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Why Africans Starve
Creators Syndicate or LewRockwell.com ^ | November 5, 2003 | Dr. Paul Craig Roberts

Posted on 11/05/2003 9:06:09 AM PST by ScreenName1

Why Africans Starve

by Paul Craig Roberts

War and drought are the standard explanations for starving Africans. War and drought definitely take their toll. But so do tax rates.

Jude Wanniski has taken a look at taxation in Ethiopia. This is what he found.

A farmer who earns $68 a year after expenses from cash sales of a crop is taxed 10%. Once a farm’s annual income passes the $4,235 mark, additional income is taxed at 89%. Wanniski wonders if such a tax system wouldn’t cause Ethiopians to starve in the absence of war and drought.

Desperate for tax revenues, the Ethiopian government is blind to the incentive effects. Wanniski reports that there is a 150% excise tax on beer, 80% on soft drinks, 75% on tobacco, 100% on fuel, and so on. In addition, there is a 15% value added tax. With such gargantuan sales taxes, a poor country’s commerce is snuffed out.

Examining Ethiopian income taxes, Wanniski found that the rates apply to monthly salaries. Consequently, an Ethiopian is taxed even if he is out of work for most of the year and his average monthly income is below the threshold. Moreover, there are no personal deductions. Gross income is taxable income.

These tax rates on 67 million Ethiopians produce $1 billion in annual revenues, of which $125 million services Ethiopia’s debts to the IMF and other foreign lenders.

Many things are wrong with this picture. Ethiopia is in the revenue minimizing range of the Laffer curve. Even the IMF must know this.

The IMF is supposed to advise debtors about economic policy. In Ethiopia, as elsewhere, the IMF has failed.

In Zimbabwe, a 45% tax rate strikes enterprise dead when annual incomes reach about $500 with a 30% surtax on top of the 45% (see www.wanniski.com).

A person might think that the Congressional Black Caucus would lead the charge for more realistic taxation. Alas, addicted to handout politics at home, the Black Caucus agitates for more foreign aid to Africa – which means more government funds for warring factions to fight over.

Africa is dying, because Western policymakers are still carrying on their war against Reaganomics. Stagflation – rising inflation and unemployment – offered control-minded policymakers the chance to tighten their grip on economies by regulating prices and incomes in order to combat stagflation. But along came President Reagan, who used supply-side economics to reverse the policy mix and to cure stagflation.

The Reagan revolution was repeated in England, where Prime Minister Thatcher slashed marginal tax rates, and in France and Italy, where socialized industries were privatized.

Economies escaped from the clutches of the control-minded, an offense for which Reagan is not forgiven.

Many Western policymakers place greater value on a more equal distribution of income than they place on economic growth. For them, high tax rates are a desirable tool. They are willing to sacrifice greater income and tax revenue growth in order to narrow income differences.

The controversial CBS program on Reagan is a propaganda attack designed to destroy Reagan’s success in order to restore belief in government solutions. Neoconservatives, with their goal of American Empire, are helping the leftwing to revive "big government religion."

In this atmosphere Africans are likely to be sacrificed. Giving Ethiopians a Reaganite policy prescription would conflict with the desire to extirpate Reagan’s influence.

If tax policy allowed Africans to make money, there would be less incentive for Africans to fight over who controls the government in order to pocket the revenues. Wars would diminish as alternative sources of wealth arose, making it less of a life and death matter to have control of the government.

Westerners, however, believe that sending food aid is a surer display of compassion than exporting Reagan’s tax policies. The food aid, of course, subsidizes war. The recipient government uses the aid to feed its supporters, while allowing its opponents to starve.

This seems to be Robert Mugabe’s plan in Zimbabwe. His attack on white farmers disguises that his real target is his black opposition.

Now that Mugabe has destroyed the farms that fed the country and provided export earnings, famine looms. Food aid will enable Mugabe to nourish his supporters while starving the opposition. The compassionate Western donors will be complicit in an act of genocide.

But Western policymakers will be saved the pangs of bad conscience by their refusal to recommend Reagan policies "that benefit the rich."

