High tax states are competitive

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The World Economic Forum has reported that Switzerland, Sweden and Finland are the most competitive economies in the world. According to a report on Tax News.Com:

The Global Competitiveness Report 2006-2007, released Tuesday, said that Switzerland and the Nordic countries topped this year's global ranking due to their sound institutions, competent macroeconomic management, world-class education systems, and focus on technology and innovation.

These factors, according to Augusto Lopez-Claros, Chief Economist and Director of the World Economic Forum's Global Competitiveness Network, combine to form a "successful strategy for boosting competitiveness in an increasingly complex global economy".

"Business activity in these countries benefits from a well-developed institutional framework, characterized by the rule of law, an efficient judicial system and high levels of transparency and accountability within public institutions. Excellent infrastructure is an additional positive feature of the business environment," Lopez-Claros said.

Hmmm. You'll note that all those things require strong government, high taxes and a willingness to use public revenues for the well being of society as a whole.

Forbes has noticed this too. It places Sweden 4th and Finland 14th in its tax misery index, and Switzerland is by no means a low tax state for those who live there. Now it has to be said that the Forbes tax misery index is just about the most spurious statistical survey ever produced, but yet again the myth that high tax means low competitiveness and low levels of enterprise is shattered. As if evidence were needed, Ireland - the supposed 'Celtic Tiger' - came in at 21st on the WEF index whilst the East European flat tax states did even worse.

Enough said, I think.