I wish Warren Buffett would stop writing op-eds and just write a check to Treasury to assuage his guilty conscience.
The policies that comprise the fiscal cliff have been around for nearly a year and the phrase itself was coined by Fed Chairman Ben Bernanke earlier this year, but in the several months since Chairman Bernanke warned of the effects of the fiscal cliff, really nothing has changed. Headlines indicate that in addition to increasing [...]
Four reasons why we can’t bring back the 91% tax rate.
Paul Krugman wants to go back to the future: America in the 1950s made the rich pay their fair share; it gave workers the power to bargain for decent wages and benefits; yet contrary to right-wing propaganda then and now, it prospered. And we can do that again. Krugman is too smart a guy to [...]
Why is the ACLU suing Panetta, Petraeus over Awlaki killing — but not President Obama?
This afternoon, the ACLU and the left-wing Center for Constitutional Rights (CCR) are back in court with a wrongful death suit against the U.S. officials involved in the targeted killing of the American-born al Qaeda leader Anwar al-Awlaki, as well as Awlaki’s son and American-born al-Qaeda terrorist trainer and propagandist Samir Khan. The New York [...]
A Few Ways Obama Has Violated the Constitution – Before You Blindly Vote.
Article. II., Section. 3. of The Constitution of the United States gives no discretion to the President when it comes to our nation’s laws. The Constitution clearly states, “he shall take Care that the Laws be faithfully executed,” and no leeway is provided. Without the approval of Congress, as required by the Constitution, Obama ordered [...]
Obama and the Democrats Intend to Disenfranchise Military Voters.
President Barack Obama, along with many Democrats, likes to say that, while they may disagree with the GOP on many issues related to national security, they absolutely share their admiration and dedication to members of our armed forces. Obama, in particular, enjoys being seen visiting troops and having photos taken with members of our military. [...]
I wish Warren Buffett would stop writing op-eds and just write a check to Treasury to assuage his guilty conscience.
The policies that comprise the fiscal cliff have been around for nearly a year and the phrase itself was coined by Fed Chairman Ben Bernanke earlier this year, but in the several months since Chairman Bernanke warned of the effects of the fiscal cliff, really nothing has changed.
Headlines indicate that in addition to increasing taxes on the wealthy, fixes to Medicare, Medicaid and Social Security are now in the discussion of the fiscal cliff. The WSJ reports that “the fiscal cliff has revived an old idea that long seemed unfeasible: gradually raising the Medicare eligibility age to 67 from 65.” And then there’s Social Security. The NYT reports “while a potential change in calculating Social Security increases was part of the talks with Speaker John A. Boehner last year, the White House press secretary, Jay Carney, made clear on Monday that the administration was not considering changes to the retirement program as part of the deficit talks.”
As negotiations continue to evolve it is absolutely essential that President Obama and leaders in Congress remember that the fiscal cliff is 7 legislative components — nothing more. Quality tax reform or entitlement reform requires more time and attention than a lame duck period can provide. What Washington needs to do is bring the economy safely into 2013 (the sooner the better) where they can take seriously the underlying drivers of our debt.
On our radar: Bernanke speaking at 8:30 AM; Durable Goods Orders for October from Census at 8:30 AM. Bloomberg prediction here; 9:00AM: S&P/Case-Shiller Home Price Indices; 10:00AM: Conference Board Consumer Confidence, FHFA House Price Index, Richmond Fed Manufacturing Survey, State Street Investor Confidence Index.
Doug’s Daily Economic Outlook
Warren Buffett is at it again. Writing in the New York Times yesterday he argued for an immediate, new minimum tax. For those with taxable income of between $1 million and $10 million, there would be a minimum 30 percent rate, and for taxable income above $10 million there would be a 35 percent rate. I wish Mr. Buffett would stop writing op-eds and just write a check to Treasury to assuage his guilty conscience:
1. The new minimum tax would be layered on top of the broken income tax, and the broken Alternative Minimum Tax. At a time when there is a consensus for tax reforms, this is a decisive step in the wrong direction.
2. The new minimum tax would not do one single thing to address the looming threat of the fiscal cliff. Indeed, it would be a step in the wrong direction again.
3. The new minimum tax would make a trivial contribution to solving the nation’s debt and deficit woes, something that must be done by mid-2013 to keep the faith of markets.