November 5, 2003

Dr. Roberts [send him mail] is John M. Olin Fellow at the Institute for Political Economy, Senior Research Fellow at the Hoover Institution, Stanford University, and Research Fellow at the Independent Institute. He is a former associate editor of the Wall Street Journal and a former assistant secretary of the U.S. Treasury. He is the co-author of The Tyranny of Good Intentions.

Copyright © 2003 Creators Syndicate


TOPICS: Business/Economy; Foreign Affairs; Philosophy
KEYWORDS: africa; judewanniski; paulcraigroberts; starvation; taxes

1 posted on 11/05/2003 9:06:09 AM PST by ScreenName1
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To: ScreenName1
BTTT - great article.
2 posted on 11/05/2003 9:09:02 AM PST by Tax-chick (Where am I? Who are all these kids, and why are they calling me Mom?)
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To: ScreenName1
Sam Kinison had the right solution to starvation in Ethiopia," Hey people, you're living in a desert! Move!
3 posted on 11/05/2003 9:10:36 AM PST by WackyKat
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To: WackyKat
"WE HAVE DESERTS TOO, WE JUST DON'T LIVE IN THEM!!!!!"
4 posted on 11/05/2003 9:18:42 AM PST by biblewonk (I must answer all bible questions.)
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To: biblewonk
Ethiopia was a reasonably prosperous country for thousands of years. It takes modern government and expert economic planning to starve all those people.
5 posted on 11/05/2003 9:21:53 AM PST by Tax-chick (Right-wing Internet wacko)
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To: ScreenName1
A farmer who earns $68 a year after expenses from cash sales of a crop is taxed 10%. Once a farm’s annual income passes the $4,235 mark, additional income is taxed at 89%. Wanniski wonders if such a tax system wouldn’t cause Ethiopians to starve in the absence of war and drought.

A tax-rate coming to a Westerized country near you.

6 posted on 11/05/2003 9:28:39 AM PST by Paul C. Jesup
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To: biblewonk
Israel and Los Angeles show how prosperity can be achieved in a desert. It takes incentives (and in LA the incentives were driven by real estate values) to manipulate water flow.

I live just south of Mojave, at the north edge of Los Angeles county, in the Mojave Desert.
7 posted on 11/05/2003 9:30:49 AM PST by donmeaker (Bigamy is one wife too many. So is monogamy.)
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To: biblewonk
Some of our most agriculturally productive areas were once deserts, such as much of California's Central Valley. We just are motivated to find ways to bring water to it to make it bloom. It's a bad situation when taxes are so high they stifle creativity.
8 posted on 11/05/2003 9:44:06 AM PST by tertiary01
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To: tertiary01
Yes it's every bit as bad as not owning any interest in your farm and watching TV instead of harvesting your crops if the government's tractor gets a flat tire. Like in Russia.
9 posted on 11/05/2003 9:45:14 AM PST by biblewonk (I must answer all bible questions.)
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To: Tax-chick

It's amazing what you find on websites that FreeRepublic does not allow postings from.
10 posted on 11/05/2003 9:56:30 AM PST by ScreenName1
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To: biblewonk
Imperial Valley in California is a desert, yet is produces enough vegetables to supply the entire world.
11 posted on 11/05/2003 10:22:42 AM PST by Ajnin
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To: Ajnin
WhatEver I was just quoting the dead comedian.
12 posted on 11/05/2003 10:24:41 AM PST by biblewonk (I must answer all bible questions.)
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To: ScreenName1
I guess. I've never posted an article. Paul Craig Roberts is a major columnist ... Townhall, Forbes, etc.
13 posted on 11/05/2003 10:36:50 AM PST by Tax-chick (Right-wing Internet wacko)
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To: Clive
ping
14 posted on 11/05/2003 10:39:41 AM PST by Libertarianize the GOP (Ideas have consequences)
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To: Tax-chick
You are right, he is a major columnist but I first found this article a site that FreeRepublic does not like. VDare (dot) com.

