characteristic of a nation state is sovereignty.  The people of the nation state, through their government make the decisions for that state. 

 Greece has lost that.

 Greece has been on a program of unrestrained spending and borrowing for years.  Now the debt has come due.  The European Union and the International Monetary Fund have dictated to Greece what Greece must do to receive a bail out.  In theory Greece had a choice, but it is about the same choice someone has when a loan shark shows up and says pay up or I’ll break your legs.

 The Greek Parliament approved the EU/IMF ordered austerity measures while Greeks rioted in the streets.   The demands from the EU and IMF included radical cuts in social spending, minimum wage, government jobs and pensions. 

 Truthfully, these changes should have been made years ago.   These changes are necessary if Greece as a nation is to survive.  Greece is the poster child for Obamanomics.  The Greeks practiced Obamanomics while Obama was still voting “present” in the Illinois legislature.

 The problem for Greece is that now the real power of the Greek state is no longer in Athens.  The people now calling the shots are the European bankers in Brussels. 

 If you believe in grand conspiracies, Greece is the dry run for what will happen to America when Obama’s economic collapse finally comes about.  If you do not believe in conspiracies, you can see America’s future in the streets of Athens.

 America is going down the road that Greece has already gone down.  We fund the IMF.  If the European Union is hesitant to bailout a tiny economy like the Greek economy, does anyone really think they will help America if America ends up like Greece?  

 To put this in perspective, as of 2010, Greece’s GDP was about the same as the GDP of Dallas-Ft. Worth

 The sum of all the goods and services produced by Greece was about the same as the sum of all the goods and services produced by the fourth largest metropolitan area in the United States.

 Watching the Greek tragedy brings up two very important questions.  If we do not stop Obama and his axis of fiscal evil, who is going to bail out America and even if we can find someone who can bail America out, what conditions will they impose?

 Greeks seem more concerned about their own personal budgets being cut.  Takers not makers dominate the Greek economy.   What should scare them is they are no longer a free nation.  The Greek nation is now controlled, not by their politicians but by the EU and the IMF. 

 How will Americans react to being ordered to change our lives in order to receive a bailout from Europe or China?

 If we do not change our policies, this is exactly what will happen. 

 Does anyone want to see what happens with that nightmare scenario?

 I don’t.