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Posts Tagged ‘Stephen Moore’
May 25th, 2018 at 8:50 am
Stephen Moore: Trade Deals Must Protect Intellectual Property Rights
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CFIF recently highlighted the importance of strengthening intellectual property rights as part of ongoing trade negotiations in a piece entitled “Intellectual Property:  NAFTA Renegotiation Priority #1.” Days later, Senator Pat Toomey (R – Pennsylvania) echoed that call in his Wall Street Journal commentary.

This week, celebrated economist Stephen Moore added his voice in a brilliant commentary entitled “Trade Deals Must Protect Intellectual Property Rights”:

American investments, ingenuity and entrepreneurship have made intellectual property one of our nation’s most important assets.  IP-intensive industries, including software, biotechnology and entertainment, now support nearly one-third of all U.S. jobs.  But too often, our foreign trading partners take unfair advantage of our IP innovations to enrich themselves at our expense.”

Moore proceeds to highlight the pharmaceutical sector as one particularly abused by foreign governments, and notes the enormous cost of IP theft to the U.S. economy by nations like China, then stresses the ominous danger if we fail to act:

Intellectual property is every bit as vital to our economy – if not more so – than steel or aluminum.    America leads the world in computer software;  drugs;  artificial intelligence;  patents;  trademarks;  and music, entertainment and other creative industries.  But how long can that last when competitor nations are ripping off our entrepreneurial companies to the tune of half a trillion dollars a year?”

It’s an excellent piece worth the read, and a welcome call from someone to whom the White House listens.

December 22nd, 2015 at 10:01 am
Internet Service Tax and Internet Sales Tax: Two Separate but Equally Destructive Proposals
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Economist Stephen Moore offers an instructive and important commentary today on two separate but oftentimes conflated taxes.  A tax on Internet service is a self-evidently destructive idea, as it would inhibit both consumer access to the Internet as well as the billions of dollars that Internet service companies invest in constant expansion and modernization.

Liberals love to talk piously about the right to universal Internet access and reducing the ‘digital divide’ in America between rich and poor.  This has been their excuse for pushing so-called ‘net neutrality’ regulations on Internet providers.  Yet taxing Internet subscriptions could make web access connection service, much like cable TV, too expensive for millions of Americans to afford…  Today 75 percent of Americans have Internet service.  But almost 1 in 4 still don’t, and the danger of a new tax is that with families financially strapped, a new tax could mean millions might drop service.”

As Moore points out, some in Congress like Dick Durbin (D – Illinois) and Lamar Alexander (R – Tennessee) continue to hold a permanent ban on Internet service taxes hostage:

So what is Durbin’s game here?  He and Lamar Alexander of Tennessee will only allow the Internet Access Tax Freedom Act to pass if Congress votes to allow states to tax online sales – which is an even worse idea than taxing Internet access, with far more money at stake.  This year, goods and services purchased on the Internet are expected to hit $300 billion, according to the Department of Commerce, and account for a record 7.4 percent of total retail sales.  So state and local politicians and left-wing interest groups have long lustily viewed e-commerce as the next giant pot of money to get their paws on…  They want to require Internet companies to collect state/local sales tax even if that company has no connection (or ‘nexus’) to the state where the tax is paid.  An Internet company in New Hampshire would have to be a tax collector for Illinois and California, even though the company uses no services in those states.  That’s terrible tax policy that will erode tax competition.”

The case against both forms of Internet taxes is obvious.  We therefore encourage our supporters across the country to contact their elected officials (you can quickly and easily locate their contact information through CFIF by clicking here) to demand opposition to both types of taxes through a permanent ban.

March 12th, 2012 at 1:15 pm
California Willfully Rejects Prosperity
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Over the weekend, the Wall Street Journal‘s Stephen Moore had an instructive and inspiring piece on the economic boom occurring in North Dakota as a result of the Peace Garden State’s (yes, that’s their actual nickname) aggressive development of oil resources.  More depressing, however (especially for this Golden State resident), was the contrast Moore drew with California:

In 1995, the U.S. Geological Survey estimated 150 million “technically recoverable barrels of oil” from the Bakken Shale [in North Dakota]. In April 2008 that number was up to about four billion barrels, and in 2010 geologists at Continental Resources (the major drilling operation in North Dakota) put it at eight billion. This week, given the discovery of a lower shelf of oil, they announced 24 billion barrels. Current technology allows for the extraction of only about 6% of the oil trapped one to two miles beneath the earth’s surface, so as the technology advances recoverable oil could eventually exceed 500 billion barrels.

