12:01 AM, Oct 3, 2015 • By IRWIN M. STELZER
The only word to describe Friday’s job report is ugly. The private sector created only 118,000 new jobs in September, early estimates of job creation in July and August were lowered, average hourly earnings dropped a tiny bit, the labor force participation rate dropped to its lowest level since October 1977. Nothing here to justify the Federal Reserve Board’s policy gurus in raising interest rates, and much to make them happy that they withstood pressure to raise rates in the past. And a great deal of support for revising the nation’s tax code to get the economy moving ahead at a faster rate. Which all candidates for both parties’ presidential nomination propose to do. With reason.
The current tax code is a nightmare. Spread across 74,608 pages (up from 8,200 after WWII), the code forces Americans to waste 6.6 billion nerve-wracking hours and spend about $200 million filling out the many forms. One estimate has compliance costs at 20 percent of collections, which might have set Adam Smith spinning in his grave. (In Wealth of Nations, he wrote, “A tax may … take out … of the pockets of the people a great deal… [because] levying of it may require a great number of officers, whose salaries may eat up the greater part of the produce of the tax.”) The rates are the highest in the industrial world; the treatment of foreign earnings so draconian that American companies are using a technique called “inversion” to buy foreign companies and transfer headquarters and jobs to the foreigners’ countries; and the form-filling burden so complicated that the Internal Revenue Service could respond to only 37 percent of befuddled tax-payers’ pleas for assistance, leaving 8.8 million calls unanswered. (Cf. Smith, “The time of payment, the manner of payment, the quantity to be paid ought to be clear and plain to the contributor…”). The principal beneficiaries of the current system are the lawyers and accountants who devise legal means of enabling their rich clients to avoid the full swish of the IRS axe, and lobbyists hired by companies and individuals to persuade legislators to lace the tax code with obscure clauses that reduce the effect of the government’s rapacity on their clients.
Candidates competing for their parties’ presidential nomination have a solution: put me in charge, tax reform and gifts for all, or almost all, will follow. Democratic Santas are offering a variety of goodies – college tuition, more spending on infrastructure, expanded entitlements, single-payer NHS-style health care (this goodie is also on Donald Trump’s sleigh awaiting delivery). The bills will be sent to voters in the form of higher taxes, mostly on the rich. Republican Santas are offering gifts of an entirely different sort – enabling voters to keep more of their own money by lowering a variety of tax rates. Like their Democratic counterparts, they say these gifts will come at no cost, because the growth they stimulate will generate enough new tax revenue to be self-financing. Perhaps. But if they are being overly optimistic, revenues will be insufficient to prevent the federal deficit from rising. And that means the beneficiaries of the lower tax rates will be passing the cost on to their children, who will face either higher taxes to cover interest costs on the debt, or a reduction in the purchasing power of their pay checks if future governments trigger inflation as a way of reducing the real burden of their inherited debt. In short, raise taxes and redistribute (Democrats), lower taxes (Republicans), and growth will accelerate.
Bernie Sanders, the Socialist vying for the nomination of the Democratic Party, would raise taxes on the rich and on employers to fund some $18 trillion in new spending over the next decade, a one-third increase over the current level of government spending. Hillary Clinton proposes to raise the capital gains tax rate on high earners who hold their stocks for less than six years, and spend it on a variety of new entitlement programs. That, she claims, would end “the tyranny of today’s earnings reports” and induce business to make the long-term investments needed to support rising wages.
On the Republican side, most candidates would exempt more Americans from paying income taxes, indicating that they failed to consult their undoubtedly dog-eared copies of Wealth of Nations, in which Smith advised, “The subjects of every state ought to contribute towards the support of the government…”. Typically wise advice. Already almost half of Americans pay no income taxes, instead being subject to the horribly regressive payroll tax. With the link between income tax paid and benefits received broken, voters have an incentive to demand more and more costly benefits – to be paid for by someone else.
A winning tax reform.
Sep 28, 2015, Vol. 21, No. 03 • By FRED BARNES
Some Republican presidential candidate was sure to come along with a credible tax reform plan to erase tax loopholes, preferences, and special breaks, broaden the tax base, and lower rates. Now Jeb Bush has done it. This marks a departure point in the GOP race.
5:01 PM, Sep 9, 2015 • By MICHAEL WARREN
Former Florida governor Jeb Bush laid out details of his economic plan in North Carolina Wednesday, focusing primarily on how he would reform the tax code as president. The proposal, Bush said, would help achieve his stated goal of four-percent annual economic growth.
