The main goal for any tax reform that merits being called a reform is to boost economic growth. The way to do that, most economists whose last name isn’t Krugman aver, is to reduce marginal tax rates on businesses both large and small and make up the lost revenue by eliminating various tax deductions, exclusions, and credits. Spending cuts, too, if possible.
But is any part of it possible?
Congress late last year made permanent a number of "temporary" tax measures such as the Research and Experimentation Tax Credit and the expensing of capital investment for small businesses. It also extended some provisions set to expire, including tax breaks for alternative energy production.Read more
Earlier today in Saraosta, Florida, Marco Rubio gave a speech to supporters outlining his views on economic policy, and contrasting himself with Democratic frontrunner Hillary Clinton.
Rubio opened by claiming that the media obsesses over the wrong polls: political polls. Rubio, who is rising in some polls but still trailing Donald Trump in nationwide polls, says the real polls to look are of citizens' views on the economy.
It's a recent poll that asked, "Is the American Dream alive or dead?" Almost half of millennials, meaning young Americans, replied that the American Dream was dead. Other polls have shown even higher numbers, across all generations.Read more
Hillary Clinton says she comes from “the Clinton school of economics." It's her way of identifying with her husband, Bill Clinton, and suggesting that if elected president she would duplicate the economic success of his presidency.
Given what she's proposed in her campaign for the White House, the chances of this happening are practically nonexistent. Her policies are closer to those of socialist senator Bernie Sanders, her rival for the Democratic presidential nomination, than to Bill Clinton's.
She is against nearly everything her husband either signed into law or benefited from in the 1990s. He raised income tax rates in his first year in office, the top rate increasing from 31 percent to 39.6 percent.Read more
At minimum it is unseemly, at maximum an example of chutzpah as practiced in Silicon Valley. Having shot themselves in the foot, some prominent tech billionaires want the president to bypass Congress and minister to their wound. They have poured cash into his campaign coffers, and now is payback time. They want him to increase the number of H-1B visas that allow them to hire high-skilled foreign tech workers. Which he has promised to do, never mind that Microsoft has just laid off thousands of workers.Read more
The New York Times has a short article today that seems primed to cause maximum alarm, headlined, "Jeb Bush's Tax Plan Would Cause $8.1 Trillion Budget Hole, Analysis Finds."
I've read the article, and while it deals with the potential problems and fallout from Jeb Bush creating such a big revenue shortage, its says virtually nothing about how this analysis from the Tax Policy Center was done:
This new analysis tries to shed some more light on those questions with the help of a complex model. The Tax Policy Center found bigger revenue losses ($6.8 trillion) than a conservative Tax Foundation analysis and smaller than one by the more liberal Citizens for Tax Justice. That $6.Read more
In an email released by the State Department, John Podesta blasts David Axelrod for totally caving "in to right wing economics." Podesta, who is currently chairman of the 2016 Hillary Clinton presidential campaign, was speaking ill of Obama's top political adviser in private emails with Clinton aides.
"At least David has his principles in tact like he won't be for small things like school uniforms--only big things like totally caving in to right wing economics," Podesta wrote. "Unbelievable."
