Taxes

Mitt Romney introduced his economic reform plan today in USAToday. The 59 points follow:

Every Friday, Jennifer Rubin, the Right Turn blogger on the Washington Post web site, asks her readers a question. On Sundays, she picks one or two answers posted by commenters on her blog and comments on the thread that she started.

This week's question: "What does [Rick] Perry need to do to maintain his momentum and begin to minimize doubts about his electability?"

This morning she picked two answers. My post about my eight ideas for stimulating consumer spending and hiring was one of the two answers she picked out of a bunch of good comments that followed her question. That thread is here. My slightly edited and expanded version of my comment, which I posted on this blog, is here.

Rubin summarized the answers this way:

I was struck by two important assumptions running through the answers. First, unlike many in the right blogosphere, the readers did not dismiss criticisms of Perry out of hand or characterize them as creations of the liberal media. They want to put Perry through the paces, and they understand there are real concerns about his candidacy. Second, it is apparent that readers are sick of platitudes and one-liners; they want detailed proposals and an explanation as to how the candidate’s background equips him to deal with our current national challenges. If Right Turn readers are representative of the Republican primary electorate, the party is in very good hands. The primary process is a time for not only choosing, but probing and testing.

U.S. House Majority Leader Rep. Eric Cantor (R-VA) is promising to work with President Obama to stimulate consumer spending that is needed to create jobs, and he asked for comments on his response to Friday's dismal jobs report. I doubt that President Zero really wants to work with Cantor or the Republicans, because that would cost him the support of the House Progressive Caucus and the Hard Left.

I posted this comment, which I've edited and expanded a bit:

How to stimulate consumption that will cause businesses to hire more people:

What's interesting is that Perry, Bachmann and Romney all are Big Intrusive Government Republicans on both fiscal and social issues. 

Perry has a long record of using state and federal funds to create government jobs and invest in the business startups of his largest campaign contributors. That he's played Texas politics as far as legally possible makes him look like a Chicago Obama Democrat.

Romney is trying to appeal to U.S. Chamber of Commerce government contractors, The Business Roundtable's beneficiaries of government spending and higher taxes and Obama Democrat Warren Buffett who wants higher taxes for the rich instead of tax reforms that would eliminate his lucrative tax loopholes. Ethanol and Mandate Romney endorses Gorean global warming alarmists who want more centralized planning and government spending on not only ethanol but other GE green energy and medical products and services.

Elvis Bachmann is known for a gaffe a day, and today she predicted that as president she would have her centralized Big Government planners cut the cost of gasoline below $2. Of course, that would be after her secretary of Commerce, Mitt Romney, who's known as Mr. Fixit, turned the economy around during Bachmann's first three months in office.

All three of these Big Government Republicans say they would create jobs as president. How they can say this after watching Obama's job-creating efforts actually kill jobs is as baffling as Bernanke's quantitative easings and devaluations of the dollar.

Why is Warren Buffett backing Obama's higher taxes?

Motivations are important. So we have to ask why Warren Buffett is an Obama Democrat. We know that is life is consumed by his efforts to make money and otherwise indulge himself, which is ok so long as he doesn't break any laws. 

Note, first, that Obama has awarded Buffett some kind of medal at a White House ceremony that is frequently replayed on cable TV.

Then look at the kind of businesses he's in. Regulated utilities, a railroad, home building, home building supplies, consumer and industrial goods and regulated and unregulated insurance industries. The private aircraft that he rents to Hollywood stars and uses himself use federally subsidized airports. 

All of these companies benefit from huge tax subsidies and credits as well as from other government subsidies that are supported by Obama Democrats. They also benefit from over regulation, which keeps new entrants from taking on some of his most profitable businesses.

No doubt, many of Buffett's more than 200 companies sell a lot of stuff and services to the Feds and to companies and local governments that depend on federal funding. Buffett wants to keep that money flowing.

Buffett's Berkshire Hathaway is buying the Marmon Group, enriching Peggy Pritzker, a top fundraiser for Obama, and her family. What kind of conflicts of interest does Buffett have in that deal?

Buffett made billions betting on Obama's favorites, General Electrick and Goldman Sachs, which Bush and Obama bailed out.

Buffett is a Big Business Guy who loves a Big Business, Big Labor and a Big Government president like Obama. 

