2017: Due Year for Najib, Rosmah and Gang


December 31, 2016

2017: Due Year for Najib, Rosmah and Gang

by Dean Johns@www.malaysiakini.com

Image result for the 1mdb scandal

 

Image result for Najib, Rosmah and 1mdb

Look at those high heel shoes of Malaysia’s Beauty Queen!

Best wishes to all those who’ve done something – anything – in 2016 to deserve a happy New Year of 2017. And worst possible wishes to all the others for the decidedly unhappy New Year that they’re due for having deliberately done wrong or else failed in their duty to do right by their fellows over the past 12 months, or in many cases far longer, and have no intention of changing their ways.

Of course in the former category I include a whole spectrum of people ranging from those who’ve strenuously striven to be outstanding human beings in their ordinary, everyday lives on the one hand, to heroic humanitarians and ferocious fighters for justice and human rights on the other.

I’m conscious that I should be careful in naming any of the people or organisations I have in mind here, lest I cause offence to some by forgetting or not having sufficient space to include them, or else embarrass or endanger them through public exposure.

Suffice to mention, then, by way of example, such friends and former colleagues as ‘Chemical’ Ali, Alice and her husband Stephen; fellow-travellers in the quest for truth, integrity and transparency in government, like the management, staff and most of the readers of Malaysiakini; literally countless fellow pro-democracy writers and bloggers like Azly (Rahman), Din (Merican), Mariam (Mokhtar), KJ (John), S Thayaparan and Zan (Azlee); and, last but as far as possible from least, the inimitable and unquenchable anti-regime cartoonist and lampoonist, Zunar.

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Some of the similarly countless organisations I can’t help thinking of as well-and-truly due the happiest-possible wishes for this and every other New Year include Malaysia’s Sisters in Islam, Sarawak Report and now sadly inactive Saya Anak Bangsa Malaysia (SABM), France’s Médicins Sans Frontières, Reporteurs Sans Frontières, Syria’s non-government civilian volunteer rescue workers, the White Helmets, and the International Federation of the Red Cross and Red Crescent.

As for all those who are not due a New Year at all, let alone wishes for a happy one, the first lot I can think of, as long as I’m concentrating on Malaysia for this column, are the members, cronies and supporters of the ever-ruling UMNO-BN regime.

As of 2017, this cartel of ‘criminals’ posing as a coalition government has enjoyed an unbroken run of 60 years of allegedly happily robbing Malaysians of their rights, freedoms and protections and their nation of its natural resources. Thus these political ‘predators’ deserve to rot for years in prison, not to be wished, let alone allowed another happy year in power at the public’s expense.

All the signs are there, however, that they have every intention of celebrating in 2017 as happily for themselves and as unhappily for the people as they did in 2016 and for decades before.

Continuing to avoid and evade the fact

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Prime Minister Najib Abdul Razak continues to avoid and evade the fact of, let alone his responsibility for, the massive 1Malaysia Development Berhad (1MDB) brouhaha. And his cabinet ministers and other sycophants, supporters and apologists are still solidly behind him in his campaign of denial and deception.

Meanwhile the regime has even more daylight robberies in train. Literally, as in the case of the allegedly monstrously over-priced MRT rail system currently under construction.

So rather than yet another happy year, I, along with the majority of Malaysian citizens, I suspect, hereby wish UMNO-BN a decidedly crappy or even accursed year.

In the fond if admittedly faint hope that the US Department of Justice will finally bring criminal charges against Najib and his accomplices in the 1MDB imbroglio; or that Najib will call the 14th general election (GE14) and that Chinese numerology will come to the party and make sure that for UMNO it turns out to be truly ‘forever die’.

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And then there’s always the chance that the RAHMAN prophecy will come true, and Najib’s fall will finish off BN forever.

But of course it’s not only Najib and UMNO-N who are well and truly due, in fact way overdue, for a deservedly unhappy New Year.

There are also Bashar al-Assad, his murderous regime and its brutal Russian allies, for example, who are due endless retribution for five years of slaughter of the Syrian people and destruction of their homeland.