From a political perspective, Mr. Buffett’s advocacy continues the general drumbeat for higher taxes that the Administration substitutes for a specific plan of entitlement reforms that would “balance” its approach. However, at a substantive level, it is a step away from sound policy that his introspective decision that taxes don’t matter is permitted to substitute for the volumes of research showing the impact of tax policy on saving, investment, portfolio choice, human capital accumulation, labor force participation, decisions to rent versus own, decisions on business location, and even the timing of births (never give birth on January 1 if you can get another year’s exemption by doing so on December 31st). Indeed, Mr. Buffett seems blissfully unaware that by basing his tax on “taxable income” he has dodged addressing the hardest question: what should be taxed?
It would be good if history showed that December 2012 was the month the fiscal cliff was dodged. And that 2013 was the year of fundamental tax reform. In those histories, there would be no Buffett tax.
What We’re Reading
On ‘fiscal cliff,’ both sides lay groundwork for debate’s next phase — Boehner…was laying plans Monday for top Republicans to meet with Erskine Bowles, a chief of staff in the Bill Clinton administration who also has close ties to Obama’s White House. Ahead of the Wednesday meeting, GOP aides noted that Bowles offered a debt-reduction plan last fall in line with Republican principles…In addition to pursuing private talks, the White House began making a public push on Monday. Obama is strongly considering holding events in Washington or elsewhere later this week to argue for extending current tax rates for 98 percent of Americans and letting rates rise for the wealthy, according to administration officials. (WaPo)
Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny — A tax break that has long been untouchable could soon be in for some serious scrutiny. Many home buyers deduct their mortgage interest when assessing their tax bill, a perk that has helped bolster the income of millions of families – and the broader housing market. But as President Obama and Congress try to hash out a deal to reduct the budget deficit, the mortgage interest deduction will likely be part of the discussion. (NYT)
Obama to meet executives, go to Pennsylvania for fiscal push — On Tuesday, a White House official said, the president will meet with a group of small-business owners. On Wednesday he will host an event with “middle class Americans who would be impacted if Congress fails to act to extend the middle class tax cuts,” the official said. He will also hold a meeting with business leaders, something he has done previously. On Friday, he will visit a manufacturing facility of The Rodon Group, a small business that is a manufacturer for K’NEX Brands, a toy company with products including Tinkertoy and Angry Bird Building Sets. (Reuters)
Dividends Come Early to Avoid Fiscal Cliff — More U.S. companies are racing to get ahead of the looming fiscal cliff. Faced with a possible tax increase on dividends next year, boards are approving bigger payouts and cutting checks faster to avoid 2013 rates. (WSJ)
OECD Slashes Global Growth Forecasts for 2013 — The OECD slashed its global growth forecasts on Tuesday, warning that the debt crisis in the recession-hit euro zone is the greatest threat to the world economy. In light of the dire economic outlook, the Organisation for Economic Cooperation and Development urged central banks to prepare for more exceptional monetary easing if politicians fail to come up with credible answers to the debt crisis. (Reuters)
Medicaid expansion poses ‘modest’ state costs — President Barack Obama’s $1 trillion plan to expand Medicaid would raise state costs by only 3 percent and extend health coverage to more than 21 million low-income people as part of the new healthcare reform law, a study said on Monday. The report released by the nonpartisan Kaiser Family Foundation said states would spend an extra $76 billion over the new decade to implement the Medicaid expansion, or 2.9 percent more than they would without the reform law. (Reuters)
New SEC head faces fights on several fronts, legal straitjacket — Mary Schapiro’s successor as head of the U.S. Securities and Exchange Commission is going to have to hit the ground running. While an ongoing battle over regulating the $2.5 trillion money market fund industry, some 63 unfinished rule makings required by the 2012 Dodd-Frank Wall Street reform law and continuing fears about market stability and high frequency trading, the new top securities regulator will have a lengthy list of critical issues to address on day one. (Reuters)
Paul Krugman wants to go back to the future:
America in the 1950s made the rich pay their fair share; it gave workers the power to bargain for decent wages and benefits; yet contrary to right-wing propaganda then and now, it prospered. And we can do that again.
Krugman is too smart a guy to really believe this. Perhaps by making the case for a 91% top tax rate, President Obama’s tax hikes won’t look so extreme. But whatever the politics, the economics of Kurgman’s plan are terrible
1. The 1950s and 1960s were affected by a host of unique factors, not the least of which was that they came right after a devastating global war that left America’s competitors in ruins. A National Bureau of Economic Research study described the situation this way: “At the end of World War II, the United States was the dominant industrial producer in the world. … This was obviously a transitory situation.”