Everything Buffett does is done for money. There is no question that he wants the government to raise spending and taxes so that his investments pay off better and better as the taxing and spending grows.

Finally, Buffett is the most self-promoting Big Business CEO in the world. His backing for higher taxes is just another way to get him on TV.

John Andrews has written a book, Responsibility Reborn, that many Small Government Americans will want to read.

Everyone knows how complex the state and federal tax codes are. The Wall Street Journal warns speculators to avoid trading commodity Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs) and those that own multilateral partnerships because the cost of preparing tax reports on those trades quite likely will exceed trading profits. (Paid sub required.) 

It's better to trade the stocks of companies that produce and process commodities and the stocks of multilateral partnerships than the ETFs and ETNs that own them.

What I want GOP candidates to promise:

Republicans and Democrats need to read Tyler Cowen's new 15,000-word book, The great stagnation: How America ate all of the low hanging fruit of modern history, got sick and will (eventually) feel better. It's a $4 ebook at Amazon and will be published in hard cover June 9. 
 
The highly regarded economist and blogger (http://www.marginalrevolution.com), blames the financial crisis on the reality that "We thouight that we were richer than we are." Further, he says we're still stuck with the dangerous optimism that we can grow out of what may become a double dip recession.  
 
That won't happen, he warns, because the low hanging fruit of innovation and great opportunities have been picked for 40 years and it will be awhile before a new development like free 18th and 19th century land, the rail roads, telegraph, phones, autos, air planes, etc. comes along.  
 
Thus, politicians can no longer credibly promise that tax cuts or more government spending will cause the economy to grow more than 2% a year. He predicts that as a result, Big Government growth will slow or even disappear and that our future depends on our ability to reform education and encourage our brightest to become scientist and engineers. He says we must celebrate scientists and engineers and give them the status of today's investment bankers, lawyers and physicians. 
 
Bottom line: No president nor Congress can claim to have the solution for our slow economic growth. To make such claims shows a lack of integrity and a total misunderstanding of where we are in the economic development cycle. 
 
Along the way, Cowen relates how America picked the low hanging fruit to become the most prosperous and powerful nation in the world. He explains that modern communications generated Big Governments around the world, that increased spending on education since 1970 has provided few benefits to kids and that increased government spending on health care is not stimulating growth. 10% of the book is filled with fascinating notes. There is no index. 
 
David Brooks calls the book the most debated book of the year. This week's Business Week has a glowing story about Cowen. Take a couple of hours and catch up on the thinking of one of today's leading and best informed libertarians and economists.

The Denver Post, Democrats and Gov. Hickenlooper are showing their true colors. They  are spend and tax liberals who are willing to destroy private sector jobs in Colorado in an effort to preserve the jobs of ineffective teachers, unneeded school administrators and state employes who have little useful work to do. The Post endorsed higher taxes in an editorial this morning.

The Denver Post editorial page writer, Alicia Caldwell, continues to hype the findings of its panel of former members of the Colorado General Assembly. I posted the following in the comment section that follows the Post's defense of the panel's feckless findings:

With all due respect, the Big Government spend and tax Republicans and Democrats on the Panel fufilled the mission that the Big Government Denver Post editorial board gave them. 

The mission was to justify higher taxes, protect bloated government programs, call for increased spending on K-12 education and try to stop spending cuts in higher education, subsidies and tax credits for special interests and cuts in spending on transportation. 

Mission accomplished. The panel's report is credible only in the eyes of its members, a few Denver Post editorial writers, public employee unions, the Denver Metro Chamber and contractors and academics who slop at the public trough.

Even the Republicans on the General Assembly Joint Budget Committee appear to be protecting their contributors in the gimme community of government contractors. Frank McNulty, the Speaker of the House, a GOP lawyer, refuses to restructure and cut K-12 education spending and delay new spending on roads, bridges and infrastructure. He's even protecting the increase in the car tax, which the transportation lobby loves. However, Speaker McNulty said last week that higher education will take a spending cut this year.

Colorado continues to look like an Illinois wannabe.

Politicians have neither the skills nor the credibility to fix the state budget in ways that will encourage consumers to spend and businesses to grow in Colorado. 

