Honduras, like America was before it was ruined

This sounds like these immigrants at our southern border might find this mess up here and turn around, at least the ones who aren’t looking for a welfare state. A letter to the Wall Street Journal Nov. 2

I am the developer of one of the Economic Development and Employment Zones, or ZEDEs, in Honduras that Mary Anastasia O’Grady writes about (“Who’s Driving Chaos at the Border?” Americas, Oct. 31). This new type of free-trade zone gives people the option to live where day-to-day governance and most public services are provided by private, for-profit companies.

Residents and companies pay taxes only to the developer, who provides most public goods and services, like security, roads, education and healthcare, and gives 12% of the tax-take to the government to cover the cost of the armed forces, criminal justice and other national-level public goods.

My fellow developers and I expect the competition for clients to massively improve the quality of the services provided and keep costs down. For example, in Ciudad Morazán, my project, the only tax is a flat 5% on income, for firms and individuals.

It might seem impossible with such a low tax-take to do most of what Western governments do. They spend between 40% and 60% of GDP. But as recently as 120 years ago, the U.S. federal tax-take was only 3.5% of GDP. We have been operating for more than a year now, and we are enjoying a small fiscal surplus that will be refunded at the end of the year to residents. We make money only on rents, not taxes.

The ZEDEs are a unique opportunity for development in Honduras as well as a promising experiment. The U.S., and especially those in the country who value freedom and personal responsibility, should keep a keen eye on us. If we succeed, we might become an example to try at home.

Massimo Mazzone

Ciudad Morazán

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One response to “Honduras, like America was before it was ruined

  1. Honduras experiment versus attempting the same protocols in the U.S.: I think it’s an apples-and-oranges comparison. Comparing a single tentacle mollusk to an eight-tentacled octopus in terms if the many activities in which each country is involved domestically and around the planet. Trying this in today’s USA would be like attempting to convert the U.S. government to one based on the political/economic philosophy of libertarianism.

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