Then there are the likes of Islamic State, al-Qaeda, Boko Haram and all the other similar death-squads, many of which have been happily getting away with their crimes against humanity for far too many years.

And finally, who knows whether to wish the US and its citizens a Happy New Year? With president-elect Donald Trump just weeks away from being sworn-in to office, it’s anybody’s guess how 2017 will turn out for ‘God’s Own Country’ and the rest of the world.

Given Trump’s stated intention of greatly beefing-up the US’s arsenal of nuclear weapons, chances are that rather than a Happy New Year we could well find ourselves facing the unthinkable horrors of a Happy Nuke Year.

In which case the displays of fireworks on which Sydney and so many other cities squander such a fortune for the sake of celebrating the New Year could this time around portend the possibility that far more serious and deadly global or regional fireworks, or at least a decidedly dangerous arms-race, may be due in the very near future.


DEAN JOHNS, after many years in Asia, currently lives with his Malaysian-born wife and daughter in Sydney, where he coaches and mentors writers and authors and practises as a writing therapist. Published books of his columns for Malaysiakini include ‘Mad about Malaysia’, ‘Even Madder about Malaysia’, ‘Missing Malaysia’, ‘1Malaysia.con’ and ‘Malaysia Mania’.

 

Latest World Bank Report on MALAYSIA


December 23, 2016

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Malaysia’s Finance Minister: He needs a lot of help; in stead as Prime Minister he is a victim of sycophancy

Note: All reports by the IMF, World Bank, Asian Development and other multilateral institutions should be read between the lines to discern what is not said. I am confident my readers will exercise due care when they are presented with reports on Malaysia by these institutions.–Din Merican

Latest World Bank Report on MALAYSIA

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Malaysia Economic Monitor December 2016: The Quest for Productivity Growth

Malaysia’s economic growth has slowed down but remains resilient to external challenges.

  • The gross domestic product (GDP) growth rate is projected to reach 4.2% in 2016 and 4.3% in 2017.
  • Private consumption is expected to continue driving economic growth, supported by low unemployment and government income-support measures.
  • Private investment growth is expected to moderate, as commodity prices and global economic activity remain subdued.
  • Fiscal consolidation remains on track despite lower oil-related revenues.
  • Uncertainties around the rebalancing of the Chinese economy, further declines in the world commodities’ prices, and evolving US economic policies on global trade are some of the key sources of risks to Malaysia’s economic outlook.

Productivity is the main driver of Malaysia’s economic development, though productivity growth has slowed over the past decade.

  • Capital and labor have mainly driven Malaysia’s robust economic growth over the past 25 years. While significant, Malaysia’s productivity growth over the past 25 years has been below several global and regional countries.
  • As capital and labor are expected to slow down, rising productivity growth, greater female labor-force participation, and continued investment in physical and human capital will be necessary for Malaysia to achieve high-income status.
  • Malaysia has performed relatively well on key aspects of productivity, such as in the quality of infrastructure, and non-technical innovations.
  • Malaysia’s existing institutional architecture has sustained consistent productivity growth for more than two decades. Challenges in the skills gap, quality of infrastructure, and research and development system need to be addressed in order to refocus attention on productivity growth.
  • Overcoming skill gaps, building innovation capacity, and addressing distortion in markets where firms sell their goods and services, could help accelerate productivity growth further.

LINKs FOR DOWNLOADING THE PRESENTATION AND THE FULL REPORT

http://pubdocs.worldbank.org/en/183141482112459157/MEM-Productivity-Presentation-December-19.pdf

http://documents.worldbank.org/curated/en/773621481895271934/Malaysia-economic-monitor-the-quest-for-productivity-growth

 

 

 

 

 

 

 

 

Former Malaysian Finance Minister Daim Zainuddin–The Economy under Corrupt Najib Razak


December 22, 2016

Former Malaysian Finance Minister Daim Zainuddin–The Economy under Corrupt Najib Razak

Received via e-mail

Get rid of the feudalism mindset, especially among those who are the trustees of this nation. If the leader is wrong or has committed a crime, it is the fiduciary duty of the subordinates, particularly the civil servants, to take corrective actions, instead of being in cahoots to cover up the wrongdoings.–Tun Daim Zainuddin

Image result for suharto and lee kuan yew

I have been asked to share my thoughts on key structural issues facing the country, and what we can do about it. I am most reluctant to put my thoughts into words or share them with the public. Since my retirement, I have stayed away from public discussions as I prefer to spend my time travelling. But times have changed and we are facing a very serious crisis.

