How to Get Your Country off the Sh*t List

An open letter to the leaders of Eritrea, Afghanistan, Equatorial Guinea, Turkmenistan, Belarus, Sudan, Pakistan, Venezuela, Zimbabwe, and other countries too numerous to list here.

Dear Sirs (and you are all men, so I am safe in that generalization) —

All of your countries remain, to greater and lesser degrees, targets of international opprobrium. The reasons are largely predictable: corruption, repression, the usual extravagant mismanagement. Many of you have tried entirely predictable tactics to improve your standing: hiring small armies of expensive K Street lobbyists and paying for splashy 10-page advertising sections about your countries in Western newsweeklies. None of it has made much of a difference. The aid dollars are starting to dry up, or have already done so, and it is getting hard and harder to use the global war on terror to justify your stranglehold on power.

What to do? Well, there is a useful alternative if you truly wish to get your country off the international shit list. I present President Joyce Banda of Malawi, who has almost completely reversed her country's international image in the three short months she has been in power.

You may remember her predecessor, President Bingu wa Mutharika, whose style resembled many of your own. Once heralded as a reform-minded former World Bank technocrat, Mutharika degenerated as his behavior became more and more erratic and autocratic. In 2005, he abandoned the $100 million presidential palace in Lilongwe -- not because he was embarrassed by living in such outrageous opulence in a country where 90 percent of the population toil in poverty, but because he declared the residence to be haunted by phantom rodents that he could feel but not see. He subsequently purchased a 58-room mansion in his home district and put his wife on the payroll. Mutharika also purchased a $14 million private Dassault Falcon 900EX jet in 2009 along with a fleet of 60 Mercedes limousines. Trying to contain public outrage over the purchase of the jet and its $340,000 in annual operating costs, Mutharika insisted, "The jet is that I purchased is not mine. It belongs to the nation. It will be used by 10, 11 other people coming after me. So that's an asset."

Along with the high living, Mutharika grew increasingly intolerant of dissent. He accused opposition protestors of being "led by Satan" and warned darkly of foreign agents trying to subvert his rule. He expelled the British ambassador and told international donors to "go to hell." Freedom House warned that Malawi was spiraling downward "due to the government's violent suppression of public protests, intimidation of journalists, and threats to academic freedom." The result: The IMF suspended loans in 2011 in large part due a dispute over Mutharika's handling of the currency; British aid was halted; and the Millennium Challenge Corporation put its $350 million compact with Malawi on hold because of actions "inconsistent with the democratic governance criteria that MCC uses to select its compact partners."

In April, when Mutharika was felled by a heart attack (which he might have survived had the Ministry of Health been better stocked with medicines that were largely absent because of the currency crunch), his vice president, Joyce Banda, came to power.

Banda is an atypical African president. Not only is she a woman, she had a degree in early childhood education and ran a series of small businesses and NGOs before she got into politics. When Banda came to power, Malawi's former first lady, Callista Mutharika, was not amused. "She will never be president. How can a mandasi seller be president?" said Mrs. Mutharikain. (Mandasi are Malawi's version of fritters.) Banda reacted with aplomb: "Yes, she's right, I'm indeed a mandasi seller, and I'm proud of it because the majority of women in Malawi are like us, mandasi sellers," she retorted.

What makes Banda such an important model for all of you is not her background, though, but the steps she has taken since being sworn in as president.

Declaring, "I'm already used to hitchhiking," Banda announced her plans to sell or lease the Dassault Falcon jet bought by her predecessor. "Why did we have this in the first place?" she wondered, as she demurred that she preferred to fly coach. Similarly, Banda declared that she would sell off the pool of 60 government-owned Mercedes. She fired the powerful police chief implicated in shooting 20 democracy protestors to death the year before, launched an investigation into the death of a prominent student activist, and devalued the currency by 40 percent -- long a demand of international lenders. Banda worked with parliament to rescinded draconian laws that made it illegal to be homosexual, pragmatically citing the importance of "our traditional development partners who were uncomfortable with our bad laws." With Malawi slated to host an Africa Union Summit in July, Banda made clear that Sudan's president, Omar al-Bashir -- wanted on genocide charges in The Hague -- was not welcome. Tone-deaf African Union officials sniffed that Banda could not "dictate who could attend the summit." Banda suggested in reply that the AU could take its ball and go home. She noted that Malawi had commitments to other international institutions beyond the AU, and it did not need to host the summit, which will now be held in Ethiopia.

In June, Banda visited Washington, winning over officials and observers in the process. I watched her speak at a small gathering of powerful Washington women insiders, all of whom seemed genuinely affected when the president described how most women in her country have to take candles to the hospital when they deliver children because of the frequent power outages. She hammered home several basic points: She was committed to fighting corruption; Malawi needed to invest more in its women and children; and it was the people and their elected officials, not just her, that had to guide the country toward a better future.

