Economy

November 3, 2008

Once Again, the Press Leaves Obama’s Tax Numbers Unchallenged

Another great op-ed from the WSJ on the random tax numbers quoted by the Obama campaign and the loving press’ unwillingness to put up a question mark. Some highlights:

In the last debate, Sen. Obama said, “We both want to cut taxes, the difference is who we want to cut taxes for. . . . The centerpiece of [McCain’s] economic proposal is to provide $200 billion in additional tax breaks to some of the wealthiest corporations in America. Exxon Mobil, and other oil companies, for example, would get an additional $4 billion in tax breaks.”

That $200 billion figure is false. Yet FactCheck.org and most reporters never bothered to ask Mr. Obama where he came up with it. FactCheck.org did discover that Mr. Obama’s claim about “$4 billion in tax breaks for energy companies” came from a two-page memo from the Center for American Progress Action Fund — a political lobby headed by John Podesta, former chief of staff to Bill Clinton, with tax issues handled by two lawyers, Robert Gordon and James Kvaal, former policy directors for the John Kerry and John Edwards campaigns. Those lawyers confused average tax rates (after credits and deductions) with the 35% statutory rate on the next dollar of earnings, so that cutting the latter rate from 35% to 25% would supposedly cut big oil’s $13.4 billion tax bill by 28.5%, or $3.8 billion. That is not economics; it is not even competent bookkeeping.

The Committee for a Responsible Federal Budget, by contrast, correctly notes that, “Senator McCain has called for the repeal and reform of a number of tax preferences for oil companies,” which would raise the oil companies’ taxes by $5 billion in 2013.

Read the full article here.

October 30, 2008

Shift from Capitalism to Socialism, European Style

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From the WSJ…

The most basic explanation for why Barack Obama may win next Tuesday is that voters want economic deliverance. The standard fix for this in politics everywhere is to crowbar the old party out and patch in the other one. It is true as well that the historic nature of the nation’s first African-American candidacy would play a big role.

Push past the historic candidacy, however, and one sees something even larger at stake in this vote… The real “change” being put to a vote for the American people in 2008 is not simply a break from the economic policies of “the past eight years” but with the American economic philosophy of the past 200 years. This election is about a long-term change in America’s idea of itself.

I don’t agree with the argument that an Obama-Pelosi-Reid government is a one-off, that good old nonideological American pragmatism will temper their ambitions. Not true. With this election, the U.S. is at a philosophical tipping point.

The goal of Sen. Obama and the modern, “progressive” Democratic Party is to move the U.S. in the direction of Western Europe, the so-called German model and its “social market economy.” Under this notion, business is highly regulated, as it would be in the next Congress under Democratic House committee chairmen Markey, Frank and Waxman. Business is allowed to create “wealth” so long as its utility is not primarily to create new jobs or economic growth but to support a deep welfare system.

…

This would be a historic shift, one post-Vietnam Democrats have been trying to achieve since their failed fight with Ronald Reagan’s “Cowboy Capitalism.”

Of course Cowboy Capitalism built the country. More than any previous nation in history, the United States made its way forward on a 200-year wave of upwardly mobile, profit-seeking merchants, tradesmen, craftsmen and workers. They blew out of New England and New York, rolled across the wildernesses of the Central States, pushed across a tough Western frontier and banged into San Francisco and Los Angeles, leaving in their path city after city of vast wealth.

The U.S. emerged a superpower, and the tool of that ascent was simple — the pursuit of economic growth. Now China, India and Brazil, embracing high-growth Cowboy Capitalism, are doing what we did, only their cities are bigger.

Now comes Barack Obama, standing at the head of a progressive Democratic Party, his right hand rising to say, “Mothers, don’t let your babies grow up to be for-profit cowboys. It’s time to spread the wealth around.”

READ IT HERE, [an itemized list of European yoke-style government policies Obama-Reid-Pelosi will install.]

October 28, 2008

Ramirez Cartoon: Obama’s Big Government

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October 28, 2008

U.S. Chamber of Commerce vs. Democrats

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I think the chamber of Commerce knows a thing or two about how economies are built and destroyed. They clearly see a danger in letting the Democrats run away with the government. From the WSJ…

The nation’s largest business lobby, the U.S. Chamber of Commerce, has raised ire among Democratic leaders for pouring millions of dollars into an advertising push to prevent the party from winning dominance in the Senate next year…

The Chamber says it has raised enough money this year from corporations to spend about $35 million on the election, double its budget for House and Senate races in the 2006 election. The group is supporting pro-business candidates, almost exclusively Republicans in contested Senate races.

