If I Were King

From the series “10 simple rules that would make the world a better place”:

1 – Everyone would pay the same flat tax. This would include income and stocks/saving earnings. Maximum would never be over 20%. Only exception would be for all levels of politicians, who would pay 30% more than everybody else.

2- Social security and free health care for anyone below the poverty line. No benefits at all for everybody else. Everyone would contribute an extra fixed percentage (1%) of their income for this social fund.

3- Government budgets in all levels are limited to spend 90% of tax income. The remaining 10% would be used to pay exclusively: unemployment insurance (which includes basic health insurance) up to 1 year as long as proof of job search is provided. The only exception would be times of war.

4 – Abortion would be completely legal. The only requirement is that these women would have to get their tubes tied at the same time (except when there is a clear danger to the mother’s life, baby’s life or rape was involved).

5 – Every prisoner would be forced to work in government projects. Each day of work would cut sentences in half day. Life prisoners would work anyway.

6 – All import tariffs would be limited to 10%.

7 – In order to carry a gun, people would have to go through a preparatory course and test (think driver’s school for guns). The license would need to be renewed every 2 years. Buying a gun to keep at home would remain legal without extra requirements.

8 – Drug consumption in public places would get you fines. Very expensive ones. Drug trafficking would continue to be punished by jail time.

9 – The US would route all its international aid through NATO instead of the UN. Only NATO members would be eligible receivers.

10 – Politicians would have to register a plan of government during the first 2 months of the campaign (or at least 6 months before election). This plan would be legally binding.

The recipe for success

Remeber the iPod and Xbox discussion?

So according to this, here is a breakdown of taxes and tariffs:
“O Imposto de Importação, o IPI, 17% a 19% de ICMS, 9,25% de PIS/Cofins, CPMF, IRCS sobre o lucro, todos somados representam facilmente a metade, ou até mais, do valor final do produto (iPod).”
...
"Segundo um levantamento da Associação Brasileira das Desenvolvedoras de Jogos Eletrônicos (Abragames), antes de chegar às lojas, os videogames carregam mais de 100% somente em tributação direta - 30% de Imposto de Importação, 50% de Imposto sobre Produtos Industrializados (IPI), 9,25% de PIS/Cofins e de 17% a 19% de Imposto sobre a Circulação de Mercadorias e Serviços (ICMS)."

So we know two things:
- Import tariffs are extremely high
- Other taxes over any manufactured products are even higher

It's the perfect recipe for success.

Losing the Global race – Mercantilist style

Using Google Gapminder

The graph above shows that in 1975 these countries had the following income per capita / life expectancy:

Costa Rica	US$5.790	70y
Brazil	US$5.502	61y
South Korea	US$3.722	64y
Chile	US$3.542	66y
Malaysia	US$2.954	64y

Now moving to 2004, the numbers were:

South Korea	US$18.840(406%)	77y(+13y)
Chile	US$9.993(182%)	78y(+12y)
Malaysia	US$9.444(219%)	73y(+9y)
Costa Rica	US$8.714(50%)	79y(+9y)
Brazil	US$7.531(36%)	71y(+10y)

---x---

Some didn’t like my previous posts about how imports are so expensive in Brazil when compared to the rest of the world. Same old.

I even know what they will say about the data above:
“Ah, but these countries were protectionists too! They had big government programs that helped their industries! Asian countries are financing the US debt! Chile had a dictator! Why do people need an iPod anyway? This is really unfair!”

Like every fallacy, this kind of thought has some truth in it. Yes, every single country in the world has some level of protectionism. Yes, some of these countries (Korea and Malaysia especially) had big government programs that subsidized some industries.

SO DID BRAZIL!

Why their programs succeeded and ours failed is an interesting historic discussion. But in my mind, the real important question is why these countries are still growing NOW and we are not.

---x---

The mercantilists thought that the wealth of a country was defined by the amount of gold they held. If you ran a trade deficit, your country was getting poorer. It was that simple.

Capitalism on the other hand, is all about specialization. You import things other countries produce for a cheaper price so you can produce other things and export those at a cheaper price. Not so simple, but it does work.

The only explanation I find to these protectionists policies that still linger in Brazil is that the government still works under the mercantilist paradigm: exports are good, imports are evil.

After all, what industry is Brazil protecting by making an iPod cost so much?

---x---

Back to the iPod index, here is the price for the countries I mentioned above:

Brazil	US$ 327.71
Costa Rica	US$ 251.00
Chile	US$ 210.92
Malaysia	US$ 199.62
South Korea	US$ 176,17

Is it just coincidence?

iPod index e o custo Brasil

O australiano Commonwealth Bank, inspirado no Big Mac index do The Economist, criou o iPod index baseado no preço do iPod Nano de 2 GB pelo mundo.

Ganha um iPod quem adivinhar qual é o lugar mais caro do mundo: (custo médio em dólares)

1. Brasil 327,71
2. Índia 222,27
3. Suécia 213,03
4. Dinamarca 208,25
5. Bélgica 205,81
6. França 205,80
7. Finlândia 205,80
8. Irlanda 205,79
9. Reino Unido 195,04
10. Áustria 192,86
11. Holanda 192,86
12. Espanha 192,86
13. Itália 192,86
14. Alemanha 192,46
15. China 179,84
16. Coréia do Sul 176,17
17. Suíça 175,59
18. Nova Zelândia 172,53
19. Austrália 172,36
20. Taiwan 164,88
21. Cingapura 161,25
22. México 154,46
23. EUA 149,00
24. Japão 147,63
25. Hong Kong 147,35
26. Canadá 144,20

Mais aqui

Why?

Xbox 360 chega em 1º de dezembro ao Brasil, por R$ 2.999,00

Custo nos EUA:
Console: $399
Kameo: Elements of Power: $49.99
Perfect Dark: $49.99
Project Gotham Racing 3: $49.99
Remote Control: $29.99

Total: US$ 578.96 = RS$ 1273.71

Antes de eu colocar a culpa em lugares indevidos, pergunto aos que sabem mais: De onde vem esses RS$1,726.278? Impostos? Outros custos de importação?(quais?) Margem de lucro? (Porquê a MS cobraria mais num país que tem poder econômico menor?)

Tax cuts for the rich. But of course!

Uma imagem vale mais do que mil reportagens tendenciosas:



E tem mais:
The top 50% were those individuals or couples filing jointly who earned $29,019 and up in 2003. (The top 1% earned $295,495-plus.)

The top 1% pay over a third, 34.27% of all income taxes. (Up from 2003: 33.71%) The top 5% pay 54.36% of all income taxes (Up from 2002: 53.80%). The top 10% pay 65.84% (Up from 2002: 65.73%). The top 25% pay 83.88% (Down from 2002: 83.90%). The top 50% pay 96.54% (Up from 2002: 96.50%). The bottom 50%? They pay a paltry 3.46% of all income taxes (Down from 2002: 3.50%). The top 1% is paying nearly ten times the federal income taxes than the bottom 50%! And who earns what? The top 1% earns 16.77% of all income (2002: 16.12%). The top 5% earns 31.18% of all the income (2002: 30.55%). The top 10% earns 42.36% of all the income (2002: 41.77%); the top 25% earns 64.86% of all the income (2002: 64.37%) , and the top 50% earns 86.01% (2002: 85.77%) of all the income.

Mais aqui. E antes que os social-anaeróbicos venham babar no meu teclado, o fato de eu linkar o Rush não significa que concordo com tudo que ele fala.

Mas essa ele matou na mosca.