Clearly, there are important long-standing structural issues that may affect our march towards developed country status. These are related to education, the labour market, the government’s fiscal policy, inclusive growth and sustainability, among others.

However, what this country needs at this moment is much simpler but seems harder to solve. What we need to address now, which I have repeated so many times, is the chronic trust deficit. In order to overcome this deficit, we must first understand its origins. There are a few reasons why we are facing this trust deficit.

First, it is the lack of integrity, honesty and moral courage. The lack of good moral character seems pervasive among the elites in this country, especially among those in power. Corruption and bribery remain rampant, to the extent that cases of public money being siphoned off for private use or government servants stashing away obscene amounts of hard cash do not amaze us anymore. It is as though systemic corruption has taken a hold of us and our nation, and we have accepted it. The culprits must be punished. We should have no sympathy for them.

But in some instances, politically connected culprits were not brought to the courts fast enough. In the case of the Sabah Water Department, it has been nearly two months since the main officers were released on bail. This has given room for further speculation and abuse of the system. The same goes for the Ministry of Youth and Sports’ case. And, of course, who can deny the existence of the biggest elephant in the room pertaining to corruption and abuse of power?

It is worth being reminded that lack of integrity has disastrous consequences, and it extends beyond the damage to the current generation. Studies have shown how countries that are perceived to be corrupt tend to grow at a much slower rate than those that are corrupt-free and this has a negative impact on long-term growth. No one would want to invest in a country that does not respect the rule of law.

Lest we forget, the root cause of why a community or a nation succeeds or fails, why great civilisations or empires collapsed, always comes back to one reason — integrity or the lack of it.

Tun Daim Zainuddin (right) and author of ‘The Colours of Inequality’ Dr Muhammed Abdul Khalid during the launch of the book at the International Islamic University of Malaysia in Kuala Lumpur, November 11, 2014. — Picture by Yusof Mat Isa

Thus, solving all those structural issues will depend on ensuring the highest level of integrity among those in power. In fact, a nation’s survival and its success depend on the integrity of everyone, most crucially, its leadership.

The leaders must always uphold the highest level of integrity and not betray the trust assigned to them or take advantage of their position. Those with positions must remember that there is no honour in abusing their power.

Second, the lack of empathy and common sense among those in power plays a role in widening the trust deficit in the country. When the people are feeling the pinch of slower wage growth, higher cost of living with the removal of subsidies and weakening of the ringgit, we are pouring more than half a billion ringgit of the rakyat’s money into a public park. This is outright insensitive and mind-boggling when allocations for essential services, such as health and education, have been reduced. Yet, if the government is sincere about its concern about parks, why hasn’t it gazetted Bukit Kiara?

Third, expertise in oversight of the nation’s economy is seriously lacking. We proudly proclaim that our “fundamentals are strong”. But the economic growth is fuelled by debt. This is not sustainable. Government debt with its contingent liability has easily exceeded the debt limit. In fact, for next year’s budget, we have to borrow about 90% to finance our development expenditure.

For every RM1 we expect to collect next year, 98 sen will be spent on operational expenses, such as paying salaries, interest and subsidies, among others. This is not sustainable.

Household debt is already at an all-time high; in fact, it is one of the highest in the region. With lack of savings, our households are vulnerable to poverty. Our outstanding non-financial corporate sector debt is also high, about 105% of GDP as at end-2015, which is higher than the debt of emerging economies.

Yet, we are still proud to state that the economy is growing, and we are proud when the incoming president of US reportedly is impressed by our high economic growth. But the US is approaching full capacity as evidenced by falling unemployment and rising wages.

