There are many reasons to be against the Obama tax hikes, especially as the economy struggles to recover. However, even putting aside economic growth considerations, it is simply not true that only the “rich” will be affected by the tax increase. For example, small businesses (and their workers), as well as all holders of capital gains and dividend income—many of whom are seniors—would be hit with a tax increase. Even the poorest seniors would face higher taxes: about 1 in 5 seniors in each of the first 3 income quintiles …
Raising taxes on successful businesses is one thing we cannot afford to do. Large, successful businesses that create jobs would be hit the hardest, but small businesses would also be hurt by such a tax increase. Although economists disagree on many aspects of economic growth and recession, there is near-unanimity on at least one issue: raising taxes during a recession is a bad idea. It seems clear then, that a jobs-killing tax increase, such as the one planned by President Obama, is a bad idea. Of course, Obama has argued …
Despite their key role in creating the housing crisis, Fannie Mae and Freddie Mac are not being reformed, and will continue to cost the American taxpayer huge sums of money for the foreseeable future. There will be a housing summit on Tuesday, but its already clear that the federal government will remain in the mortgage business, despite the scandals that have emerged. Bailouts of the mortgage giants have already cost the taxpayer $111 billion, and the Congressional Budget Office projects they will cost another $290 billion this year alone. (This …
In the battle over the extension of the 2001/2003 tax cuts, a lot of myths about the tax cuts are being perpetuated. One of the common myths is that the Bush tax cuts disproportionately favored the wealthy, shifted the burden of taxes from the rich to the middle class, and made our tax system less progressive than most wealthy nations. First, although there was a slight shift of burden to the middle class immediately after the 2001 tax cuts were passed, as the higher earners (and businesses) grew their savings, …
The White House Council of Economic Advisers (CEA) has released a projection of jobs created by the economic stimulus bill. However, the method they used to get these numbers falls short of basic scientific standards. The CEA modeled a potential outcome for the economy without the stimulus, basing it on historical data. They then compared this computer simulation with the actual data about what occurred with the stimulus – and have declared that the stimulus worked. This method would be met with a failing grade in any decent university economics …
A year ago, President Obama warned the American people that the financial crisis was dire and required a whole new approach to government spending. Obama argued that the government must help America spend its way out of the recession, and his economists, using Keynesian multipliers, argued the “stimulus” would keep unemployment below 8.2 percent (PDF). Conservatives were skeptical, and pointed out that many of the government jobs would take a year or more to materialize, but Obama replied that we must be patient and keep spending. Conservatives pointed out that …
It is a well known economic policy rule that if you want less of something you tax it, and if you want more of something you subsidize it. Policymakers frequently follow this rule to influence behavior. This is why there are “sin taxes” on things like alcohol and cigarettes, and also why “cap and trade” taxes carbon. This is why there are subsidies for education and for “green” technologies. If taxes and subsidies make any sense at all, they make sense when used to tax “bad” things and subsidize “good” …
Obama promised that the stimulus would “create or save” 3.5 million jobs, and significantly tempter the rising unemployment rate. Now that it is clear that his plan has failed to save or create jobs, and unemployment is still rising, Democrats are reaching out to small business. “Small business is the engine of job creation and capital creation in our country,” Nancy Pelosi said yesterday. Their plan? Use more taxpayer money to increase Federal loans to small businesses—those that qualify according to government guidelines, of course. But wait—right now, the majority …
ABC and NBC have so far refused to run a 33 second advertisement by the League of American Voters that questions the Obama health care plan. ABC has argued that the ad is partisan – yet ABC did not think that giving a megaphone to the Obama administration to make the Democrat’s case on health care was partisan. Fox News reports: [Dick] Morris, a onetime advisor to former President Bill Clinton, said he was particularly troubled by ABC’s decision not to air the spot. “It’s the ultimate act of chutzpah …
As the debate over the “public option” for health care heats up, a new attempt to ridicule those with concerns over government provision of services has taken hold: the group’s sarcastic Facebook tagline is “1 Million Strong Against our SOCIALIST Fire Departments,” and the argument is that public health care makes no less sense than public fire departments. They are wrong on several fronts. First of all, as should be obvious to even the casual observer, the constitutional and economic issues are much more significant with an industry that constitutes …
