Kelsey Zahourek

PRA, 69 Global Partners Release 2012 International Property Rights Index

Posted by Kelsey Zahourek on Thursday, March 29th, 2012, 8:06 AM PERMALINK

The Property Rights Alliance is pleased to herald the publication of the 2012 International Property Rights Index (IPRI), the world’s most comprehensive measure of intellectual and physical property rights among nations.  Sixty-nine international organizations partnered with the Washington, DC-based Property Rights Alliance and its Hernando de Soto Fellowship program to produce the sixth annual IPRI. 

The IPRI utilizes three primary metrics to create a composite score: Legal and Political Environment (LP), Physical Property Rights (PPR), and Intellectual Property Rights (IPR).  Most importantly, the IPRI stresses the great economic disparities among countries with strong property rights and those without.  Nations comprising the first quintile enjoy an average GDP per capita of $39,099; more than double the $18,631 average per capita income of the second quintile.  The third, fourth, and fifth quintiles average $10,394, $4,655, and $5,149, respectively.

Over the last year, the United States’ IPRI remained in 18th place, replicating its all-time low score of 7.5 out of a possible 10.0.   According to the index, a 0.1-point decline in Intellectual Property Rights offset an identical increase in Protection of Physical Property Rights.  The Legal and Political Environment score was stagnant at 7.1

"As the global economic recovery continues at a numbingly slow pace, all nations should be seeking to provide economic stability.  Strong property rights is an essential component,” stated PRA executive director Kelsey Zahourek, “While the United States still enjoys fairly strong property rights, its recent deterioration in the rankings is quite concerning. From post-Kelo eminent domain abuses across the nation to serial harassment by an overzealous Environmental Protection Agency, actions that weaken property rights pose a serious threat to economic growth and prosperity at home and abroad.” 

The International Property Rights Index will provide the public, researchers and policymakers, from across the globe, with a tool for comparative analysis and future research on global property rights. The Index seeks to assist underperforming countries to develop robust economies through an emphasis on sound property law.

To view the report in its entirety visit 

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The Latest Effort in Global Taxation

Posted by Kelsey Zahourek on Monday, March 19th, 2012, 10:07 AM PERMALINK

The prospect of instituting a global tax in some form or another is constantly rearing its ugly head. Bill Gates can often be heard advocating for global taxes on financial transactions, aviation, and energy. There are even serious talks of a U.N takeover of the Internet.

The latest foray into global taxation is calls by international organizations and the WHO to institute a global tax on tobacco products through the Solidarity Tobacco Contribution to fund international projects aimed at alleviating global poverty. The level of taxation would depend on the wealth of the country, meaning the U.S. would be hit at the highest rate. As we have seen numerous times in the U.S., tobacco is a fairly easy target, (see here, here, and here for the many reasons taxing tobacco is a bad idea) but the bigger question is should unelected bureaucrats be able to dictate the domestic policy of a country with very little oversight or transparency. This idea should make anyone uneasy, no matter the funding source, and the answer should be a resounding no.

As Dan Mitchell rightly points out,

“A supra-national taxing authority inevitably would mean bigger government and more statism. As such, it doesn’t matter whether the new global tax is imposed on financial transactions, carbon emissions, tobacco, the Internet, munitions, foreign exchange, pollution permits, energy, or airline tickets….

“Once the precedent of global taxation has been established, then it’s a relatively simple matter for politicians to augment the first levy with additional taxes.”

The WHO proposal is moving at a relatively rapid pace and with little or no regard for the economic impacts of such a proposal. Talks began in 2011 and the goal is to implement the first wave of taxes by the end of this year. There is nothing “innovative” about these taxing schemes. We have been fighting them for years at the domestic level and have seen the economic harm done once they are implemented. Allowing nameless, faceless bureaucrats the same power as elected officials is not only bad policy; it could severely harm future economic growth and investment.


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Risky Business: ExIm is Banking on Short Memories

Posted by Kelsey Zahourek, Paul Petrick on Tuesday, March 13th, 2012, 12:27 PM PERMALINK

On September 30, 2011, the Export-Import (ExIm) Bank’s renewable charter expired, but bureaucratic resiliency has been reaffirmed once again.  This state-run financial institution is the rent-seeker’s dream, funneling taxpayer dollars to politically-connected interests.  Kept alive via continuing resolutions, the ExIm Bank now seeks a full resurrection with the help of a bipartisan cadre of congressman

Founded in 1934, the ExIm Bank operates under a contradictory dual mandate of providing loans that the private sector deemed too risky to make while guaranteeing taxpayers a reasonable rate of return.  America’s experience with subprime mortgage giants Fannie Mae and Freddie Mac exposed the perils of such activity, making it completely unsurprising to find Congressman Barney Frank’s (D-MA) name listed as a co-sponsor of proposed legislation to renew that bank’s charter through 2015 and increase its lending cap from $100 billion to $160 billion.  To paraphrase Karl Marx’s bon mot, history is repeating itself.