Business executives fear that Democrats, bouyed by heavy spending from organized labor, could gain enough muscle in the Senate to spark policies favoring increased unionization, higher taxes, more restrictions on trade and more regulation on the financial-services and housing sectors…

The Chamber has spent $10 million on advertising on behalf of pro-business candidates in tight races since the end of August. No other single organization has spent more on Senate races, according to data collected by the Federal Election Commission. The Chamber says it will spend millions more in the final weeks of the campaign.

The Washington-based Chamber represents three million U.S. business and most of the thousands of local chambers of commerce from around the country. The lobbying federation says it doesn’t favor either party, but backs “pro-business candidates” from both. It has no legal obligation to be nonpartisan.

Overall, U.S. businesses tend to contribute similar amounts to Democrats and Republicans in their direct giving to candidates and political parties. Through Sept. 30, companies and their political action committees donated $129.6 million to Democrats and $132.6 million to Republicans.

The Chamber of Commerce is attempting to counteract another major font of funding and influence — the $300 million that organized labor will spend on campaigns during this election cycle, most of it aimed at persuading unionized workers to vote Democratic. Much of that money has gone directly to campaigns: Through Sept. 30, labor unions and their political action committees have given $52.3 million to Democrats and $4.8 million to Republicans, according to data compiled by the nonpartisan Center for Responsive Politics.

Yet another in a very long line of singularly decisionable proofs that Obama and the Democrats are wrong for America. Combine them and I’m shocked that Obama has any but the far-Left sideshow vote.

American fence-sitters are letting temporary emotion and hot-air speech-writing rule the election cycle, rather than substance, experience, and sound policy to our very painful downfall if Obama and and Democrat candidates win.

October 28, 2008

WSJ: Obama Would Europeanize America

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Another must read from the WSJ today…

The only organization with a worse rating than the Republican president is the Democratic Congress—14% approval, 75% disapproval. But there, too, the Democrats will gain strength. They are expected to increase their majority in the House, and current polling shows that in Senate races Democrats will increase their members from the current 51 (including two independents who caucus with the Democrats) to at least 57. They may even achieve the 60 votes needed to overcome a filibuster.

So where is the new Obama administration likely to take us? Seven things seem certain:

The U.S. military will withdraw from Iraq quickly and substantially, regardless of conditions on the ground or the obvious consequence of emboldening terrorists there and around the globe.

Protectionism will become our national trade policy; free trade agreements with other nations will be reduced and limited.

Income taxes will rise on middle- and upper-income people and businesses, and individuals will pay much higher Social Security taxes, all to carry out the new president’s goals of “spreading the wealth around.”

Federal government spending will substantially increase. The new Obama proposals come to more than $300 billion annually, for education, health care, energy, environmental and many other programs, in addition to whatever is needed to meet our economic challenges. Mr. Obama proposes more than a 10% annual spending growth increase, considerably higher than under the first President Bush (6.7%), Bill Clinton (3.3%) or George W. Bush (6.4%).

Federal regulation of the economy will expand, on everything from financial management companies to electricity generation and personal energy use.

The power of labor unions will substantially increase, beginning with repeal of secret ballot voting to decide on union representation.

Free speech will be curtailed through the reimposition of the Fairness Doctrine to limit the conservative talk radio that so irritates the liberal establishment.

These policy changes will be the beginning of the Europeanization of America. There will be many more public policy changes with similar goals—nationalized health care, Kyoto-like global-warming policies, and increased education regulation and spending.

Additional tax advantages for lower and middle income people will be enacted: a 10% mortgage tax credit that would average about $500 per household per year, a $4,000 tax credit for college tuition, a tax credit covering half of child-care expenses up to $6,000 per year, and even a $7,000 credit for purchase of a clean car.

More important, all but the clean car credit would be “refundable,” meaning people will get a check for them if they owe no taxes, which is simply a transfer of income from the government to individuals. In reality this is the beginning of a new series of entitlements for middle-class families, the longer-term effect of which will be to make those families more dependant on (and so more supportive of) larger government. The Tax Policy Center estimates that these refundable tax credits would cost the government $648 billion over 10 years.

