BLOOMING MILLIONAIRES

Let 1,000 millionaires bloom in China and America, Professor Mark Perry writes at Carpe Diem (mjperry.blogspot.com). He focuses on a report issued by the Boston Consulting Group on millionaires in the land where Mao once said “Let 100 Flowers Bloom.” It turns out that in the Communist country, the number of households with more than $1 million in liquid assets has soared to 310,000 at the end of 2006 from 124,000 in 2001. Only America, Japan, Britain, and Germany have more, the Boston Consulting Group reckons.

Professor Perry notes that these households, which account for only 0.1% of the total number of households in China, possess 41.4% of the country’s total wealth. He then quotes a report in the Wall Street Journal saying America’s inequality peaked in 1929 when the top 1% controlled about 48% of the wealth. Quotes Mr. Perry: “We hear a lot of handwringing about income inequality in the U.S., but perhaps there are some lessons from China. When a country experiences significant, dynamic change from new technologies, innovation, globalization, opening of markets, increased competition, etc., income inequality increases because talented entrepreneurs are able to generate huge amounts of wealth at levels that are not possible in a static, insulated, uncompetitive environment.”

Adds he: “Some of the same dynamics that are creating more millionaires and more income inequality in China, are probably also creating the same outcomes in the U.S. Not to worry. Bottom Line: Wouldn’t most Chinese agree (and wouldn’t you agree) that the average person in China today is better off today than 10, 20 or 40 years ago, even though income inequality has never been higher?”

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A GIFT TO THE UNITED NATIONS

The degree to which the proposed Law of the Sea Treaty, up for ratification in the Senate, is a gift to the United Nations is highlighted at the site of the Competitive Enterprise Institute (cei.org/sections/subsection.cfm?section=46), which offers a video called “Simpleton’s Guide to the Law of the Sea Treaty.” It notes that under the treaty, the seabeds under international water would become property of the world body to tax, and that the treaty contains language that would open the door to the United Nations using LOST, as the treaty is known, to extend its legal and ideological reach elsewhere.

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JOIN THE PIGOU CLUB

Greg Mankiw (gregmankiw.blogspot.com) brings to our attention a BBC World Service report that finds a majority of people around the world favor higher energy taxes if the tax revenue is either rebated by lowering other taxes, or used to finance energy-related government programs.

Reactions are mixed, however, on raising taxes on energy sources that contribute climate change. “Overall only 50% are in favor and 44% opposed. Urban Chinese have the largest majority (85%) who would support raising taxes on the fuels that contribute most to climate change,” according to the BBC report.

He continues: “The poll then tested the relative influence of two different design options for an energy tax by asking those who initially did not support a higher energy tax whether they would favor this tax under one of two different conditions: if the revenues were ‘devoted only to increasing energy efficiency and developing energy sources that do not produce climate change’ and if at ‘the same time as your other taxes were reduced by the same amount, keeping your total taxes at the current level.’

“Combined with those who initially supported an energy tax, the percentage who change their position under each condition produces a large majority in every country ready to favor an energy tax.”