2. As former Bain Capital executive Edward Conard notes in his new book, Unintended Consequences, the size of the U.S. labor force was constrained during those decades by both the 1930s baby bust and casualties from the war. So a surge in jobs and a restricted supply of labor produced fat wage growth. Hoping for a return to that era is futile, Conard concludes:
The United States was prosperous for a unique set of reasons that are impossible to duplicate today, including a decade-long depression, the destruction of the rest of the world’s infrastructure, a failure of potential foreign competitors to educate their people, and a highly restricted supply of labor. For the sake of mankind, let’s hope those conditions aren’t repeated. It seems to me anyone who makes comparisons between today’s economy and that of the 1950s and 1960s without fully disclosing their differences is deceiving their readers.
3. Even most liberal economists think the high-end for US marginal tax rates is 70% or so. And a new study from AEI shows even that estimate is almost certainly too high since it a) assumes the rich won’t respond to higher rates by changing work habits or engaging in tax avoidance, b) it assumes zero long-term impact on behavior by sharply higher rates, c) it assumes Americans prefer want government to take as much income as possibly from the rich and redistribute it to the non-rich.
4.Look at the natural experiment that just happened in Great Britain. Its Independent Fiscal Oversight Commission—which reviews all of the budgetary assumptions—just ruled that cutting the top rate of tax from 50% to 45% was revenue neutral, implying the revenue maximizing rate is in that range.
Sorry, Mr. Krugman, your dream of confiscatory tax rates will have to remain just that, a left-of-center fantasy.
This afternoon, the ACLU and the left-wing Center for Constitutional Rights (CCR) are back in court with a wrongful death suit against the U.S. officials involved in the targeted killing of the American-born al Qaeda leader Anwar al-Awlaki, as well as Awlaki’s son and American-born al-Qaeda terrorist trainer and propagandist Samir Khan. The New York Times reports:
Relatives of three American citizens killed in drone strikes in Yemen last year filed a wrongful-death lawsuit against four senior national security officials on Wednesday. The suit, in the Federal District Court here, opened a new chapter in the legal wrangling over the Obama administration’s use of drones in pursuit of terrorism suspects away from traditional “hot” battlefields like Afghanistan….
Accused in the suit of authorizing and directing the strikes are Leon E. Panetta, the secretary of defense; David H. Petraeus, the director of the Central Intelligence Agency; and two senior commanders of the military’s Special Operations forces, Adm. William H. McRaven of the Navy and Lt. Gen. Joseph L. Votel of the Army.
“The killings violated fundamental rights afforded to all U.S. citizens, including the right not to be deprived of life without due process of law,” the complaint says.
In its announcement of the suit, CCR declared:
Our suit seeks accountability for those killed. It seeks some modicum of justice for Abdulrahman, the boy whose family could not give a proper burial because he was blown to pieces by a U.S. missile, and who the United States never alleged committed any harm. Our suit seeks to ensure that there are no more Abdulrahmans in the future, that no more individuals are needlessly killed in dangerously expanding covert U.S. wars that must end.
Well, if it’s accountability they want, then why isn’t President Obama a defendant in the suit? After all, a recent New York Times story which reported leaked classified details of the drone program revealed that Obama personally selects “every new name on an expanding ‘kill list’” of terrorists to be vaporized — including that of Awlaki. White House officials bragged to the Times how Obama “approves lethal action without handwringing,” and how he had told aides that the decision to kill Awlaki with a drone was an “easy one.”
So why, pray tell, are the ACLU and CCR suing Panetta, Petraeus, McRaven, and Votel — but not the president of the United States? After all, Obama boasted that he personally gave the kill order.
1. On September 11th, 2012, the American consulate in Benghazi, Libya was attacked and 4 Americans died, including the U.S. Ambassador to Libya, Chris Stevens.
2. For two weeks afterward, we were told by members of the white house administration, including the President, that it resulted from a spontaneous protest outside the consulate in reaction to a video posted on YouTube that cast Mohammed in an unfavorable light.
3. Security video revealed that there was no protest: it was a pre-planned and coordinated military attack.
4. Then we found out that people inside the consulate were sending emails to the white house asking for protection.
5. Then we found out that live footage was transmitted by a surveillance drone overhead and that people in the administration were watching events unfold in real time.
Article. II., Section. 3. of The Constitution of the United States gives no discretion to the President when it comes to our nation’s laws. The Constitution clearly states, “he shall take Care that the Laws be faithfully executed,” and no leeway is provided.
Without the approval of Congress, as required by the Constitution, Obama ordered the U.S. military to attack Libya.