These are Mr. Obama’s plans. Meanwhile, congressional Democrats would increase spending for their own interests and favorite programs. More important, the Congress will consider itself more important than a freshman president who has never held an executive position, so they will do what they want and he will have to go along with most of it.

READ IT HERE

October 22, 2008

Obama and the Tax Tipping Point

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Another great WSJ op-ed piece…

Other nations have tried the ideology of fairness in the place of incentives and found that reward without work is a recipe for decline. In the late 1970s and throughout the 1980s, Margaret Thatcher took on the unions and slashed taxes to restore growth and jobs in Great Britain. In Germany a few years ago, Social Democrat Gerhard Schroeder defied his party’s dogma and loosened labor’s grip on the economy to end stagnation. And more recently in France, Nicolas Sarkozy was swept to power on a platform of restoring flexibility to the economy.

The sequence is always the same. High-tax, big-spending policies force the economy to lose momentum. Then growth in government spending outstrips revenues. Fiscal and trade deficits soar. Public debt, excessive taxation and unemployment follow. The central bank tries to solve the problem by printing money. International competitiveness is lost and the currency depreciates. The system stagnates. And then a frightened electorate returns conservatives to power.

The economic tides will not stand still while Washington experiments with European-type social democracy, even though the dollar’s role as the global reserve currency will buy some time. Our trademark competitive advantage will be lost, and once lost, it will be hard to regain. There are too many emerging economies focused on prosperity and not redistribution for the U.S. to easily recapture its role of global economic leader.

Tomorrow’s children may come to question why their parents sold their birthright for a mess of “fairness” — whatever that will signify when jobs are scarce and American opportunity is no longer the envy of the world.

READ IT HERE

October 21, 2008

Obama Plans To Sock It To Small Business

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More clear evidence of his advisors’ lack of understanding from another Wall Street Journal article…

Mr. Obama’s tax increase would hit the bottom line of small businesses in three direct ways. First, because 85% of small business owners are taxed at the personal income tax rate, any moderately successful business with an income above as little as $165,000 a year could face a higher tax liability. That’s the income level at which the 33% income tax bracket now phases in for individuals, and Mr. Obama would raise that tax rate for those businesses to 36%…

Second, the Obama plan phases out tax deductions (the so-called PEP and Pease provisions), thus raising tax rates imposed on this group by another 1.5 percentage points. Finally, Mr. Obama would require many small business owners to pay as much as a four-percentage-point payroll tax surcharge on net income above $250,000. All of this would bring the federal marginal small business tax rate up to nearly 45%, while big business would continue to pay the 35% corporate tax rate…

Mr. Obama responds that more than nine of 10 small businesses would not pay these higher taxes. Last Thursday he scoffed in response to the debate over Joe the Plumber, saying that not too many plumbers “make more than $250,000 a year.” He’s right that most of the 35 million small businesses in America have a net income of less than $250,000, hire only a few workers, and stay in business for less than four years…

However, the point is that it is the most successful small- and medium-sized businesses that create most of the new jobs in our dynamic society. And they are precisely the businesses that will be slammed by Mr. Obama’s tax increase. Joe the Plumber would get hit if he expanded his business and hired 10 to 15 other plumbers. An analysis by the Senate Finance Committee found that of the filers in the highest two tax brackets, three out of four are small business owners. A typical firm with a net income of $500,000 would see its tax burden rise to $166,000 a year under the Obama plan from $146,000 today.

READ IT HERE

October 20, 2008

FT: Most Americans Do Better with McCain Tax Plan

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The Financial Times posted a piece comparing the McCain and Obama tax plans in a clearer and more concise way, called “McCain is no salesman on tax proposals”. Here are some highlights…

So much has gone wrong for John McCain that it is surprising he is not further behind in the polls. He has been a victim of circumstances and his own bad judgment. Some of his errors, however, are more perplexing than others. How is it, for example, that Mr McCain has been so thoroughly outmanoeuvred on tax policy?

Both candidates have offered complex tax proposals. Proliferating alternative baselines (with or without the extension of the Bush tax cuts, with or without a “patch” for the alternative minimum tax, and so forth) deepen the confusion. Unable to fathom the details, voters are left to weigh the competing slogans. Mr Obama promises to cut taxes for 95 per cent of working families. Mr McCain says the rich need a tax cut, too. Guess who wins that argument.

