American Shareholders Association

The Hidden Good News on the Economy

Larry Kudlow points out that the economy is doing very well, thank you:

Following last week's solid jobs report, The New York Times got back to its Bush-bashing recession mantra with the front-page headline: "Slowing Job Growth Seen as Ominous Sign for Economy."  This chant has been going on for quite some time. Doom and gloom from the economic pessimists has been political sport for seven years, even though the Bush boom just celebrated its sixth anniversary. The current expansion is now in its 74th month -- 17 months longer than the average 57-month business cycle since World War II.

The Earmarks Endgame

House Republicans have opened up a "butcher shop" to identify pork in whatever spending bills the Democrats will be advancing between now and the end of the year.

Congressman Jeff Flake (R-AZ) has called House Appropriations Chairman David Obey (D-MN) on his bluff to strip all earmarks in order to get down to President Bush's requested level.  Flake rightly points out that this would be an ideal policy outcome.

News Roundup: Death Tax, Popular States, Euro Tanks, and PAYGO

Whoopi Goldberg has done more to support the "kill the death tax" movement than any other single person at this point.

News flash--high tax states are not popular ones to move into.

Senate Dems have waived PAYGO, thereby creating a precedent and exposing their hypocracy.

Good piece in Opinion Journal about free-market European think tanks.

ASA Executive Director Ryan Ellis Debates Jared Bernstein on CNBC Over Death Tax

Click here to see the video. 

New Dan Mitchell Video on Tax Competition

8.4 Million New Jobs Since Cap Gains Tax Cut

The Department of Commerce reported today that the unemployment rate remains at a full-employment level of 4.7%.  In even better news, another 94,000 jobs were added in November, making the total new jobs created since the 2003 capital gains and dividends tax cut 8.4 million.

In 2003, the capital gains tax rate was cut from 20% to 15%, and the dividends tax was cut from 38.6% to 15%.  Two years of sluggish job growth and even job losses were replaced with the steady job growth seen since then.

Senate Creates Precedent, Waives PAYGO for AMT Patch

By an overwhelming 88-5 margin, the Senate waived the white flag last night and refused to pass a permanent tax increase just to prevent an unintended tax from growing to 23 million families:

Senate Democratic leaders said that they had done all they could to preserve their much-ballyhooed pay-as-you-go -- or "paygo" -- rule, which says that any new entitlement spending or tax cuts would have to be offset by tax increases or spending cuts.

Once a centerpiece of Democratic claims to the mantle of fiscal discipline, paygo was ultimately steamrollered by the AMT, which could hit 23 million families this year if Congress does not act.

Fiscal Condition of the States Worsen

Gee, do you think it might have something to do with the fact that states spend their surplus money in good times, establish a new floor of spending, and then poormouth when things turn bad?  Disgusting.

Wall Street Journal Blasts Huckabee on FAIR Tax

Harsh treatment of Huck from the WSJ editorial page today:

There's a lot to be said for taxing consumption over income, and the fair tax would be worth consideration if we were writing a tax code from scratch. Realistically, we're not. The plan would require repealing the Sixteenth Amendment that allowed a federal income tax, and the chances of that happening are approximately zero. The political risk, given the nature of government, is that we'd end up with both an income tax and a national sales tax. Europe, here we come.

Congressional Dems Bungle Their Exit Strategy

True in many areas, but this week the focus is on energy tax increases and the AMT patch.

Not One, But Two (Count 'Em) Retrospectives on The Tax Reform Act of 1986

Here and here.  Take them with a grain of salt.  The capital gains tax rate increased from 20% to 28%, one of the causes of the 1987 stock market crash.  In general, though, lowering rates and broadening bases is a good thing.

Hey, Fred: Save Younger Workers, Not "The System"

Bill Shipman has a good op-ed criticizing Fred Thompson's Social Security plan:

Like so many before him, Mr. Thompson has fallen into the trap that the objective is to preserve and save Social Security rather than to provide retirement income cost effectively...Had the Thompson plan taken a different approach by simply allowing all workers the choice to leave Social Security for a market-based structure, but requiring no one to do so, it would have achieved greater retirement benefits at a much lower cost, and with less complexity.

Right Rx, Wrong Cure for Health Care

Robert Samuelson of the WaPo advocates higher taxes and socialized medicine today.  Supposedly, it's to acquaint more Americans with the actual cost of health care.

There's already a way to do that--it's called health savings accounts.

Two Words for Policymakers on Mortgages: Moral Hazard

“It’s akin to negotiating with someone who has put a gun on the table in front of you,” Derek Hunter, federal affairs manager for Americans for Tax Reform, said, describing the administration’s effort to oversee a coordinated response from the private lending sector to assist distressed homeowners.

Click here for more.

Whoppi Goldberg Lashes Out at the Death Tax

Dont' believe me?  Click here.  Her attack on the death tax is brilliant.

Tax Rate Cuts, Not Inflationary Monetary Policy, Key to Saving the Economy

Cesar Conda has a good op-ed in NRO today in which he makes the sound argument that futher interest rate cuts by the Federal Reserve would increase the risk of inflation.  A better policy would be aggressive, pro-growth tax cutting:

Instead of pushing the Fed to unnecessarily cut interest rates, Wall Street investors, the media, and others should put the onus on Congress to boost the U.S. economy by cutting tax rates. Making the Bush tax cuts permanent, especially the capital-gains and dividend tax reductions which are set to expire by 2010, would lift the cloud of economic uncertainty. Cutting the U.S. corporate tax rate — currently the second highest among industrialized nations — would not only improve the cash flow and profitability of U.S. firms in the near-term, but greatly enhance their ability to compete in the global marketplace over the long-term. At the very least, Congress should refrain from raising taxes. Enacting personal accounts for Social Security and reforming runaway entitlement spending would reduce government’s growing share of the private economy. All of these steps would make America a magnet for investment and strengthen the value of the U.S. dollar.

News Flash: High Corporate Rates Are Bad

The Treasury and the NBER will be coming out with a study soon showing that high marginal tax rates on corporate income retard economic growth.

The U.S. current has the second-highest corporate income tax rate in the developed world at nearly 40%.  The developed-world average is 28%, and the European average is 25%.  Clearly, a massive round of corporate rate cutting would seem to be in order.

Worried About Your Pension? Federal Employees Aren't

Click here to read the gory details.  Here's your nugget:

"Think of a federal annuity as a giant stack of guaranteed Treasury bills" that are never exhausted, said Bethesda-based financial planner Dennis Gurtz. "The annuity is indexed to inflation. ... In bad times [like a recession], federal workers may be the richest people on the block." If there is a real depression, "[the feds] are gold."

The Moral Hazard of Lender Bailouts

Good op-ed on the mortgage lender bailout in today's WSJ.  An excerpt gives you the gist:

A taxpayer bailout of distressed homeowners would be expensive, unfair to the vast majority of homeowners and renters who have made prudent financial decisions, and set a troubling precedent that would invite reckless behavior in the future. What's more, a bailout will not stop the inevitable correction in home prices, and is unlikely to prevent the associated economic repercussions.

Dem Congress Bad for Business

The ever-helpful Republican Study Committee (a group of House conservatives) has come up with a study of all the anti-business legislation passed by the Congress this year.