Saturday, September 30, 2006

italian budget bill would raise taxes on high incomes

The center-left Italian Government appears headed for a 30 billion Euro budget bill which would extend a supposedly "temporary" 43 percent income tax rate to taxpayers with incomes exceeding 70,000 Euro. (The existing law applies the rate to those over 100,000 Euro only.) The bill would also increase the no tax area (i.e., zero bracket amount) to E8,000 for workers and E7,500 for retirees, and substitute credits for deductions in a manner that would reduce taxes for those with income below 40,000 Euros. Financial incomes, most of which are now taxed at a 12.5 percent rate, would increase to a flat 20 percent. Changes would also be made to reduce the so-called "fiscal wedge" (cuneo fiscale)--essentially, the cost of hiring an additional worker--as repeatedly promised in the election campaign. The bill also includes a penalty tax on SUVs; increased expenditures to counter tax evasion; tax and nontax benefits for the South (a perennial feature of Italian politics); and numerous changes to spending policies, designed--no easy feat--to stimulate the economy and simultaneously reduce Italy's deficit to the acceptable EU range. A proposal to institute a new successions (estate) tax, which had also been an election promise, was left out of the bill, presumably because of higher than expected tax revenues (previously blogged this summer). The measure is currently being refined at the administrative level and is expected to be discussed in Parliament beginning October 16.

india: more good news, more bad news

India continues to present an astonishing mix of good news about the present and worries about the intermediate- and long-term future. The contradiction was captured by a recent edition of the New York Times, which ran a story stating that the Indian economy grew at an incredible 8.9 percent annual rate in the second quarter of 2006, almost as fast as China and way ahead of just about anyone else in the world. The story also reported that manufacturing in India was growing at an even higher (11.3) percent pace and that these were "intoxicating" times as witnessed the exuberant attitudes and luxury goods on display in Mumbai, Delhi, and other Indian cities. The down side? A story the same day reported that a shortage of fresh water was forcing even some middle class Indians to turn to forage for water in dirty ponds or order it from delivery trucks. One woman suggested that a large part of her day was spent managing the water supply. Somewhere between these two stories, and the country's ability to reconcile them, lies the future of India.

Sunday, September 10, 2006

adva center suggests wealthy share costs of war

The Adva Center, a left-leaning think tank in Tel Aviv, has called upon the Government to ensure that high-income Israelis bear a proportionate share of the costs of the recent Lebanon War. In a letter reported in the newspaper Yediot Aharonot, the Center recommended two alternate sources of funding: deferring the later phases of tax reduction provided by previous legislation, which the Center said was supported by many mainstream economists, and a temporary increase in the companies tax from 34 to 36 percent. The Center suggested that similar measures had been used to cover emergency measures in European countries. The Adva (Hebrew for "ripple") Center is concerned with social justice issues and--in contrast to similar centers in other countries--has taken an activist role with respect to tax as well as spending policy: the Center caused something of a stir a couple of years ago with a study showing that Israelis of European origin remained substantially wealthier than those coming from Middle Eastern Jewish or Arab families. Residents of northern Israel, which was hit hardest by the war, hail predominantly from the latter two communities, and there is a widespread sense that they were abandoned or at least not adequately taken into consideration during the recent war.

indian tax receipts keep on growing

The Indian Finance Minister has announced that the country collected 33 percent more taxes in the first five months of the current fiscal year than in the same period last year. Of particular significance is a rise of 50 percent in direct taxes including the income tax (33 percent increase), corporations tax (70 percent increase) and similar levies. Service taxes, which did not count in the figures above and which have been progressively extended to a wider category of services, increased by almost 63 percent for a four-month period. Customs and excise duties increased but somewhat more modestly, at 34 and 9 percent respectively. The numbers suggest not only the rapid growth of the Indian economy, which pretty much everyone knows about, but the at least partial success of the Government's ongoing effort to shift the revenue burden from indirect to direct taxes, a key aspect of Indian fiscal policy for the last fifteen years.

Tuesday, September 05, 2006

katie couric first night

I thought she was a little bit tight but otherwise pretty effective (I was called away after the first 15 minutes for dinner.) The piece with Tom Friedman and the effort to bring in public opinion were nice touches in a pretty stale medium. Of course, she was unfailingly anti-Bush, but CBS wouldn't hire her if she wasn't. The one clear thing is that she won't lack "gravitas," whatever that means--I think the gender will be a nonissue within two or three nights. For me, in any event.

Saturday, September 02, 2006

on the absence of female supreme court clerks

Something of a hubbub was created by a recent NY Times article lamenting the decline in female Supreme Court clerks during the current year (I think it was 7 out of 37, something like that). Since the closest I ever got to the Supreme Court was the public tour, I'm not sure that I'm much of an expert, but here are a few thoughts:

1. I doubt that it's just a statistical oddity. You can flip a coin and get 30 out of 37 heads, but you usually don't. Does anyone really think it equally likely that there would be only 7 males?

2. Nor do I think it is "sexism" on the part of the judges. For one thing, they wouldn't have been less sexist in previous years. Also, most sexists are quite comfortable hiring younger women in dependent positions (like law clerks); it's when they ask for the senior positions that the trouble starts.

3. I think that the issue of female professors as role models deserves a closer look. There are a variety of women law professors teaching a wide range of subjects at prestigious law schools. But relatively few are conservatives, and in many places they remain concentrated in feminist and other "critical" fields. This makes it less likely that their students will clerk for (say) Scalia, Roberts, or other more conservative judges. The same is probably true for becoming partners at major law firms or equivalent positions.

I was interested, by the way, to see that Justice Thomas was actually one of the more likely to hire female law clerks, at least among conservative judges. I doubt he'll get much credit for it.