Rainier, and taxes
Prince Rainier realized that wealth creation, not wealth redistribution, is what makes nations economically sucessful.
Aware that his country had no natural resources, he used his contacts and business acumen to improve modern light industry and develop his country as a tourist resort tax-haven for the wealthy, and a fashionable centre for business conventions.
He put in place measures to put Monaco on a sound financial footing.
He did this with purpose and dedication, and faced huge opossition.
When, in 1958, Monaco’s parliament, the National Council, sought constitutional reforms to have a greater say in state affairs, he made it clear that he would tolerate no attempts to curtail his powers.
The conflict came to a head the following year over the budget. The Prince suspended the constitution, thereby dissolving the National Council.
Later he announced the appointment by decree of a national assembly chosen from among “a wide range” of Monegasque circles, who would act in the same capacity as the former National Council.
There was another attempt to curb his powers in 1962 when General de Gaulle tried to bring Monaco under French tax law. Rainier saw off the threat.
Then, in the mid-1960s, the Prince prevented an attempt by the Greek shipping owner Aristotle Onassis to buy his country’s most famous institution, the casino.
Argue as you may whether the prince simply was after holding on to power and making himself rich(er), the fact is that through his actions he created prosperity in a sea of declining socialist states, and if it weren’t for him, Monaco would be yet another minor province, after having been absorbed by France.
The BBC says “Monaco became the playground of the super-rich”. Well, good for them, and for Monaco. When a nation repeals punitive taxes, it’s not just the “super-rich” (whoever they might be) who benefit. As Dr. Sowell points out,
What is often confused with a trickle-down theory is supply-side economics, such as that advocated by Arthur Laffer. That theory is that tax cuts can generate more tax revenue for the government because it changes people’s behavior, causing more economic activity to take place, leading to more taxable income, as well as a faster growing economy.
It is not hard to find examples of when this happened — for example, during the Kennedy administration, among other times and places. Whether it will happen in a given set of circumstances is what is controversial, but none of this has anything to do with money trickling down from the rich to the poor. It has to do with the creation of more wealth in the economy as a whole.
Here in the USA Larry Kudlow sees the Recovery Intact
As long as there are ample incentives to put more capital into capitalism, the economy will prosper. And who knows, the Connie Mack/John Breaux tax reform commission may come up with some solid pro-growth ideas, including unlimited Roth IRA-type savings accounts. This would really put more capital into our free market economy.
Right now the biggest threats to prosperity are trade protectionism and government overspending. At the moment they seem to be minor threats, but both bear close watching.
The bottom line to the economic outlook is that a combination of supply-side tax cuts and a mildly accommodative monetary policy are pro-growth. The strongest economic sector is business investment, a rock solid foundation for continued recovery. Both inflation and unemployment are historically low. Interest rates are normalizing, but they too remain historically low. Productivity and profits are well above their long-term trends. Economic policies are never perfect, but on balance they too are pro-growth.
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