Mr. O'Rourke points out that to this day - eventhough back in mainland China's hands - Hong Kong has "no sales tax; no VAT; no taxes on capital gains, interest income or earnings outside Hong Kong; no import or export duties; and a top personal income-tax rate of 15%." They use Profits tax, Salries tax and Property tax. Some call it an "Exemplary Tax System" and the government operates at a surplus.
Here's a point from O'Rourke:
"Cowperthwaite was financial secretary from 1961 to 1971, Hong Kong's period of fastest economic growth. Sir John, however, wouldn't allow collection of economic statistics for fear they'd lead to political meddling. Some statistics nonetheless: During Cowperthwaite's tenure, Hong Kong's exports grew by an average of 13.8% a year, industrial wages doubled and the number of households in extreme poverty shrank from half to 16%."
"With that in mind, I was talking to a friend in Michigan. We discussed Detroit's poverty, crime, depopulation and insolvency."
As he (P. J. O'Rourke) noted in this recent video for the CATO Institute;
"Politicians just want power. They will use the economy to get it, but if you throw them out the door of economics they will come back in through the window of climate change. Now if you pitch 'em out the window of climate change, they'll come down the chimney of income inequality. Any cause will do for politicians because all they want to do is get elected and gain power."
In other words, what they say, and what the consequences of their actions are amount to two different things, and Detroit exposes this in no uncertain terms.
Mr. O'Rourke further advises:
"If people cannot be convinced by reason, maybe they can be convinced by greed. Forty square miles equals 1.1 billion square feet. One recent estimate put Hong Kong land prices at more than $1,300 per square foot. Translated into Detroit, that's $1.4 trillion."
"So my investment advice: go short on Manhattan penthouses and long on empty lots in Detroit."
What is your investment advisor telling you about The Bahamas right now?
We can continue to follow Detroit's path to a slow economic death with ideas like VAT et al, or we can use ideas from places like Hong Kong, that obviously have something right.
