2014 Index of Economic Freedom

From The Heritage Foundation:

Free (score 80/100 - 100/100)
1. Hong Kong
2. Singapore
3. Australia
4. Switzerland
5. New Zealand
6. Canada

What do the first two have in common, apart from being Chinese-populated city-states, harbours/trading posts and former British colonies..?

Well, in both, the government owns the freehold to all or nearly all land and merely grants long leases (usually 30 years in HK and up to 99 years in the case of Singapore). Both governments collect a significant chunk of land rents arising, either as true rent, leasehold sales, annual land value taxes/business rates, building licence fees, stamp duty, taxes on property developers etc.

As a result, income tax rates for everybody else are pretty low and sales tax more or less non-existent.

It is true that neither pays out much cash as welfare payments, but those are not really necessary. Apart from having more of a work/family ethic, the lower taxes on output and employment means that there is, er, more output and employment.

Just as importantly, there is a ready supply of low-cost social housing (to rent or buy) so there is an implied welfare system - instead of paying top whack unregulated rent/mortgage and getting cash welfare, you just pay a lower net rent/mortgage.

In principle, it comes to the same thing, only the Western system is visible transfers and the HK and S systems are invisible transfers, but they are very real transfers nonetheless*.

So for when these Faux Lib's say that HK and S are such success stories because they have low rates of income tax (hooray!) and no welfare system (ho-hum), you can politely tell them that they are fucking idiots who are missing about two-thirds of the true picture.

* It's a bit like the Homeys complaining about social tenants claiming Housing Benefit. That is visible, but not actually a net cost to the taxpayer. They could make this cost invisible by simply dropping social rents to a few quid a week, hey presto, that's £12 billion off the DWP welfare bill (and a reduction of £12 billion in rent receipts recorded by local authorities and Housing Assocations).

It's not clear to me why he's in trouble for this

Full story (from BBC) further background and general discussion over at ARRSE.

Nobel Prize winning physicist doesn't understand numbers: shock

What a pompous f***ing twat:

Surrounded by his three computer screens, his whiteboard plastered with complex equations, Professor Geim sips his tea from a frog mug... "I have no plans to move, but if George Osborne's axe is as sharp as the rumours tell, we will all be considering moving to places like Singapore where they spend 3 per cent of their GDP on research – not a paltry 1.5 per cent which is going to be cut," he said.

Singapore GDP $240 billion x 3% = $7 billion.

United Kingdom GDP $2,139 billion x 1.5% = $32 billion.

Reader's Letter Of The Day

From today's FT:

Sir,

Robert Zoellick (Heed the danger of asset bubbles*, November 25) mentions at least five ways being attempted in Singapore to dampen the property price bubble.

Strangely he does not suggest that it might be appropriate to increase the annual land value tax (currently 0.5 per cent of land market value) levied by the Inland Revenue Authority of Singapore. As head of the World Bank Group, should he not be suggesting that this type of tax be seriously considered internationally to inhibit property (ie land) price bubbles?

In Singapore, public infrastructure is funded by land value tax, which is a fair quid pro quo, since the value of land is directly related to infrastructure improvement.

Charles Bazlinton, Alresford, Hants.

* From the earlier article: "In Singapore, the 16 per cent surge in property prices during the third quarter of this year led the authorities to release more land for development and to take steps to stop borrowers from deferring payments. Other more focused measures include setting targets for the overall rate of growth of bank credit, imposing caps on the share of bank lending for real estate and portfolio investments, or higher capital requirements for riskier lenders.

In developed countries, where central banks want to keep rates low, regulators should be considering supplementary tools such as raising margin requirements on stock, bond and futures transactions, or raising down-payment requirements on commercial or speculative real estate deals."