When the Democrat-led Congress refused to pass the Dream Act, the Obama White House and DHS decided to implement a policy of granting illegal aliens stays of refusal, which is essentially amnesty by fiat. The Obama policy even gives local immigration officials the authority to dismiss deportation cases against illegal alien criminals convicted of violent crimes.
Dodd-Frank- Intended to remedy weaknesses in the U.S. financial system ensuring transparency and accountability the Dodd-Frank financial “reform” empowered unlimited, unreviewable and often secret bureaucratic discretion. The administrative bodies the legislation created face no constraints on the exercise of arbitrary authority. For example, the Treasury Department now has broad and essentially unchecked power to seize banks and other financial entities that it determines are unsound but “too big to fail.” The new Consumer Financial Protection Bureau and Financial Stability Oversight Council, meanwhile, craft, execute and interpret their own law. Due process and separation of powers issues abound.
Health care waivers – The Department of Health and Human Services has granted nearly 2,000 waivers to employers seeking relief from Obamacare’s onerous regulations. Nearly 20 percent of these waivers went to gourmet restaurants and other businesses in Nancy Pelosi’s San Francisco district. Nevada, home to Senate Majority Leader Harry Reid, got a blanket waiver, while Republican-controlled states like Indiana and Louisiana were denied. Even beyond the unseemly political favoritism, such arbitrary dispensations violate a host of constitutional and administrative law provisions ranging from equal protection to the “intelligible principle” required for congressional delegation of authority to cabinet agencies. Unlike 17th-century English monarchs, American presidents were not granted dispensing powers: As we’ve seen, the power to suspend a legal requirement can and will be used to arbitrarily favor the politically connected. Moreover, most of these waivers were never authorized by Congress in the first place!
Political-speech disclosure for federal contractors – In April of this year, President Obama released a draft executive order (still pending) that would require businesses with federal contracts to disclose independent expenditures on federal elections (political speech independent of candidates and parties). This order is intended to undermine the Supreme Court’s Citizen United decision — allowing independent expenditures by corporations, unions and other associations by discouraging federal contractors and their executives from engaging in political speech. Citizens United held that such expenditures do not enable the kind of quid pro quo corruption that campaign finance laws are allowed to regulate, so this draft executive order shows contempt for the First Amendment by chilling protected speech.
When the Democrat led Congress would not pass net neutrality, Obama’s Federal Communications Commission violated the Constitution by contravening Congress to restrict the freedom of Internet service providers to manage their network transmissions.
Oh and a United States citizen was assasinated on his call without due process a fundamental right of every America regardless of how evil they are.
Go on, tell me where I am wrong. I’m obviously a parrot.
This clip is from CNBC’s Goldman Sachs Documentary Power and Peril. Scarimucci a former Goldman Sachs talking about the kind of conditioning it took to be a Goldman Sachs employee.
President Barack Obama, along with many Democrats, likes to say that, while they may disagree with the GOP on many issues related to national security, they absolutely share their admiration and dedication to members of our armed forces. Obama, in particular, enjoys being seen visiting troops and having photos taken with members of our military. So, why is his campaign and the Democrat party suing to restrict their ability to vote in the upcoming election?
On July 17th, the Obama for America Campaign, the Democratic National Committee, and the Ohio Democratic Party filed suit in OH to strike down part of that state’s law governing voting by members of the military. Their suit said that part of the law is “arbitrary” with “no discernible rational basis.”
Currently, Ohio allows the public to vote early in-person up until the Friday before the election. Members of the military are given three extra days to do so. While the Democrats may see this as “arbitrary” and having “no discernible rational basis,” I think it is entirely reasonable given the demands on servicemen and women’s time and their obligations to their sworn duty.
The National Defense Committee reports:
[f]or each of the last three years, the Department of Defense’s Federal Voting Assistance Program has reported to the President and the Congress that the number one reason for military voter disenfranchisement is inadequate time to successfully vote.
I think it’s unconscionable that we as a nation wouldn’t make it as easy as possible for members of the military to vote. They arguably have more right to vote than the rest of us, since it is their service and sacrifice that ensures we have the right to vote in the first place.
If anyone proposes legislation to combat voter fraud, Democrats will loudly scream that the proposal could “disenfranchise” some voter, somewhere. We must ensure, they argue, that voting is easy and accessible to every single voter. Every voter, that is, except the men and women of our military.
Make no mistake, the Democrat lawsuit is intended to disenfranchise some unknown number of military voters. The judge should reject it with prejudice.