Saturday, August 06, 2005
Help for Africa
We are dismayed by the images of starving children in Africa, yet again. The G-8 countries are proposing more aid, but this goes mostly to repay loans to the World Bank and IMF and not to the people who are starving and unable to repay the loans themselves Why are they unable to repay, especially in Niger which is not suffering from civil war? Jude Wanniski offers this diagnosis:
But what of Niger? I told you that you would be shocked, as I was today when I went to my sources to check on Niger’s tax system. I found that the 16% income-tax rate is encountered at roughly $200 a year and that the top rate of 52% is encountered at about $600 per year!! Capital gains is taxed at ordinary rates, which means that virtually any investment in the country that produces a gain means more than half goes to the government. Of course there is no investment under those conditions, and I will assure you that the government gets no revenue from the capital gains tax… and that it pays its tax collectors more to collect the income-tax than they receive in revenue. The corporate tax rate is 30% for residents and 40% for non-residents, at least on the data I got from the good people on the staff of your friend and mine, Rep. Charlie Rangel, who got the data from the Library of Congress.
Read more here.
On top of this strangulation is a Value Added Tax recently raised to 19%!
The point is that there is no way for these poor people to make their lives better or even save something for emergencies like famine because their government takes it all away. Want to help Africa? In the short term, send a donation to the appropriate charity, but in the long term, demand OUR government make future monetary aid contingent on tax reform.
But what of Niger? I told you that you would be shocked, as I was today when I went to my sources to check on Niger’s tax system. I found that the 16% income-tax rate is encountered at roughly $200 a year and that the top rate of 52% is encountered at about $600 per year!! Capital gains is taxed at ordinary rates, which means that virtually any investment in the country that produces a gain means more than half goes to the government. Of course there is no investment under those conditions, and I will assure you that the government gets no revenue from the capital gains tax… and that it pays its tax collectors more to collect the income-tax than they receive in revenue. The corporate tax rate is 30% for residents and 40% for non-residents, at least on the data I got from the good people on the staff of your friend and mine, Rep. Charlie Rangel, who got the data from the Library of Congress.
Read more here.
On top of this strangulation is a Value Added Tax recently raised to 19%!
The point is that there is no way for these poor people to make their lives better or even save something for emergencies like famine because their government takes it all away. Want to help Africa? In the short term, send a donation to the appropriate charity, but in the long term, demand OUR government make future monetary aid contingent on tax reform.
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