Just like that, the IMF restored a $157 million loan, the $350 million Millennium Challenge Corporation compact was reinstated, and other U.S. and British aid flows resumed.

Who knows how this plays out in the long run? It is important to remember that Mutharika launched promising reforms and had good relations with donors before he succumbed to advancing megalomania. Plenty of presidents start strong and then succumb to the usual temptations of power. Banda still has enormous challenges in front of her, and she'll need to match her savvy flair for public relations with sound day-to-day managerial and political skills. She will also need to tread carefully to ensure that her early efforts to curry favor with international donors do not trigger a nationalist backlash over the long haul. But for now, one of Banda's biggest challenges is coordinating all the people and organizations that suddenly want to help her country. There is a lasting lesson there for all of you, or at least any of you willing to make a change.

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Tea, Taxes, and the Revolution

The Founding Fathers would revolt if they saw America’s tax burden today.

When demonstrations erupted nationwide in March and April 2009 in opposition to the tax and spending policies of the just-inaugurated Barack Obama administration, the protesters named their movement and cause after the Boston Tea Party of Dec. 16, 1773, when Massachusetts colonists dumped British tea into Boston Harbor in the world's most famous tax revolt. Thus was the "Tea Party" movement reborn.

The Tea Party name suggests an anti-tax protest rooted in American history and consistent with the original intent of our nation's founding. If one is grabbing the political high ground in an American debate, this is the equivalent of placing your cannons atop Bunker Hill. (The Tea Party, it is worth noting, is assigning itself the winning team in that previous conflict.)

Is the comparison accurate or invented? How does the level and modes of taxation in modern America compare with the taxation of the British colonies, which led to an eight-year war that cost 25,000 American lives and ultimately broke apart the British Empire to create the United States of America? What parallels or paradoxes exist?

Americans often observe that our national independence was born of a tax revolt. But taxes, or the lack thereof, played a key role in the colonies long before Samuel Adams and his Sons of Liberty. The 1629 Charter of Massachusetts Bay granted settlers a seven-year exemption from customs taxes on all trade to and from Britain and a 21-year exemption from all other taxes. In 1621, the Dutch government granted the Dutch West India Company an eight-year exemption from all trade duties between New Amsterdam/New York and the mother country. Swedish settlers in Delaware were offered a 10-year tax exemption. America, in other words, was in part created as a tax haven populated with immigrants moving from high-tax nations to low-tax colonies.

By 1714, British citizens in Great Britain were paying on a per capita basis 10 times as much in taxes as the average "American" in the 13 colonies, though some colonies had higher taxes than others. Britons, for example, paid 5.4 times as much in taxes as taxpayers in Massachusetts, 18 times as much as Connecticut Yankees, 6.3 times as much as New Yorkers, 15.5 times as much as Virginians; and 35.8 times as much as Pennsylvanians.

Low-taxed Pennsylvania was founded by William Penn, the father of American religious liberty, who also notably refused the Pennsylvania General Assembly's kind offer to establish an import and export tax for his personal benefit.

Taxation in the colonies consisted of property taxes, poll taxes on men over 18, excise taxes, and forced labor contributions of a few days a month to build roads and assume other "public functions" such as constable, assessor, or "hog reeve" ("an officer charged with the prevention or appraising of damages by stray swine," according to the Oxford English Dictionary).

Massachusetts imposed an embryonic income tax in 1634 in the form of a "faculty" tax. In 1643, Alvin Rabushka writes in Taxation in Colonial America, "assessors were appointed to rate inhabitants on their estates and their faculties, which included personal abilities." One notes with some envy that the tax came to about 1 percent of what we might call income.

Connecticut, anticipating New York Mayor Michael Bloomberg's nanny-state tendencies, imposed sumptuary laws in 1676 that taxed any person who wore silk ribbons, gold or silver lace, or gold or silver buttons.

By 1775, the British government was consuming one-fifth of its citizens' GDP, while New Englanders were only paying between 1 and 2 percent of their income in taxes. British citizens were also weighed down with a national debt piled up by years of worldwide warfare that amounted to £15 for each of the crown's eight million subjects, while American local and colonial governments were almost debt-free. Against this backdrop, Americans watched as the British monarchy attempted to raise taxes on the colonists to pay down its war debt and pay for the 10,000 British soldiers barracked in the colonies.

The Sugar Act of 1764, a rewrite of the Plantation Duty of 1673, was designed to raise revenue rather than force the colonies to trade with England alone, and fell mostly on molasses, sugar, and Madeira wine. The colonies reacted particularly poorly to the imposition of the Stamp Act of 1765, which was an effort to impose a direct tax on the colonies rather than tax imports and exports. Benjamin Franklin and others argued to the British government that while the colonies did not object to tariffs, they did oppose direct domestic "taxation without representation."