Here is a fact you might not have noticed. It certainly seems to have slipped by most Americans. The typical US household would get a bigger tax cut under Mr McCain’s proposals than under Mr Obama’s. I know a few politicians who could do something with that…

Mr McCain wants to abolish the tax-break for employer-provided healthcare and replace it with a refundable $5,000 credit. Mr Obama says that a family health plan might cost $12,000 a year – leaving families who buy their own policy $7,000 worse off. This is incorrect. So far as I know, Mr McCain has never taken the trouble to explain why.

Suppose a family currently has a $12,000 policy provided by an employer. Under the McCain proposal, instead of attracting relief as at present, this benefit would be taxed as ordinary employment income – but the extra tax paid would be more than offset by the new $5,000 credit. In the first analysis, nothing changes so far as employers are concerned: all the action is on the employee’s pay cheque. The policy delivers a net tax cut to middle-income households and is enough to make the McCain tax plan on average a better overall deal for them than the Obama plan…

As well as failing to drive this home, Mr McCain has only weakly resisted his opponent’s notion that “wealthy companies” can afford to pay more. Business taxes, in the end, are paid by people – in lower wages, higher prices and lower dividends in their 401k plans. The point is not just that US corporate taxes are high by international standards and that this discourages investment and employment but that the burden eventually falls on ordinary Americans. Perhaps Mr McCain’s recent emphasis on corporate greed makes it difficult for him to point this out.

When Mr McCain misrepresents Mr Obama, he cannot even do it plausibly. Mr Obama is indeed planning to cut taxes for 95 per cent of working families. Rather than saying, “No he isn’t”, Mr McCain could have said: “Look at what his changes do to marginal tax rates, at the bottom of the income scale (as benefits are phased out), as well as at the top.” Rather than saying, “He wants to raise your taxes,” he could have said, “His spending plans will force him to raise your taxes.”

Critical reading…READ IT HERE

October 20, 2008

GET OUT THE VOTE!

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We conservatives need to get out the vote now more than ever. Much like the Democrats encourage each other, with the motivation and intention to skew the election results away from the stance of the population, rather than any interest they claim to have in providing fairness and true representation of the country’s views. They know this with total clarity and have combined to that end with great sinister cooperation.

We need to spread the word far and wide that in every town, in every county, in every state (even the liberal ones) we need to make our voices heard and our votes counted. It’s easy and doesn’t take much time, and even if it did freedom isn’t free and being busy is no excuse.

First, vote yourself. No matter how much you’re certain of the positive or negative outcome regardless of your vote, you need to be counted or you can’t complain about the result. Second, spread the word to your conservative family, friends, and neighbors. Press them with reason that voting is the only way to bring about change since we’re not quite yet to a point where we need a coup.

It’s common knowledge that when we conservatives vote, we win. We’re always the majority in common sense, charity, and altruistic (largely Christian) effort to truly lift the less fortunate from the chains the Democrats have forged around their necks.

We’re the majority of the country’s population for heaven’s sake!

But unfortunately, we’re far behind in activism and “community organization” and representation in the media. This is likely due to the fact that we’re busy working on the American Dream, with little time for protesting outside corporations all day with signs and slogans (where do they get the time?) Our singlular focus on getting a piece of the pie must change, until the country changes and we can all go back to focusing on our pursuit of happiness and prosperity.

We must gain a greater awareness of the state of the nation. Our inaction is causing a shift in power as the Democrats register and hype those over which they preside as masters and keepers. Our inaction leads to the persistence of the programs and policies we so often decry. Our inaction will keep the country in the depth of recession and depression. Will it be another 50 years like the Democrats and closet-Socialists gave us? It’s up to us.

Democrat policies and the communities the left organizes are the source of our financial crisis. This kind of policy, enforced by the same guilty parties, will never lead to a better outcome. They need to be removed from office and their policies discontinued.

Vote and help those around you to vote. Plan a carpool for election day, make reminder calls, take the time to persuade and befriend those you know are conservative and remind them of the urgency of the emergency in this country. We are on the verge of an all Democrat government siege. That kind of crisis is actually far more dangerous, and in more widespread and moral ways, than the current mortgage crisis. There’s no doubt about it.

Please be sure to vote and open your mouth. The liberals around you will try to suppress you, as that is the only way they will win. But stand for your values. Again, please be sure to vote and open your mouth.