But growth alone is not enough. It needs to benefit the country and the rakyat. Despite registering positive growth, the number of unemployed in Malaysia keeps growing. Since early last year, the number of unemployed grew nearly 16%. Our graduates do not have jobs; a graduate engineer has to sell nasi lemak and the government seems proud of that!

Firms also are not hiring as before; the number of vacancies reported this year is the lowest in about a decade. In fact, the number of jobs created are mostly low to mid-skilled, and not high-skilled. Not surprisingly, the share of low-skilled workers in the labour force has increased while that of high-skilled workers has declined. This does not augur well for the country becoming a high-income nation. It is pointless for a country to achieve high income when the rakyat remains low income.

These are among the factors that lead to people losing trust in the government. What do we do then?

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Household debt is already at an all-time high; in fact, it is one of the highest in the region. With lack of savings, our households are vulnerable to poverty. Our outstanding non-financial corporate sector debt is also high, about 105% of GDP as at end-2015, which is higher than the debt of emerging economies.

Yet, we are still proud to state that the economy is growing, and we are proud when the incoming President of US reportedly is impressed by our high economic growth. But the US is approaching full capacity as evidenced by falling unemployment and rising wages.

But growth alone is not enough. It needs to benefit the country and the rakyat. Despite registering positive growth, the number of unemployed in Malaysia keeps growing. Since early last year, the number of unemployed grew nearly 16%. Our graduates do not have jobs; a graduate engineer has to sell nasi lemak and the government seems proud of that!

Firms also are not hiring as before; the number of vacancies reported this year is the lowest in about a decade. In fact, the number of jobs created are mostly low to mid-skilled, and not high-skilled. Not surprisingly, the share of low-skilled workers in the labour force has increased while that of high-skilled workers has declined. This does not augur well for the country becoming a high-income nation. It is pointless for a country to achieve high income when the rakyat remains low income.

These are among the factors that lead to people losing trust in the government. What do we do then?

Two things need to be undertaken, one easier than the other. First, a new economic team must be assembled and empowered to fix the economy.

The rakyat and investors, both local and foreign, must have faith and confidence in those managing the economy. The members of this team must be professionals who are technically competent, with the highest level of integrity and dare to speak the truth. Lack of intelligence and incompetence cannot be compensated for by loyalty to the leader.

Indeed, the special economic team that was set up in August last year is a complete failure. It should be dissolved. Concurrently, the Prime Minister must let go of the Finance Minister’s post; this is bad governance.

Second, which is equally important, is to get rid of the feudalism mindset, especially among those who are the trustees of this nation. If the leader is wrong or has committed a crime, it is the fiduciary duty of the subordinates, particularly the civil servants, to take corrective actions, instead of being in cahoots to cover up the wrongdoings.

Bear in mind that political leaders who are elected by the rakyat to lead the government are basically the rakyat’s servants. They are merely given the mandate and power by the rakyat to lead the government and to rule on their behalf. Thus, the ability to be respectful and accountable towards the people who voted them in is paramount.

The leaders are not gods that must be obeyed. This clarion call is not new; nearly half a century ago, our great philosopher and sociologist, Syed Hussein Alatas, warned us of the danger: “…man in authority … expects the subordinate to be loyal and faithful in a manner that sometimes comes into conflict with the norms or ethics … he is supposed to be loyal under almost all circumstances, even if the circumstances violate the present values and philosophy of Malaysian society” (Feudalism in Malaysian society: A study in historical continuity. Source: Civilisations, Vol. 18, No. 4 [1968], pp. 579-592).

This requires, again, integrity and honesty, even if that means one is in the minority. Our first prime minister said it best: “If you think you are rich, there are many who are richer than you. If you think you are clever, there are more people cleverer than you. But if you think you are honest, then you are among the few and in this instance, it is best to be among the few.”

 

In dealing with the rakyat, whether on economic, social or political issues, honesty is really the best policy. Lies can only lead to more lies, and once the rakyat has lost faith in you, even when you are stating the truth, they will not believe you. You cannot fix the problems of the nation when there is a trust deficit.

