John Allison on CNBC Worldwide Exchange

John Allison, former CEO & Chairman of BB&T talks to CNBC following the Ayn Rand Lecture he delivered for the Adam Smith Institute on the financial crisis. 

Government must stop meddling and leave pay decisions to shareholders

Elaine argues that demands for government intervention to limit executive pay are misguided. The WPP vote against Sir Martin Sorrell’s pay and other AGMs this spring has shown that shareholders can act – corporate governance is their responsibility. The only way that governments can improve corporate governance is by removing obstacles to shareholder action.

You can read the article in full on CityAM here.

Summary

Dr Elaine Sternberg writes in City AM on her latest report for the Adam Smith Institute. She argues that government are wrong to try to limit executive pay and should focus on maximising shareholder's freedom to govern their own corporations in their own ways. 

Time to end the age of malinvestment

Read the article at Spectator.co.uk here.

Summary

Dr Eamonn Butler writes in The Spectator Coffee House on Osborne's plans to offer £140bn to banks to lend money to firms and households. He argues the cure is the problem. The problem was cheap credit that caused huge malinvestment over many years. 

Trade negotiations are utterly pointless – we should declare free trade unilaterally

He argues in his blog that trade negotiations are pointless and that politicians don't realise that the point of trade is imports. Instead of arguing about the complications of trade barriers and negotiations we should be declaring global free trade. 

Read the article in full on Telegraph.co.uk here. 

Summary

ASI Senior Fellow Tim Worstall argues in Telegraph.co.uk that we should declare free trade unilaterally, rather than put up barriers to imports.

Opportunity to build 'bonfire of restrictions'

With greater economic freedom, Scotland could again be a jewel of the North, writes Madsen Pirie.

You can read the article in The Scotsman here. 

Summary

Dr Madsen Pirie writes in The Scotsman about the possibilty of an independent free-market Scotland. 

Tax Freedom Day 2012 will be 29 May

·     Tax Freedom Day falls two days later in 2012 as UK re-enters recession

·     Austerity measures cut the Cost of Government Day back to 23rd June, seven days earlier than in 2011

The UK's Tax Freedom Day – the day when Britons stop working for the Chancellor and start working for themselves – will fall on 29th May in 2012.

The Adam Smith Institute has calculated that, for 149 days of the year, every penny earned by the average UK resident will be taken by the government in tax. This year’s Tax Freedom Day falls two days later than it did in 2011. (Note: TFD was 28th May in 2011, and this year’s date includes the extra day for the leap year).
 
Tax Freedom Day falls later this year down to a number of factors. The double-dip recession, the VAT increase from last year, our high personal taxes, as well as fuel duty and stealth taxes, all mean that the government is taking a larger share of our hard-earned income. Britain’s tax burden is still too high and tax cuts are desperately needed to boost economic growth.
 
This year’s corporation tax receipts are a good example of how tax cuts can pay for themselves. There were large increases in tax revenue from onshore corporation tax, coinciding with the government’s cuts to the headline rate of corporation tax. Reductions in the corporation tax rate have brought the government higher revenues as more companies choose to invest in the UK. By stimulating growth and investment, tax cuts really can pay for themselves.
 
However, our Tax Freedom Day still falls long after the USA’s, on April 17th and Australia’s, on April 4th. Our only comfort is that our tax burden isn’t quite as high as France’s, which will have to wait until July to celebrate its own Tax Freedom Day. With Hollande now in power, that day could get even later in years to come.
 
Cost of Government Day

Tax Freedom Day only measures the money actually raised by the government in taxes, not the full amount it spends. The government borrows one pound for every four it raises in taxes, so if the full cost of government is considered the Cost of Government day, this would fall on 23rd June.
 
Last year’s Cost of Government day fell on 30th June, meaning that the government’s austerity measures have reduced the cost of government by 7 days. But, when we take into account the extra two days tax burden, the net effect of George Osborne’s austerity measures is a measly five days net cut in the burden faced by taxpayers. “A lot of work still needs to be done,” says the Institute, “ to bring down government borrowing and the Chancellor must make more tax cuts to allow greater economic growth.”

ASI's Director, Dr Eamonn Butler, says "Tax Freedom Day, which the Adam Smith Institute has been calculating for 25 years, is the plainest way to show what the tax burden really is. That is why the Treasury hates it. They of course want to conceal how much tax we pay, which is why they are so keen on stealth taxes."
 
"But we put in every tax, including stealth taxes  – income tax, national insurance, council tax, excise duties, air passenger taxes, fuel and vehicle taxes and all the rest – and show just how long the average person has to work to pay their share of them all. The stark truth is that this burden costs us all 149 days of hard labour every year. That's not how long a rich person has to work – it is the time the average person must labour for the tax collectors."
 
“In the Middle Ages a serf only had to work four months of the year for the feudal landlord, whereas in modern Britain people have to toil five months for Osborne’s tax gatherers.”
 
"An increasing number of economists believe that Britain's taxes are too high and are choking off recovery. Some politicians say they need to keep taxes high in order to balance the government's books. But the trouble with governments is that they always spend everything they raise in tax – and then as much more as they can get away with through borrowing. Just as the rest of us have had to cut back, so should the government. The UK economy would be a lot healthier for it."
 