Equally concerning is the detrimental effects of the ExIm Bank on those businesses who lack friends in high places.  Much of the ExIm Bank’s activity in recent months has involved financing Boeing’s efforts to obtain contracts from major Asian airlines.  While great news for Boeing, the result of these loan guarantees is that domestic airlines are forced to pay more for new aircraft than their foreign competitors.  This type of activity has cost domestic airlines as much as 7,500 jobs and $684 million per year.

President Obama, whose administration has an extensive record of assisting favored industries at the expense of others, naturally supports expanding the size and scope of the ExIm Bank.  However, in his 2012 State of the Union Address, President Obama declared that “government should do for people only what they cannot do better by themselves, and no more.”  Surely, a government owned and operated bank is superfluous in a world where there is a plethora of well-functioning financial institutions.  The best scenario for American taxpayers is for Congress to deny the ExIm Bank’s attempts at a Lazarene comeback.  Barring that, Congress should insist on more transparency from the ExIm Bank, especially when it comes to internal studies examining the harm the bank’s activities inflict on domestic industry.  Requiring the ExIm Bank to live up to its congressional mandate should not be too much to ask.

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It's Time to End the Harmful Sugar Program

Posted by Kelsey Zahourek on Tuesday, November 1st, 2011, 10:17 AM PERMALINK

As Congress looks to draft the 2012 Farm Bill, many members of Congress have set their sights on repealing one of Washington’s most indefensible program—the sugar program. Earlier this year, Sen. Lugar (R-IN) introduced the “Free Sugar Act of 2011,” designed to repeal the sugar program that has kept sugar prices artificially high through price manipulation, import quotas, and tariffs. Sen. Kirk (R-IL) and Sen. Shaheen (D-NH) introduced a similar piece of legislation, the “SUGAR Act,” aimed at phasing out the antiquated program.

ATR sent a letter (pdf) to members of the Senate highlighting the harmful economic consequences of the sugar program, stating:

The current sugar program was introduced in 1934 with the goal of lowering sugar production and raising sugar prices. Unfortunately, it has done this well. The result has been that sugar prices in the U.S. are twice the world market price, costing business and consumers that use sugar over $4 billion annually.  Even worse, the current system hurts U.S. manufacturers of sugary goods as foreign competitors can purchase sugar at half or even a third the price of U.S. manufacturers. This places them at a tremendous disadvantage.  Ultimately, these policies have cost the economy 112,000 jobs over the last two decades.

It’s time to end this outdated program that benefits a few wealthy farmers at the expense of all consumers. ATR supports any legislation that repeals this inexcusable handout.

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Another Bill, Another Buy American Mandate

Posted by Kelsey Zahourek on Thursday, October 20th, 2011, 9:53 AM PERMALINK

This afternoon, the U.S. Senate will be voting on an amendment to H.R. 2112, the Agriculture-Commerce-etc. appropriations bill for FY 2012. The amendment, #789, is being offered by Senator Merkley (D-OR). Below is a legislative alert sent by Americans for Tax Reform opposing the measure.

Senator Merkley’s amendment would require that all steel, iron, and manufactured products used on freight transportation projects be made in the U.S.

The motivation behind “Buy American” may make political sense, but it makes horrible economic sense. Such protectionist measures raise costs for consumers and businesses.  Not only do “Buy American” provisions restrict growth, they inevitably cost more jobs than they purport to create.

At the behest of President Obama, Democrats in Congress have already attempted to use this same protectionist provision.  “Buy American” mandates in the 2009 $787 billion spending package have clearly not helped create the jobs that legislators have promised.  Unemployment hovers above nine percent, yet populist sentiments urge you to make the same mistake twice.  According to the New York Times, employers across the country were forced to lay off workers as a direct result of “Buy American” requirements in the bill.  One factory in Pennsylvania let go of 600 employees because some of its products include goods produced overseas.

Additionally, “Buy American” mandates raise barriers to trade and endanger American businesses to retaliation from trading partners. If the federal government is serious about spurring the creation of new jobs, Congress should focus on lowering taxes and spending, while encouraging the administration to pursue new free trade agreements. 