The British parliament got the message, repealing the Stamp Act and responding with the Townshend Acts of 1767, which imposed duties on 72 items, including tea (the changes actually reduced taxes on tea originally imported from British colonies to combat the smuggling of Dutch tea to America). Although the British repealed most of these duties in 1770, they maintained the specific tax on tea to make the point that the crown could tax when it chose to do so. By then, however, the American colonists had stopped distinguishing between domestic and trade taxes and started opposing all taxation and control by Britain, setting the stage for the revolution.

The bottom line: American colonists were both paid more and taxed less than the British. American taxes, in fact, were low and going lower, but the very idea that they had been raised and could be raised again by a distant power was enough to send Americans into the streets to engage in civil disobedience. Regime change followed the tax revolt.

And 239 years later, what has changed?

Americans are still wealthier and taxed less than the citizens of other nations. By some measures, federal taxes are lower today than they were in the past: Today's top marginal tax rate for individuals is 35 percent, which is higher than Ronald Reagan's 28 percent but lower than Dwight Eisenhower's 90 percent. State and local taxes, meanwhile, have undoubtedly been trending upward.

Three shocks to the system early on in Obama's presidency in many ways mimicked the Townshend Acts in convincing Americans they have much to fear in the future.

The first shock came in 2009, when one-party rule by Democratic supermajorities in the Senate and House of Representatives, allied with a president of the same party, ensured that Washington could enact just about any tax or spending legislation it wished. The first of four stimulus bills, signed on Feb. 17, 2009, called for $878 billion in spending, and Congress added another $1 trillion in domestic discretionary spending over the next decade. Modern-day anti-tax activists felt as removed from control of their government as the colonists did in 1775. Promises that taxes would only be imposed on "the rich" were betrayed 16 days into Obama's presidency, when legislation was enacted to increase the tax on cigarettes -- a product whose consumers average $40,000 in annual income.

Second, while the economy stalled, the White House introduced a new and costly entitlement in "Obamacare," which contained 20 new taxes that cost Americans between $500 and $800 billion over a decade. Seven of these taxes directly hit the middle class, and the Congressional Budget Office's 10-year cost estimate for Obamacare officially doubled after the legislation was enacted.

Third, a series of repeatedly renewed yet "temporary" tax reductions were set to expire in January 2011. Left unchanged, the Alternative Minimum Tax, imposed in 1969 to punish 155 rich Americans who invested in municipal bonds, would hit 31 million Americans. The tax rate on capital gains would jump from 15 percent to 23.8 percent, while the dividend tax would increase from 15 percent to 44.3 percent. All told, taxes would increase by about $500 billion in one year alone. (This Taxmageddon was ultimately postponed by two years -- until Jan. 1, 2013.)

The British imposed the de minimis tax on tea to make the point they had the power to implement such measures and more when they wished. Obama, Senate Majority Leader Harry Reid, and former House Speaker Nancy Pelosi passed a 2,600-page entitlement program -- written not in front of C-SPAN cameras as promised, but in camera -- and explained to the rabble that the government had to pass the legislation so that its subjects could learn what was in it.

The American people responded to this display of raw, unchecked power. During the week of April 15, 2009, an estimated 600,000 protesters attended more than 600 Tea Party rallies across the country. These were not student demonstrators, unburdened by jobs or family obligations, but employed, middle-class Americans, most of whom had never been to a political protest and never expected to join one.

These modern Tea Partiers performed surprisingly few "tar and featherings," and yet the establishment media complained about their excessive rhetoric. Still, the protesters never quite rivaled the vehemence with which John Adam denounced the Sugar Act for imposing "enormous taxes, burdensome taxes, oppressive, ruinous, intolerable taxes."

In both 2009 and 1775, opposition to taxes was eventually replaced by a demand for liberty and protection against government power. The Fourth Amendment's protection against search and seizure and "writs of assistance" were specifically designed to protect against the tax collectors of the day searching for smuggled goods and confiscating shipping. Today, after being at the receiving end of what Republican congressmen view as unwarranted and indiscriminate IRS investigations, Tea Partiers are demanding legal changes to prevent the government from using the IRS to police opposition groups.

The 2010 election was a middle-class revolt that ended one-party rule in Washington and gave the opposition a strong majority in the House and strength in the Senate. Obama and Reid have responded to this impertinence with their own Intolerable Acts -- governing through executive orders and regulations, and adding to the spending and debt explosion of the previous two years. There has been no reform, no moderation, and no compromise. Most recently, in the Supreme Court's ruling on Obamacare, Chief Justice John Roberts made it official that no power is beyond the federal government if taxation is used as the whip to enforce compliance.

Luckily, the nation is now moving to the Nov. 6 election rather than Lexington and Concord.

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