In my experience during the 1986 and 1998 crises, I was upfront about the problems we faced but the people had the confidence to give us time and space to solve the problems. Without the people’s trust and support, it will be difficult to solve the economic problems, especially when it affects them. It is a partnership between government and the governed.

Reforms in institutions are also required. We must take all necessary actions, including amending laws, to ensure the independence of judiciary and security institutions. Tolerance for dissent and differences in opinion and ideologies must be welcomed, and not prosecuted. These are the ingredients for a truly open and functioning democracy.

Failure to undertake these paramount reforms means we are moving away from prosperity. Otherwise, we all should be seriously worried about the future that we are leaving for our children and grandchildren.

Bear in mind that political leaders who are elected by the rakyat to lead the government are basically the rakyat’s servants. They are merely given the mandate and power by the rakyat to lead the government and to rule on their behalf. Thus, the ability to be respectful and accountable towards the people that voted them in is paramount.

The leaders are not gods that must be obeyed. This clarion call is not new; nearly half a century ago, our great philosopher and sociologist, Syed Hussein Alatas, warned us of the danger: “…man in authority … expects the subordinate to be loyal and faithful in a manner that sometimes comes into conflict with the norms or ethics … he is supposed to be loyal under almost all circumstances, even if the circumstances violate the present values and philosophy of Malaysian society” (Feudalism in Malaysian society: A study in historical continuity. Source: Civilisations, Vol. 18, No. 4 [1968], pp. 579-592).

This requires, again, integrity and honesty, even if that means one is in the minority. Our first Prime Minister said it best: “If you think you are rich, there are many who are richer than you. If you think you are clever, there are more people cleverer than you. But if you think you are honest, then you are among the few and in this instance, it is best to be among the few.”

 

In dealing with the rakyat, whether on economic, social or political issues, honesty is really the best policy. Lies can only lead to more lies, and once the rakyat has lost faith in you, even when you are stating the truth, they will not believe you. You cannot fix the problems of the nation when there is a trust deficit.

In my experience during the 1986 and 1998 crises, I was upfront about the problems we faced but the people had the confidence to give us time and space to solve the problems. Without the people’s trust and support, it will be difficult to solve the economic problems, especially when it affects them. It is a partnership between government and the governed.

Reforms in institutions are also required. We must take all necessary actions, including amending laws, to ensure the independence of judiciary and security institutions. Tolerance for dissent and differences in opinion and ideologies must be welcomed, and not prosecuted. These are the ingredients for a truly open and functioning democracy.

Failure to undertake these paramount reforms means we are moving away from prosperity. Otherwise, we all should be seriously worried about the future that we are leaving for our children and grandchildren.

Daim Zainuddin is former finance minister of Malaysia

Minister Rahman Dahlan –A Financial Ignoramus


November 17, 2016

Minister Rahman Dahlan –A Financial Ignoramus

by TK Chua

http://www.freemamalaysia.com

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As an “economics minister”, we expect more comprehensive and professional answers from Rahman. Many can become politicians, but only very few can be economics ministers.–TK Chua

I was not a fan of Dr Mahathir Mohamad when he was Prime Minister. But a major part of my working life was under his premiership. I was resentful of Mahathir when I saw that many of the things he did was in favour of big time business people. He had his blue-eyed boys who often turned out to be disastrous. He too embarked on projects that did not turn out well. But hindsight is always perfect. Everything is relative.

When we assess the performance of a government or its leadership, rarely do we do so based on a single factor. More often than not, it is a combination of failures from which a tipping point is reached.

When Mahathir criticised the “China deal” and the East Coast Rail Line (ECRL) project, it was just one of the many issues confronting Malaysia today. How the people look at the government is not solely determined by this single criticism alone. Hence, even if Minister Abdul Rahman Dahlan has successfully rebutted Mahathir’s criticism, the view of the people may not have altered much. There are still numerous other unanswered issues that have remained protracted and controversial.