Free trade reduces prices for consumers, promotes innovation, and naturally creates jobs in the private sector.  Protectionism appeals to a populist agenda and the will of big labor, without yielding the intended results, as history has shown.  As American companies struggle to hire new workers, it is a terrible idea to introduce mandates that will raise employers’ costs further.

Click here to view pdf

Now Was That So Hard? Free Trade Agreements Overwhelmingly Approved by Congress

Posted by Kelsey Zahourek on Thursday, October 13th, 2011, 9:04 AM PERMALINK

Last night, the House of Representatives and Senate voted overwhelmingly in favor of the free trade agreements with Colombia, Panama and South Korea. All three agreements passed on a bipartisan basis, with a strong show of support by Republicans.

“A free economy is a growing economy and last night Congress made an important step towards increasing our competitiveness, lowering prices for consumers, and adding jobs to our economy,” stated Grover Norquist, president of Americans for Tax Reform, “It’s unfortunate that Americans had to wait three years for the President to submit these agreements to Congress while unemployment rose above nine percent. It just goes to show that in this Administration, politics trump economics.”

The White House estimates that the three agreements combined will increase U.S. exports by over $13 billion. The South Korean agreement alone is estimated to create over 70,000 jobs nationwide. Passage of the free trade agreements with Colombia and Panama will open up new markets for U.S. manufacturing and agricultural products while providing consumers with lower priced products at home.

Click here for pdf of press release

Excessive Regulations: The Case of Gibson Guitars

Posted by Kelsey Zahourek on Wednesday, October 12th, 2011, 5:19 PM PERMALINK

The following is cross-posted from the Property Rights Alliance

The jobs issue is, rightly so, on the mind of nearly everyone in Washington these days. With the defeat of the President’s so-called “jobs bill” in the Senate, the White House vowed to push forward measures one-by-one that would be job creators. One area to begin is by looking at the impact of burdensome federal regulations on the economy and jobs and immediately seek to reform or eliminate the vast majority.

Earlier this week, the Property Rights Alliance wrote about abuses that occur under the Endangered Species Act. The piece highlighted how expansion of ESA regulations has cost cattle ranchers, farmers, and businesses their livelihoods and countless jobs. The timber industry in the Pacific Northwest was nearly wiped out due to the spotted owl being placed on the list. My colleague, Christopher Prandoni has written about how proposed regulations by the Environmental Protection Agency will cost hundreds of thousands of jobs in the energy, infrastructure, and technology industries.

Another out of control regulation is the little known Lacey Act, originally passed in 1900 to regulate the trade of wildlife and expanded in 2008 to curb illegal logging. Under the Act, if the U.S. government interprets that a foreign law, concerning the exportation of wood or wildlife, has been broken it is up to the U.S. government to conduct raids and confiscate said products.

The Heritage Foundation recently wrote about overly broad criminal prosecution under the Lacey Act. Heritage cites an example where a small business owner spent six and a half years in confinement because he used plastic instead of cardboard to wrap fish, which federal prosecutors determined violated Honduran law. (The Honduran government said otherwise).

The most recent case that brought problems with the Lacey Act into the fore was the August 24 raid on Gibson Guitar’s Nashville and Memphis factories by armed federal agents. The Department of Justice seized 10,000 fingerboards, 700 guitar necks and 80 guitars as part of an investigation into whether the company had illegally imported ebony from India. All told, this raid has cost Gibson over $1 million and charges have yet to be brought against the company.

Gibson maintains its innocence and is still struggling to get back property from a 2009 raid (involving ebony imported from Madagascar), even though charges again were never brought against the company. Moreover, both Madagascar and Indian government officials have stated the exports were allowed under those countries’ laws. So apparently, not only does the DOJ interpret and enforce U.S. law, it has taken it upon itself to interpret, how they see fit, the laws of any nation on earth.

The Gibson case has nothing to do with conserving the world’s most valuable trees; rather this is protectionism at its worst. According to the Wall Street Journal, defenders of the regulations include the U.S. timber industry (the very industry nearly decimated due to another overly broad environmental regulation) believing “it has preserved U.S. jobs in timber, furniture and retail sectors and helped boost U.S. exports of wood products to foreign buyers…” In other words, one industry refuses to compete in the marketplace and therefore needs what is essentially a government subsidy at the expense of a vast number of U.S. businesses. The Administration tried to achieve the same results with “Buy American” provisions in the 2009 stimulus bill. What resulted was more expensive products for Americans and jobs lost because of higher input costs.

