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Santos Bypasses Institutions, Uses Decrees to Ram FARC Deal Through

By: Felipe Fernández - @Ffernandezp - May 30, 2017, 10:00 am
El presidente Juan Manuel Santos ha expedido ya varios decretos con fuerza de ley con el afán de implementar el Acuerdo Santos-Farc. (Twitter)
President Juan Manuel Santos has already issued several decrees with the aim of implementing the FARC peace agreement. (Twitter)

EspañolOver the weekend, President Juan Manuel Santos ran wild with executive decrees, pushing forward various agreements related to the government’s peace deal with the The Revolutionary Armed Forces of Colombia.

He introduced projects involving land, education in conflict zones, rural electrification and mining while also creating a National Peace Council.

Santos is making use of extra power he was granted by Congress, which ends this Tuesday, May 30, to expedite the implementation of many components of his agreement with FARC.

The National Peace Council he created advocates principles of reconciliation, coexistence, tolerance, and non-stigmatization listed in the peace deal. It also gives priority to “political alternatives for negotiation of internal armed conflict.”

The Council is supposed to meet every three months, “without prejudice to the fact that the President of the Republic, the Technical Secretariat or 40 percent of the members of the Council summon it to extraordinary meetings, when circumstances so demand, or public convenience so requires.”

The rural electrification decree consists of adopting a National Rural Electrification Plan for Non-Interconnected Zones (ZNI) and for the National Interconnected System every two years. The plan sets in place “mechanisms that allow the administration, operation and sustainable maintenance of the energy solutions built for its use.”

Construction projects will be financed by taxes on mines and ports. The Ministry of Finance will give priority to projects located in the areas most affected by the conflict.

Public education will be provided in areas affected by the conflict, organized through a merit-based competition with the Civil Service Commission.

A land decree created the National Land Fund, which is made up of uncultivated plots that can be bought by private entities. It will also define beneficiaries and create a single national registry. In addition, a new single system to access land will simplify the 52-step procedure currently in place.

At present, the land decree has caused unease in several parts of the country. For instance, Director of the political party Cambio Radical (Radical Change) Jorge Enrique Vélez, reacted with the following comment: “They want to create a ‘Gestapo’ for lands, that is to say a kind of secret authority that will watch over ownership and use of land in the country. ”

SourceEl Espectador

Felipe Fernández Felipe Fernández

Felipe Fernández is a reporter from Colombia for the PanAm Post. He's a law student at the La Gran Colombia University in Armenia. Follow him on Twitter: @Ffernandezp

Why a “Tax War” in the US Could Help the Global Economy

By: Daniel J. Mitchell - @danieljmitchell - May 30, 2017, 8:36 am
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What’s the best argument for reducing the onerous 35 percent corporate tax rate in the United States? Should the rate be lowered because it’s embarrassing that America has the highest corporate tax rate in the developed world, and perhaps the entire world? That’s certainly a persuasive reason for a lower rate. Should the rate be lowered because workers will have more jobs and higher pay when companies invest more? That should be a very compelling argument to slash the rate as much as possible. Should the rate be lowered so companies no longer will have a big incentive to “invert” to other countries? That’s probably a strong argument for some people, but not for me since I’ve never objected to inversions. Should the rate be lowered to mitigate the anti-competitive impact of America’s worldwide tax system? Sure, that would help, but I would prefer to directly solve the problem by shifting to territorial taxation. Should the rate be lowered so companies have more incentive to focus on earning money and less incentive to utilize corrupt tax breaks? That would be a win-win outcome for the American economy. Should the rate be lowered because the corporate tax is actually a levy on workers, consumers, and shareholders? It is silly that we pretend to tax companies when the ultimate tax is paid by individuals. Should the rate be lowered to reduce the bias for debt? A lower rate would mitigate that problem, though it would be better to directly solve the problem by getting rid of the double tax on dividends. Should the rate be lowered to reduce the amount of money going to Washington? I’m in favor of “starving the beast,” but a lower corporate rate may not be effective because there will be considerable revenue feedback. These are all good reasons to dramatically lower the corporate tax rate, hopefully down to the 15-percent rate in Trump’s plan, but the House proposal for a 20-percent rate wouldn’t be a bad final outcome. googletag.cmd.push(function() { googletag.display('div-gpt-ad-1459522593195-0'); }); But there’s a 9th reason that is very emotionally appealing to me. Should the rate be lowered to trigger a new round of tax competition, even though that will make politicians unhappy? Actually, the fact that politicians will be unhappy is a feature rather than a bug. I’ve shared lots of examples showing how jurisdictional competition leads to better tax policy. Simply stated, politicians are less greedy when they have to worry that the geese with the golden eggs can fly away. And the mere prospect that the United States will improve its tax system is already reverberating around the world. The German media is reporting, for instance, that the government is concerned that a lower corporate rate in America will force similar changes elsewhere. The German government is worried the world is slipping into a ruinous era of tax competition in which countries lure companies with ever-more generous tax rules to the detriment of public budgets. …Mr. Trump’s “America First” policy has committed his administration to slashing the US’s effective corporate tax rate to 22 from 37 percent. In Europe, the UK, Ireland, and Hungary have announced new or rejigged initiatives to lower corporate tax payments. Germany doesn’t want to lower its corporate-tax rate (from an effective 28.2 percent)… Germany’s finance minister, Wolfgang Schäuble, …left the recent meeting of G7 finance ministers worried by new signs of growing beggar-thy-neighbor rivalry among governments.” A “ruinous era of tax competition” and a “beggar-thy-neighbor rivalry among governments”? That’s music to my ears! I'd much rather have “competition” and “rivalry” instead of an “OPEC for politicians,” which is what occurs when governments impose “harmonization” policies. The Germans aren’t the only ones to be worried. The Wall Street Journal observes that China’s government is also nervous about the prospect of a big reduction in America’s corporate tax burden. China’s leaders fear the plan will lure manufacturing to the U.S. Forget a trade war, Beijing says a cut in the U.S. corporate rate to 15% from 35% would mean “tax war.” The People’s Daily warned Friday in a commentary that if Mr. Trump succeeds, “some powerful countries may join the game to launch competitive tax cuts,” citing similar proposals in the U.K. and France. …Beijing knows from experience how important tax rates are to economic competitiveness. …China’s double-digit growth streak began in the mid-1990s after government revenue as a share of GDP declined to 11% in 1995 from 31% in 1978 – effectively a supply-side tax cut. But then taxes began to rise again…and the tax man’s take now stands at 22%. …Chinese companies have started to complain that the high burden is killing profits. …President Xi Jinping began to address the problem about 18 months ago when he launched “supply-side reforms” to cut corporate taxes and regulation. …the program’s stated goal of restoring lost competitiveness shows that Beijing understands the importance of corporate tax rates to growth and prefers not to have to compete in a “tax war.” Amen. Let’s have a “tax war.” Folks on the left fret that this creates a “race to the bottom,” but that’s because they favor big government and think our incomes belong to the state. As far as I’m concerned a “tax war” is desirable because that means politicians are fighting each other and every bullet they fire (i.e., every tax they cut) is good news for the global economy. Now that I’ve shared some good news, I’ll close with potential bad news. I’m worried that the overall tax reform agenda faces a grim future, mostly because Trump won’t address old-age entitlements and also because House GOPers have embraced a misguided border-adjustment tax. Which is why, when the dust settles, I’ll be happy if all we get a big reduction in the corporate rate. Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review. This article was originally published on FEE.org. Read the original article.

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