I don't know why but I suspect that the managment here thinks that particular website is racist. I have never found that to be true but maybe they know something I don't about them.
15 posted on 11/05/2003 10:53:32 AM PST by ScreenName1
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To: ScreenName1
ScreenName1 aka subaverage, ~CertifiedPatriot~, Dogime, McNeills VA Partisan Rangers, Oak and Thistle, Confederate Soldier, et al, banned again.
16 posted on 11/05/2003 12:19:19 PM PST by Jim Robinson (Conservative by nature... Republican by spirit... Patriot by heart... AND... ANTI-Liberal by GOD!)
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To: Jim Robinson
What's the skinny on this guy? What axe does he grind?
17 posted on 11/05/2003 12:20:39 PM PST by Poohbah ("Would you mind not shooting at the thermonuclear weapons?" -- Major Vic Deakins, USAF)
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To: Poohbah
Apparently, he likes pushing sites that the owner of FR (that would be me) does not wish to associate. Also, apparently, he thinks very little of an owner's right to control the content and use of his own private property. He also appears to care nothing about our first amendment rights to freely choose with whom we wish to associate (or disassociate). He also doesn't seem to mind trespassing on private property. Other than that, who knows what his major malfunction is? But I will assume it has something to do with his recent choice of screen names (the one he used just prior to "ScreenName1" above).
18 posted on 11/05/2003 12:49:48 PM PST by Jim Robinson (Conservative by nature... Republican by spirit... Patriot by heart... AND... ANTI-Liberal by GOD!)
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To: Jim Robinson
Gosh.

Opposed to private property rights and free association.

Must be a Democrat. (c8
19 posted on 11/05/2003 12:51:16 PM PST by Poohbah ("Would you mind not shooting at the thermonuclear weapons?" -- Major Vic Deakins, USAF)
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To: Poohbah
Yeah, I know. You could almost mistake him for a Damned Yankee.
20 posted on 11/05/2003 12:56:18 PM PST by Jim Robinson (Conservative by nature... Republican by spirit... Patriot by heart... AND... ANTI-Liberal by GOD!)
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To: WackyKat
"I'm like anyone else on this planet -- I'm very moved by world hunger. I see the same commercials, with those little kids, starving, and very depressed. I watch those kids and I go, '(darn), I know the FILM crew could give this kid a sandwich!' There's a director five feet away going, 'DON'T FEED HIM YET! GET THAT SANDWICH OUTTA HERE! IT DOESN'T WORK UNLESS HE LOOKS HUNGRY!!!'

But I'm not trying to make fun of world hunger. Matter of fact, I think I have the answer. You want to stop world hunger? Stop sending these people food. Don't send these people another bite, folks. You want to send them something, you want to help? Send them U-Hauls. Send them U-Hauls, some luggage, send them a guy out there who says, 'Hey, we been driving out here every day with your food, for, like, the last thirty or forty years, and we were driving out here today across the desert, and it occurred to us that there wouldn't BE world hunger, if you people would LIVE WHERE THE FOOD IS!

YOU LIVE IN A DESERT! YOU LIVE IN A (dog-gone) DESERT! NOTHING GROWS OUT HERE! NOTHING'S GONNA GROW OUT HERE! YOU SEE THIS? HUH? THIS IS SAND. KNOW WHAT IT'S GONNA BE A HUNDRED YEARS FROM NOW? IT'S GONNA BE SAND! YOU LIVE IN A (dog-gone) DESERT! GET YOUR STUFF, GET YOUR (dog-gone-stuff), WE'LL MAKE ONE TRIP, WE'LL TAKE YOU TO WHERE THE FOOD IS! WE HAVE DESERTS IN AMERICA -- WE JUST DON'T LIVE IN THEM, (you darn people)!"

-- Sam Kinison (RIP)
PG-ized by avg_freeper
21 posted on 11/05/2003 1:08:52 PM PST by avg_freeper (Gunga galunga. Gunga, gunga galunga)
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To: ScreenName1
"Why Africans Starve"

"I always thought the reasons so many african people starve, was that they make their livings on property the size of my living room carpet". ( Paraphrasing P.J. O'Rourke of course )

22 posted on 11/05/2003 2:57:08 PM PST by Pagey (Hillary Rotten is a Smug, Holier - Than - Thou Socialist)
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To: ScreenName1
bttt
23 posted on 11/06/2003 1:59:32 AM PST by lainde
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Comment #24 Removed by Moderator

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