The message was sent to longtime adviser Neera Tanden, chief of staff Cheryl Mills, and Doug Band, President Bill Clinton's longtime body man.Read more
In 1970, the year after Jack Kemp had retired as quarterback of the Buffalo Bills, he was elected to the House from a district covering the Buffalo suburbs. He was 35. His chief concern was the suffering of his Rust Belt constituents, beset by plant closings and high unemployment. In 1973, he proposed a business-friendly tax cut, followed by another titled the Jobs Creation Act. Neither passed. Kemp, a phys. ed. major at Occidental College, had taught himself economics. He had read Ludwig von Mises, Friedrich Hayek, and Milton Friedman, the masters of free-market economics.Read more
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.Read more
Two weekends ago, the Federal Reserve Bank of Kansas City held its annual monetary conference in Jackson Hole, Wyoming. The left flew in hundreds of protesters donning green T-shirts that demanded “Higher Wages for America” and chanting, “We’re Fed Up.” The crowd was an assortment of college kids on their summer break, disgruntled middle-aged teachers, senior citizens, and blue-collar union members. Think Occupy Wall Street.Read more
There are times when excessive attention to monthly data reporting what’s up, what’s down, can be allowed to obscure underlying structural changes in an economy. With the game of what-will-Yellen-do-next in full flow, this is one of those times. No, the proverbial tectonic plates are not shifting, whatever that phrase might mean when applied to an economy other than one in the throes of an irreversible Margaret Thatcher-style revolution.Read more
Barack Obama says part of the problem with continued poverty in America is misplaced middle-class resentment of the poor, fueled by false media narratives. The president made his remarks at a summit on poverty Tuesday afternoon at Georgetown University in Washington.Read more
Prices matter. They are the economists’ canary in the coal mine, an indicator of what is to come. Not necessarily as grim an indicator as when we have here a dead canary, but a pointer that cannot be ignored. When oil prices plummeted, analysts paid attention, hunting for causes and effects. Wages are the price of labor.Read more
Last week’s surprising report that the value of all the goods and services produced in America did not grow in the first quarter, which will be subject to two revisions as firmer data come in, tells us one of two things.Read more
The Democrats have finally decided on the fair, just minimum wage -- $12 per hour. But they fail to make one important point in favor of their demand. Recall the tale of the diligent robbers who spend a weekend drilling into the vault of a posh jeweler, making off with millions in bling for their labor. Commenters, this Gleaner included, failed to mention that the creation of half-dozen new millionaires must raise average incomes in Britain, where the theft occurred.Read more
Clinton Makes Trouble For Cuomo
Until Hillary Clinton decided to destroy 33,000 allegedly personal e-mails, all was quiet on the document-retention front in her selected home State of New York. Governor Andrew Cuomo was quite happy with the secrecy provided by his own refusal to send written memos or e-mails, and the practice followed by his staff and state agencies (at his insistence) of destroying e-mails older than 90 days. No footprints. Which is the way the famously secretive Cuomo likes it.Read more
President Obama can’t run again, as he noted in the State of the Union last month, but he sought to use his address to set the tone for the 2016 campaign. His repeated references to “middle-class economics” were tactful code, speaking in front of a Republican-controlled Congress, for that perennial Democratic favorite, the inequality debate.Read more
Congressional Republicans can reasonably be accused of prioritizing issues about which middle-class voters care little. The president can reasonably be said to have his priorities perfectly in order, with counterproductive proposals that won’t achieve them.Read more
We know that supply-side economics emphasizes serious cuts in tax rates and Keynesianism relies on massive amounts of government spending. But how in the world does “middle class economics” work? After President Obama cited it repeatedly in State of the Union speech, I waited and waited for him to explain how it works. He never did.Read more
The White House knows President Obama's plan, which he'll lay out this week in the State of the Union Address, is unrealistic. Dan Pfeiffer, a top White House adviser, said so earlier today on CBS:Read more
Two weeks ago the Commerce Department released its final estimate of Gross Domestic Product for the second quarter. That marked five years since the recession ended—a period of massive experimentation with expansionary fiscal and monetary policy. While those policies were doubtless well intended, all they did was what standard economic theory says they would do—move future economic output to the present. They did not by any means increase long-term economic growth.Read more
The New York Times columnist Paul Krugman has written that Capital in the Twenty-First Century, Thomas Piketty’s new book on inequality and wealth, “will change both the way we think about society and the way we do economics.” Clive Crook describes the raptures with which intellectuals have greeted the book as almost “erotic.” President Obama’s advisers have been buttonholed about Piketty at speaking appearances from here to Dublin. Capital has reached number one on Amazon.com.Read more
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