What Hick and the legislature should do is hire Bain or some other strong management consulting company (not the big accounting firms) that doesn't work for state or federal governmental agencies to put together a turnaround plan. 

What the Post should do is hire two or three strong private sector economists, budget analysts and strategists to write a series of articles that show the public and the politicians how Colorado's laws and regulations can be changed. 

Show how the laws and budgets can be fixed so that Colorado won't follow Illinois, NY, California and other states into some form of default or bankruptcy. It is clear that the current editorial page staff doesn't have a clue.

Frankly, if you haven't figured it out already, I think the Post's panel did a tremendous disservice to Colorado. It was disingenuous and dishonest about what can and should be done. Maybe the panel's members just don't know any better.

Colorado House Speaker Frank McNulty said this morning that he backs Dick Wadhams for re-election as chairman of the Colorado Republican Party. McNulty told a breakfast meeting of the Arapahoe County Republican Mens (and women's) Club that Wadhams did a  very good job navigating Colorado Republicans through the 2010 elections. "Dick is the right guy to lead us through the 2012 elections," McNulty said. Wadhams has announced that he is running for a third two-year term as chair. A new GOP central committee will elect the state pary's chair on March 13.

In response to my question, McNulty also said that he opposes the Medical Marijuana bill (HB 1043), which would make it easier to grow, sell, prescribe and buy pot. He said pot legislation "will go through several iterations" in the 2011 session of the General Assembly.

In response to a question about cutting the car tax increase that was enacted last year, McNulty said cutting would be a symbolic victory and that he is focused on winning real victories, not symbolic ones. In other words, he's not going to make repealing FASTER or cutting the car tax until he achieves his major goals.

McNulty said that the top priority for House Republicans is to cut state spending and to reform job killing regulations on the oil and gas and other industries. His second and fall back priority, he said, is to stop the Democrat-controlled Senate and Gov. John Hickenlooper from increasing spending.

However, McNulty said, he is not for cutting spending on K-12 education.

Higher education is another story, he said. The most money in the state budget that can be cut goes for higher education, which will take a hit, McNulty said.

When I asked whether the legislature can take power away from the faculty in higher education so that they no longer can block cost cutting efforts, McNulty said that Republicans will try to give the top executives and boards of the state's universities and community colleges more power to cut costs by reforming civil service laws that make it very difficult for them to layoff people. 

I hope to post clips of McNulty's comments this evening.

LINKS:

Medical Marijuana (HB11-1043.

A "comprehensive list of tax hikes in ObamaCare" is here.

Presumed Republican presidential candidate, Mitt Romney, writes in USA Today that the GOP's deal with President Obama will hurt employment and the U.S. economy over the long term. While the short-term deal looks like a pretty good compromise for Obama's re-election prospects and for tax payers, Romney is correct when he says the deal will not produce the desired increases in employment because during the next two years, politicians will be fighting over extending the deal instead of reforming our broken tax and spend culture. Meanwhile, Romney is showing that he is in Sen. Jim DeMint's (R-SC) camp and agrees with fiscally conservative tea party supporters. LiNK: Why tax cut is a bad deal, by Mitt Romney.

President Obama and Colorado's Democrats in Congress apparently will agree to extend the Bush tax cuts and avert more Obama tax hikes only if Republicans agree to higher spending on extended unemployment benefits.

 Extending the unemployment benefits will ensure high levels of unemployment for years to come. Too many of the unemployed make more by avoiding low-paying jobs and staying on the dole. If the benefits were cut, unemployment rates would soon dip. How much they would drop if benefits weren't extended is hard to predict. At least I haven't seen any predictions on what would happen if benefits weren't extended.

Both Democrats and Republicans are playing to their bases in the deal that Obama announced last night, which is subject to approval by hard left Democrats who control Congress until next year.

Republicans are reasonably assuming that averting the Obama Democrats' tax hikes and new tax cuts that will be part of the deal will help the economy more than the additional spending will hurt it.

The tentative agreement to exempt estate, or death taxes, on the first $5 million in an estate and then tax the balance at 35% looks like a pretty good compromise, too. Of course, it would be smarter to completely eliminate estate taxes, but the redistributionists make that politically impossible.

Compromise has made America the wealthiest country in the world, and it's good to see a little compromise after two years of Obama's way or the highway.