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While governments are tempted to raise taxes on capital gain in order to reduce their public deficits, the study realized by the London based Adam Smith Institute explains why the temptation should be resisted. Based on clear economic reasoning and on evidence from the US, Australia and Canada, they show that there is a Laffer curve effect at work; one that is probably stronger than in the case of personal income tax. In other words: higher capital gains tax rates are very likely to give lower tax revenues.

This is the question addressed by Jason Fichtner and Katelyn Christ in their working paper for the Mercatus Center. They explain that a real tax reform is necessary, rather than…

Philipp Bagus, a young Spanish scholar and one of the prize winners of the IREF Essay Contest, recently published a very interesting book on the European monetary system. Using the…

If we are smart enough to avoid armed conflicts, protectionism and the like, there are good reasons to believe that it will be a nice year for all of us,…

No, this is not a joke, but one of the suggestions of the very serious and very official report that the French President Sarkozy commissioned to the Nobel laureate Joseph Stiglitz. Indeed, according to the figures presented by the headed by Stiglitz Commission on the Measurement of Economic Performance and Social Progress, the traditional disposable income measure, which estimates income per capita in France to be only 66% of income in the US, is inadequate.

While some states, departments and cantons around the world are struggling for more fiscal autonomy, the Scottish government is hesitating to grasp at the opportunity offered by the UK government. The proposal of the new Scotland bill is to allow the Scottish government to increase or cut income tax rates by up to 50% for basic rate taxpayers, and by 20% at the highest rate. In exchange, the central government in Westminster plans to cut a part of its transfers to Scotland. It makes sense, since “autonomy” usually goes with “responsibility”.

It is a common statement today that in our modern societies we care too much about growth and need another intellectual framework that can guide policies and populations to more worthwhile values and sustainability. Johan Norberg is critically examining some of the alternatives to the traditional development indicator, the Gross Domestic Product growth.

The newly reappointed President of the European Commission José Manuel Barroso asked the former EU Competition Commissar Mario Monti to draw a report and advance “options and recommendations” to re-launch the European Union internal market. Istituo Bruno Leoni, Italy, recently published a critical appraisal of the Monti report. Our Director of research, Pierre Garello, contributed to this analysis of the propositions currently in vogue in Brussels.

The low fares airline Ryanair announced the closure of its only French base in Marseille from January 2011. As a consequence, 13 Marseille routes will be closed, cutting the city from important flows of tourists. The closure is following the commencement of legal proceedings against Ryanair’s Marseille base, where all of its 200 pilots and cabin crew work on Irish aircraft (i.e. Irish territory) and pay their taxes and social insurance contributions in Ireland where they receive their Irish pay.

The new US$600 billion round of “quantitative easing” by the Fed announced by Ben Bernanke is undoubtedly a topic to be discussed during the coming G20 meeting in Korea. Indeed, the reverse side of a cheaper dollar is a more expensive euro, Japanese yen, Chinese yuan etc. Exporters in those countries are likely to find themselves in a disadvantageous position to US firms in global markets. The Fed move is also likely to generate massive losses to the largest dollar holders such as the People’s Bank of China and the Bank of Japan.