Russ Steele
I was reading the Bee's Capital Alert this morning and noted California's jobless rate took another jump, and all the while the legislature is crafting more regulation to control our lives. Clear examples are the new building codes that increase the cost of housing and the plethora of greenhouse gas regulations on the near horizon that will increase transportation costs. Why would any company come to California, or for that matter stay given the increasing burden of socialist regulations.
California's deteriorating economy is demonstrated anew by a sharp jump in the state's unemployment rate to 6.8 percent in May.
The Department of Employment says 60,000 fewer Californians held jobs last month than in April, and 18,000 fewer than in May 2007. Unemployment, meanwhile, hit 1.3 million, up by 300,000 from May 2007.
Then I read this on the American Thinker: Will Estonia Liberate the United States. It can certainly apply to California that prides itself on leading the nation on important issues.
To this end, Laar [Estonia's first prime minister], an acolyte of the late economist Milton Friedman, embarked on a series of radical free market reforms. First, Estonia privatized state assets and established laws that clearly protected property rights. Second, it abolished all import tariffs and became one big free trade zone. In addition, Estonia stopped state subsidies to failing enterprises. Private enterprise had to work efficiently or die. Third, a flax-tax was established, with a uniform rate of 26% regardless of personal income. In January 2005 the personal income tax rate was reduced to 24%. A subsequent reduction to 23% followed in January 2006. The income tax is scheduled to decrease by 1% annually to reach 18% by January 2010.
Supply-side economics is very controversial in the West, but Laar has little doubt of its effectiveness. "The flat-rate tax has been an important part of the Estonian success story," he said. "its easy to collect and easy to control." The only losers, he noted, were the tax lawyers.
I find it interesting that as California stumbles toward becoming a socialist state, driven by regulations and central planning, while a former Soviet State has rejected the very course that California is taking. A course that has damaged our economy and is resulting in lower employment for Californians.
George and Jo Ann Rebane are in Estonia and will have some first hand knowledge of Estonia's economic success. George and Jo Ann have some initial reports on Rebane's Ruminations, especially Jo Ann's most recent picture essay on the ladies of Estonia.
