According to the Heritage Foundation, the United States is no longer economically "free", but this year is only "mostly free". Before you cry Armageddon, we are still ranked #8 out of 179, though "socialist" Canada is ranked #7. Here's their reasoning for the drop in ranking:
Uncertainties caused by ongoing regulatory changes and politically influenced stimulus spending have discouraged entrepreneurship and job creation, slowing recovery. Leadership in free trade has been undercut by “Buy American” provisions in stimulus legislation and failure to pursue previously agreed free trade agreements with Panama, Colombia, and South Korea. Tax rates are increasingly uncompetitive, and massive stimulus spending is creating unprecedented deficits. Bailouts of financial and automotive firms have generated concerns about property rights.Though I couldn't remember how to make a chart with the data in Excel to prove it, there is a strong correlation between economic freedom and GDP per capita. Luckily someone did it for me with the 2004 data:
#9 is Denmark, which has the highest taxes in the world -- 51% of GDP.
ReplyDeleteGoes to show you taxes aren't the worst things for growth or freedom.
ReplyDelete