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But even within the confines of the China deal and the ECRL project, there are numerous other questions that we could have asked.  First, when Rahman claimed China’s “soft” loan was favourable to Malaysia, he must have assumed China was a simpleton we could take advantage of. It is nice to eat something soft, but be careful of the bones embedded in it. It is almost a cliché when I say there is no free lunch in this world.

Second, the Minister claimed that the soft loan was denominated in the ringgit and so it posed no foreign exchange risk. But what about repatriation of interest charges and profits by Chinese companies? The loan may be denominated in the ringgit, but repatriation of profits and interests may drain our reserves since the rail project has no forex earning capacity.

Third, why the urgency to embark on the ECRL project when government finances are less than conducive? When we borrow, more so from external sources, for an infrastructure project, the justification must be respectable. Does the east coast region suffer from transportation capacity problems right now? Even the existing highways are half empty there.

Fourth, the minister claimed “transfer of technology” when the ECRL project is implemented. I think herein lies our problem – when we are incapable of doing anything worthwhile, what we need is to go on talking about it. Seriously, if Malaysia needs transfer of technology to lay the rail track, we know that this term has been overused and abused.

As an “economics minister”, we expect more comprehensive and professional answers from Rahman. Many can become politicians, but only very few can be economics ministers.

TK Chua is an FMT reader.

 

Nobody takes Malaysia’s Budget seriously and here’s why


October 24, 2016

Nobody takes Malaysia’s Budget seriously and  here’s why

by T K Chua

http://www.freemalaysiatoday.com

“It is simple; the annual budget can’t instil discipline if there is no oversight. The annual budget can’t function as an instrument of control if borrowing and off-budget activities are allowed to roam free, unrestrained and unchecked.”–T K Chua

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When I read “Why I didn’t watch the Budget speech” as written by Kensi from Sarawak, I found my feelings were the same. For the first time in a quarter century I did not sit through the whole Budget speech. I walked off after the first hour or so.

The Budget has long lost its aura. It is just an annual pomp for fund managers to get excited and for the government to announce some goodies. Whether or not the goodies are carried out as planned is as good as anyone’s guess.

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Malaysia’s National Budget is Petty Cash for this First Couple. When the cash is finished, just borrow more or ask Bank Negara to print more money and then pass the burden to ordinary Malaysians by way of debt service or inflation. That is Najibonomics: Tax and Spend recklessly.–Din Merican

Why do I say our federal budget is meaningless?First, the annual budget has never capped the amount of borrowing that the federal government could incur each year. If the federal government may borrow without restraint, who bothers whether our projected revenues and expenses are adhered to? If revenues fall short, the government could borrow more to fill the gap. If expenses burst the budget, again the government could borrow more.

Where are the restraints and control that the annual budget is supposed to provide? In fact, the annual supplementary budgets are clear indications that the budget has failed to keep government financial indiscipline in check. The government will borrow and spend as it wishes, regardless of the revenue performance or actual expenditure incurred.

Second, the annual budget is just a mechanism to dish out allocations, but never to accomplish its intended outcomes. We mistakenly look at the allocation earmarked for each programme as if it is a fait accompli.

But this is far from true. For example, just look at the allocation for subsidies which the government has always bragged about. It is time for the government to list out how much of the allocation has reached the intended target groups and how much of it was siphoned off by corrupt officials, businessmen and those who could indulge in arbitrage.

Seriously, if budget spending has been constantly effective over the years, I believe there would be no more poor people in this country.

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Third, the annual federal budget is no longer the true representation of government financial commitment and responsibility. Off-budget agencies and activities have now overwhelmed traditional government ministries and departments.

Parliamentary oversight of government taxation and expenditure through the annual budget is at best only half correct.

When non-financial public enterprises and GLCs set up ventures, incur debt and impose contingent liabilities on the government, did they get the approval of Parliament to begin with? When government decides on privatisation projects, including guaranteeing revenues and profits of privatised entities, did it seek the approval of Parliament?

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This guy is excited about the Budget–He is the Minister of Defense: Commissions

I thought the Federal Constitution, (through Part VII – Financial Provisions), is very clear on financial oversights by Parliament – no taxation shall be levied or expenditures incurred unless with expressed authority of federal law. How then did the government spend and borrow so massively through off-budget agencies such as GLCs and Non-financial public enterprises?