Steve Baker, Conservative MP and member of the executive of the 1922 committee, adds: “Many congratulations to The Adam Smith Institute for making transparent the cost of government and just how far government lives beyond its means. It's time to ask whether society is well served by such a huge state or whether we wouldn't all be better off with institutions which know their limits. A wealth of evidence is currently emerging which suggests we should stop fibrillating and make a near-revolutionary commitment to ending crony capitalism and embracing social cooperation through business.”

Tax Freedom Day 2012

• The Sun
• The Times
• Daily Mail
• Daily Express: Tax Freedom Day 48 hours later
• City AM: Osborne's U-turn comes as UK celebrates tax freedom day
• The Scotsman: Waking up a little bit richer today...or not
• The Herald
• BBC East Midlands Today
• Radio Five Live, Morning Reports
• LBC
• Eamonn Butler on the Jeff Randall Show
• BBC Radio 2
• Eamonn Butler writing in ConservativeHome: It's Tax Freedom Day today. 
• The Morning Star: Shove off into a corner
• Money Morning: What Tax Freedom Day means for you
• London Loves Business: Raise tax-free allowance and stop minimum wage
• Telegraph.co.uk: If ever we get out of this economic mess, it'll be the City AM - not the Financial Times

Summary

The Adam Smith Institute calculated that Tax Freedom Day will fall on 29 May. We received widespread coverage for this, including over 100 news websites, most national papers and 20 regional papers. Here's some of the highlights.

Don't ignore the powerful moral arguments against high taxation

WE ALL know the moral arguments for taxation: it pays for police, roads, hospitals and other vital services. But there is a moral case against taxation too – and a surprisingly strong one.

First, while most of us would happily make some voluntary contribution to essential services, it is only the threat of prison that makes us stump up taxes at today’s eye-watering levels. Tax is extracted by force – and the use of force is an evil we want to minimise. That puts an awesome responsibility on governments to ensure that every penny they extract through coercion is spent wisely. Waste and bureaucracy are not just a drain on the economy – they are a moral outrage.

But not only is taxation a form of confiscation by coercion. It is confiscation by groups who believe their values and priorities are superior to other people’s – a breathtaking moral claim. It forces families to pay for things they fundamentally disagree with. People with deep moral objections to abortion or foreign wars or mixed-sex schools have to live with the dismal thought that they, unwillingly, help pay for those things. That should give politicians the utmost discomfort, though I doubt it does.

Tax reduces people’s ability to act morally. They might prefer to spend their money on helping their children become good citizens, caring for their elderly relatives, or supporting good causes. Instead they see it taken and going on bank bailouts or expensive prestige projects. Though we wish to see individuals, families and local groups taking more responsibility for their own lives and welfare, high taxes leave them less able to do so.

And when the authorities usurp our choices, we cease to be morally sovereign and responsible individuals, and become mere agents of the state. A society cannot be considered “generous” or “caring” when its care and generosity is funded on money forced out of people, rather than freely given. Giving that comes voluntarily, through the public spirit of private donors, is far more laudable morally than support that is extracted by coercion.

Americans give almost twice as large a proportion of their earnings (1.67 per cent of GDP) to charity than does the UK (0.73 per cent). In large part, that is because the US government absorbs a much smaller part of its citizens’ income, leaving them space to make their own giving decisions. Within that space, Americans have become the largest philanthropic givers in the world, with libraries, orchestras, hospitals, schools and medical research all funded by private donations.

By contrast, we in the UK pay so much in tax that many of us convince ourselves that we have no outstanding social obligations at all. We are told that our taxes do wonderful work paying for education, welfare and policing. So we see it as teachers’ jobs, not ours, to ensure our children are literate and well behaved. We see the duty to help others as a matter for the welfare state rather than accepting that duty on ourselves. We even walk blindly past crime, vandalism or neglect, reassuring ourselves that these are things for officials to deal with.

And when people believe the state will provide, they see less reason to contribute to philanthropic causes. Why support good causes when the state already supports them? A classic example was the Royal National Lifeboat Institution (RNLI), which was created independently in 1924, but later fell on hard times. In 1854 it started accepting government grants. But for every pound the government put in, the RNLI lost thirty shillings (£1.50) in voluntary donations. So in 1869 it cut loose again – and has flourished ever since.

Remember too that our politicians and officials have their own interests, which inevitably colour how they spend our money. Ruling politicians steer tax revenues to their own supporters and pet causes. Interest groups vie against each other for grants and subsidies. The only group not represented in this carve-up of taxpayer funds is, unfortunately, taxpayers themselves.

Taxation, then, rests on force. It undermines morality, crowds out charity, rewards power, undermines personal responsibility, promotes group conflict and turns governments and the public into cheats. Taxation may be a necessary evil – but it is still an evil.

Eamonn Butler is director of the Adam Smith Institute and a contributer to the 2020 Tax Commission.

You can read his article on CityAM here. 

Summary

Dr Eamonn Butler makes the moral case against taxation in City AM's The Forum section. 

No easy solutions for Greece and the euro

He argues that the costs of staying in the Euro for Greece would exceed the costs of a possible recession. He argues that public finances and business certainty would be improved by getting the pain of transition over sooner rather than later.

Read the article in full on The Guardian here. 

Summary

Dr Eamonn Butler writes a letter in The Guardian arguing that the costs of Greece staying in the Euro will be far higher than it leaving the Eurozone now. 

Banking mafia

Sam Bowman talks on Russia Today on how banks should be reformed, why they should be allowed to fail and how we can open up the sector to more competition. 

Watch on Russia Today here.