Now contrast this bonanza with what’s going on in another energy-rich state: California. While North Dakota’s oil production has tripled since 2007 (to more than 150 million barrels in 2011), the Golden State’s oil production has fallen by a third in the past 20 years, to 201 million barrels last year from 320 million in 1990. The problem isn’t that California is running out of oil: In 2008, when the USGS estimated four billion barrels of recoverable oil from the Bakken, it estimated closer to 15 billion barrels in California’s vast Monterey Shale.

As Moore elaborates later (and as I’ve written at length both here and elsewhere), California’s failures are the byproduct of a governing class that regards traditional (read: viable) energy sources with suspicion at best and contempt at worst, prohibiting many efforts at energy exploration, setting renewable energy mandates, and enacting a statewide version of cap and trade.

One statistical contrast tells the whole story. The resources in California’s Monterey Shale are nearly four times as great as those in North Dakota’s Bakken. Meanwhile, California’s 10.9 percent unemployment rate is more than three times as high as North Dakota’s 3.3 percent rate. This is not fate. This is the result of choices made by California’s policymakers. The state’s voters should judge them accordingly.

July 5th, 2011 at 2:26 pm
How to Solve Investment Outflow

David Malpass and Stephen Moore have a great column at the Wall Street Journal about investment money flowing out from the United States rather than into the U.S. from abroad:

Americans are taking their investment dollars abroad at a faster pace than foreigners are bringing capital to these shores. In 2010, for example, U.S. investment abroad was $351 billion—$115 billion higher than foreign investment here. Economic recoveries are periods when investment capital usually surges into a country, but since this weakling rebound began in the middle of 2009 the U.S. has lost more than $200 billion in investment capital. That is the equivalent of about two million jobs that don’t exist on these shores and are now located in places like China, Germany and India.

One cause of this bad situation is federal over-spending:

Today, foreigners are financing food stamps and the next bridge to nowhere while Americans are building state-of-the-art production systems abroad. This is the real pernicious “crowding out effect” of the federal government’s borrowing.

But another big cause is high corporate income taxes, which make investment here far less rewarding:

Capital flows to where it is most highly rewarded, and low marginal tax rates on the returns to capital and business income create a gravitational pull on global funds.

Even former President Clinton says so:

“We’ve got an uncompetitive rate. We tax at 35 percent of income, although we only take about 23 percent. So we should cut the rate to 25 percent, or whatever’s competitive, and eliminate a lot of the deductions so that we still get a fair amount, and there’s not so much variance in what the corporations pay.”

But President Clinton doesn’t go far enough. For a long, long time I’ve argued that the corporate income tax should be eliminated entirely.
The problem, in short, is that nobody has any incentive to invest those dollars, or to lend them for investment, here in the United States. Eliminate the corporate income tax and, immediately, every American corporation becomes more profitable by as much as a third. All the pensioners who own stock in those companies get richer — immediately. All the workers with company stock-share plans get richer. Prices will drop as companies can make more money, net, even with lower prices. Companies also would save billions of dollars spent in tax-form preparation, and in time spent figuring out tax-avoidance schemes. The economy will get more efficient when tax considerations no longer distort decision-making.

Real interest rates will drop due to market forces (rather than through panicky fiats from the Federal Reserve Board). And, wonder of wonders, companies that have been moving operations overseas will now reverse course and race back within our shores — bringing hundreds of thousands of jobs with them. All of those complaints about “outsourcing” will end, virtually overnight.

That’s why this is one “pro-corporate” reform that also is overwhelmingly pro-labor. The Congressional Budget Office has noted that “domestic labor bears slightly more than 70 percent of the burden of the corporate income tax.”

At last measurement, the corporate income tax was taking in $195 billion per year. I argue that a large chunk of that would be recovered, even without the dynamic growth effects of the tax cuts, via near-immediate growth in dividends and capital gains and therefore in the taxes on those dividends and capital gains. I further argue that, under any reasonably dynamic analysis, especially one which takes into account the tremendous growth in tax revenues after prior cuts in taxes on investments, the economy won’t actually lose any money at all — but the whole economy will be stronger, jobs will be more plentiful, and even the ethics of Washington will be improved:

Indeed, it is all the mucking around in the weeds of the tax code and in the pig trough of spending earmarks that leads otherwise well-meaning congressmen to become favor-dispensers rather than statesmen. Without a corporate income tax to fool with constantly, a huge chunk of the grounds for favor-dispensation will be taken away.

So, again, eliminate the federal corporate income tax entirely. Doing so would go a long way toward completely ending the recession.