It is simple; the annual budget can’t instil discipline if there is no oversight. The annual budget can’t function as an instrument of control if borrowing and off-budget activities are allowed to roam free, unrestrained and unchecked.

T.K. Chua is an FMT reader.

Trump exposed the corruption in the U.S. tax code–How will Hillary Clinton deal with this ?


October 9, 2016

Trump exposed the corruption in the U.S. tax code–How will Hillary Clinton deal with this ?

by Fareed Zakaria

https://www.washingtonpost.com

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Donald Trump has done America a great public service. No, really. By taking advantage of the country’s tax laws in such spectacular fashion, he has shone a spotlight on the corruption that is at the heart of American politics — the tax code.

When most people discuss taxes, they tend to talk about them in left-right terms. The right says that taxes are too high for everyone. The left worries that the rich don’t pay their fair share. But the facts don’t support either position. The simplest comprehensive way to judge a country’s tax burden is to look at its tax revenue from all levels of government as a percentage of gross domestic product. The United States has the fourth-lowest burden in the industrialized world, ranking 31st out of 34 countries in the Organization for Economic Cooperation and Development. The United States’ percentage is actually lower today than it was in 2000, while the OECD average is about the same.

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Nor is it true that the rich don’t pay much in America. Obviously some people manage to arrange their affairs so that they don’t pay many — or, possibly in Trump’s case, any — taxes. But the federal government derives most of its revenue from the income tax, and 70 percent of the federal income tax is paid by the top 10 percent of Americans. Most other countries rely on value-added taxes — a sales tax, often as high as 25 percent — that hit everyone equally. Summarizing the academic research for The Post, Dylan Matthews noted: “The United States has by far the most progressive income, payroll, wealth and property taxes of any developed country.”

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The problem with American taxes is something different: their complexity. The United States has the world’s longest tax code. The scholar Sean Ehrlich tabulated its word count at 3,866,392. Germany and France have codes that are less than 10 percent as long. And size makes for burdens. In most international comparisons, the United States scores very poorly on this measure. The World Bank’s Ease of Doing Business index ranks the United States 53rd for its tax system. The World Economic Forum’s Global Competitiveness Report polls executives on the five biggest burdens of doing business in a country. For the United States, Nos. 1 and 2 are tax rates and tax regulations.

Even though America is generally more competitive than other rich countries, its taxation is much more complicated and inefficient. Why this anomaly? The answer is that it is intentional — a feature, not a bug, in the system. The complexity of the tax code exists by design, because it allows for the distinctive feature of the American political system: fundraising.

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America is unique among democracies in requiring, at all levels of politics, that vast amounts of cash be raised from the private sector. In order to get this money, senators and members of Congress need something to offer in return, and what they sell are amendments to the tax code. When you pay $5,000 to have a stale breakfast with a congressman, you are not paying for his insights or personality. You and others like you are buying a line of the code, which is why it is thousands of pages long. This is the world’s ultimate “pay for play” setup.
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All these small additions and exemptions to the tax code are terrible economics. They divert business activity into areas that might not make economic sense but provide tax benefits. They are expensive and reward people and businesses for activities that they might have done anyway. And most damaging of all, they are hidden and often eternal, not requiring reauthorization. If Congress wants to fund something, it could do so openly by giving a grant. By providing a complicated tax credit, it ensures that no one realizes that it is giving cash to a company or industry.

There are only two ways to fix this problem. One would be to stop people from paying politicians. But the Supreme Court ruled in Buckley v. Valeo in 1976 that money is speech and thus constitutionally protected. (As far as I know, this is a view shared by no other Western democracy.) That leaves another path — take away what Congress sells.

If the tax code were to be made short and simple, with a handful of deductions, politicians would have little to offer people as a quid pro quo. You could still pay them, for their ideas and personality, but I suspect that the flow of money would slow to a trickle. It is the simple, single solution to the cancer in American politics. And we could thank Donald Trump for highlighting it.