Gibson prides itself on making high quality guitars that produce an amazing sound. It just so happens that the materials needed to make the iconic instruments are located outside the United States. The only other option, as pointed out by four leading Republicans in the House, would be for Gibson to manufacture the guitars outside the U.S. with the same wood and then import them into this country. Under this scenario, they would be in compliance with the Lacey Act. Not a great idea for job creation, especially when Gibson added 600 employees to its workforce during a recession.

Additionally, Gibson Guitars would be first in line to talk of the importance of forest conservation. In the past, they have partnered with environmental groups, Greenpeace and the Rainforest Alliance to promote better forestry practices. Simply put, no more wood, no more guitars.

While being rather high profile, this is just another incident in a series of many that highlight the need for serious reform and elimination of thousands of federal regulations.

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ATR Supports Passage of Free Trade Agreements with South Korea, Colombia, and Panama

Posted by Kelsey Zahourek on Tuesday, October 11th, 2011, 4:06 PM PERMALINK

The trade agreements with South Korea, Colombia, and Panama are vital to economic growth and job creation in the U.S. According to the U.S. International Trade Commission, together the agreements will increase exports by $13 billion.

  • The U.S. International Trade Commission estimates passage of the US-Korea free trade agreement would increase U.S. exports by over $10 billion and create 70,000 American jobs.
  • Once the Colombian deal is enacted, the ITC estimates the U.S. will increase exports to Colombia by $1.1 billion and will increase U.S. GDP by $2.5 billion. The American agricultural industry will see their exports double with the passage of this agreement.
  • While more than ninety percent of imports from Panama are duty free, U.S. products still face tariffs when entering Panama. The Panama FTA will eliminate this trade barrier, creating new export opportunities for American farmers and ranchers.

America continues to remain at a competitive advantage when it comes to international trade. Once again, ATR strongly supports passage of the South Korean, Colombian, and Panamanian trade agreements. Our nation’s economic growth depends on them.

ATR may rate votes on the three agreements in our annual Congressional ratings.

Click here for pdf

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Tariffs on Chinese Imports Hurt American Consumers More Than China

Posted by Kelsey Zahourek on Tuesday, October 11th, 2011, 11:16 AM PERMALINK

The Senate will be voting today on a bill that would place import tariffs on countries such as China, deemed to be currency manipulators. Rather than punishing China, this bill will do more harm to American companies and consumers who rely on low priced products to run their businesses and budget their households. Additionally, this legislation will almost certainly spark an unnecessary trade war with one of our largest trading partners, hitting American companies who rely on exports.

As the Senate continues debate on S. 1619, the “Currency Exchange Rate Oversight Reform Act of 2011,” Americans for Tax Reform would again like to reiterate this organization’s opposition to unilateral action that would impose substantial tariffs against countries, such as China, that are deemed currency manipulators. Tariffs are taxes and any increase in the price of imports is immediately passed on to consumers.

There’s no doubt that China manipulates its currency, yet the route this legislation takes does more harm to the U.S. than China. While, protectionist measures are often enacted for the purpose of shielding domestic industries from "unfair trade practices," all indications are that they instead punish the multiple industries that rely on imports for their material inputs such as steel and raw materials. When input costs increase as a result of a rise in import tariffs, industries must cut costs elsewhere, the most likely being labor costs, meaning jobs.

As Congress looks for ways to encourage economic growth, enacting policies that avoid protectionism and boost exports will do much more in the immediate and long term to promote growth than any program, foreign and domestic, that allows government to take money out of the hands of the American people.
Click here for pdf

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ATR Opposes S. 1619, the "Currency Exchange Rate Oversight Reform Act of 2011"

Posted by Kelsey Zahourek on Tuesday, October 4th, 2011, 12:06 PM PERMALINK

This proposal paves the way for the United States to slap punitive tariffs on imports from countries, such as China, believed to be undervaluing their currency. By increasing tariffs on Chinese imports, and imports from countries deemed to have an undervalued currency, this bill will most certainly result in retaliation by our largest trading partners, hurting consumers at a time when disposable income is hard to come by.

Tariffs are taxes and any increase in the price of imports is immediately passed on to consumers. While, protectionist measures are often enacted for the purpose of shielding domestic industries from "unfair trade practices," all indications are that they instead punish the multiple industries that rely on imports for their material inputs such as steel and raw materials. When input costs increase as a result of a rise in import tariffs, industries must cut costs elsewhere, the most likely being labor costs, meaning jobs.

Click here for a PDF version.

Click here for alert supporting S.A. 680

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