A surprising divide on a core issue.
May 18, 2015, Vol. 20, No. 34 • By MICHAEL WARREN
Wisconsin Republican Paul Ryan has an unusual decoration on the wall of his Capitol Hill office: a framed Laffer curve. This totem of supply-siders everywhere is drawn on a napkin and signed by the economist Art Laffer himself. “To my friend, Paul Ryan,” reads the note.
Here's why.11:38 AM, May 7, 2015 • By IRWIN M. STELZER
The ice is finally melting. Not the Arctic ice, although that might be melting too. I mean the frozen position critics of the global warming hysterics have been taking. They disagree with Obama’s contention that the science of climate change is settled, and prefer reading actual temperatures recorded on thermometers to print-outs of assumption-ridden models.
1:33 PM, May 1, 2015 • By MICHAEL WARREN
Ohio governor John Kasich, who may run for the Republican nomination for president, said he is in talks with publisher and conservative activist Steve Forbes to develop a flat tax reform proposal.
"I’m in conversation now with Steve Forbes on the flat tax," Kasich said Friday afternoon at a lunch sponsored by the Christian Science Monitor.
It’s still a good idea. May 4, 2015, Vol. 20, No. 32 • By STEPHEN MOORE
Almost exactly 20 years ago, a gawky conservative renegade magazine publisher named Steve Forbes threw his hat in the ring for the 1996 GOP presidential nomination. Forbes’s run was first seen as a joke. But he wound up rocking the Republican establishment by injecting fresh and bold reform ideas into a party that had become crusty and tired.
4:04 PM, Apr 15, 2015 • By MICHAEL WARREN
While Hillary Clinton was meeting with voters in Iowa on her second full day as a presidential candidate, Marco Rubio spent part of his discussing a tax policy white paper at a Washington think tank. The newly declared candidate joined with Utah Republican Mike Lee at the Heritage Foundation to talk about their proposal to reform the tax code, which has already become a point of contention in Rubio's nascent presidential campaign.
7:31 AM, Mar 4, 2015 • By MICHAEL WARREN
Republican senators Marco Rubio of Florida and Mike Lee of Utah have returned to the pages of the Wall Street Journal to tout their latest tax reform proposal. The Republicans call their plan both "pro-growth" and "pro-family," and say it addresses inequities in the tax code for businesses and middle-class families.
Here's an excerpt:
The case for GOP boldness. Sep 29, 2014, Vol. 20, No. 03 • By FRED BARNES
Big ideas sometimes play a role in political campaigns, but not in this year’s midterm elections. Republican candidates concentrate on linking their opponents to President Obama and his policies. That’s it. Democrats are understandably wary of defending Obama. They go after Republicans on minor or trumped-up issues, often in unscrupulous TV ads.
Why do lobbyists work so hard to counter a tax bill that has no chance of passing? Mar 17, 2014, Vol. 19, No. 26 • By IKE BRANNON
When House Ways and Means Committee chairman Dave Camp, a Michigan Republican, introduced a major tax reform proposal at the end of February, the entire tax policy world in Washington was set into motion. I have friends who lobby on tax issues who claim they did not sleep the two days after the release, working through consecutive nights to read the bill, confer with colleagues, and conceive of a plan to counter what’s in the bill that impacts their clients.
Hosted by Michael Graham.4:11 PM, Oct 15, 2013 • By TWS PODCAST
THE WEEKLY STANDARD podcast with staff writer John McCormack on the latest in the government shutdown and debt ceiling talks:
Hosted by Michael Graham.4:05 PM, Oct 11, 2013 • By TWS PODCAST
THE WEEKLY STANDARD podcast with staff writer Jay Cost on the government shutdown and whether the GOP has a strategy to end it with a policy victory.
Sep 30, 2013, Vol. 19, No. 04 • By YUVAL LEVIN
Republicans these days are eager to replay the Reagan revolution. It is not hard to see why: In the 1980s, the GOP was the party of ideas, and the vision that Ronald Reagan and his supporters brought to Washington proved immensely popular with voters and profoundly improved American life. But in their effort to repeat Reagan’s particular policies, rather than his more impressive feat of developing policies that applied conservative principles to the problems of his day, today’s Republicans risk becoming detached from the country’s real concerns.