Rebating what and why?

As the Federal Reserve puts the stability of the US dollar at risk with an overreaction to a stock market dip, politicians in Washington are touting a “fiscal stimulus” package to help pull the country out of a decline in the rate of economic growth. This is beyond the wildest dreams of John Maynard Keynes. Or perhaps even a nightmare he’d share with classical economists.

A good tax cut package would, as I’ve noted before, be a great pro-growth policy and properly done a non-inflationary, productivity increasing and revenue enhancing one. If market hysteria and a desire to out-Keynes Keynes and out-helicopter Helicopter Ben could bring that about, great. But it’s looking more like an extra round of ill-advised pork barrel spending and “tax rebate” checks are the plan.

The question is “What are they rebating?”

The politicians seemingly want to duplicate the apparent success of the 2001 tax rebate checks. (Of course, the chance to send a check to every voter in your district in an election year is too good for Congress to pass up, even if it means sleeping with George Bush and Dick Cheney.) The big problem with this thinking is that those rebates were just the front end of the extensive Bush tax cut package. That package did two major things to build confidence for both investors and consumers. It provided tax relief to literally everyone who paid any federal income taxes at all, from the top to the bottom. Second, it lowered marginal rates: a pro-growth, anti-inflation, revenue enhancing policy. The combination gave taxpayers the confidence to spend or invest the $500 rebate checks and a whole lot more.

A rebate that leaves taxpayers asking “Where’s this coming from?” and “How will we pay for it?” is not such a confidence builder. It may lead to a small spending spurt, probably less than 100% of the checks cut. It won’t do much to fundamentally affect consumer or investor behavior as the dollar’s erosion against the euro accelerates (Who’d have expected the Europeans to become sound money fanatics just when the Fed loses its collective mind?) and we suffer the consequences in the price of imports, especially energy imports.

If the President really wants to do something worth doing, he should take a look at Giuliani’s tax plan or even consider a payroll tax cut that would put money in consumer pockets and supercharge the small business engine. Rebates with no rhyme or reason are not the solution to this non-problem.

[tags]tax rebates,economy,inflation,Federal Reserve[/tags]

Bury McCain at Wounded Knee

With the South Carolina primary looming and John McCain back in the limelight as the Favored Son of the Media, now is a good time to review the history of the Distinguished Gentleman from Arizona. He’s the name you know, isn’t it time you knew more than the name?

Of course, McCain was co-sponsor of the single largest attack on the Bill of Rights to come out of the US Senate in the last thirty years. His law put “a federal bureaucracy in charge of deciding who can say what about politicians during campaign season.” But that is just the beginning of what makes McCain the wrong man for the job of President.

McCain paints himself as a war hero, a POW and a victim of torture. He was all of those, and, if the story stopped there, that would go a long way toward justifying a McCain candidacy. But the story doesn’t stop there. Ross Perot, longtime champion of the POW-MIA movement, states that “McCain was adamant about shutting down anything to do with recovering POWs” who were left behind in Vietnam or even sent to the Soviet Union to be used in human experimentation. McCain got out of the Hanoi Hilton, but is perfectly willing to leave other American’s unaccounted for in his quest to redeem himself with those he referred to in 2000 as “gooks.”

And McCain’s racist tendencies don’t stay on the other side of the Pacific. McCain has supported the forced relocation of Navajo in Arizona, in an odd blend of Kelo v. New London and the Wounded Knee incident (if not the massacre). That he supports this move to allow coal mining by Peabody Energy, while siding with global warming alarmists out the other side of his mouth makes this dark comedy even more farcical.

And what about Campaign Finance Reform? The Great One, Mark Levin puts it quite succinctly “by his own standard, McCain is corrupt.” Or, as the Senate Select Committee on Ethics put it:

Mr. Keating, his associates, and his friends contributed $56,000 for Senator McCain’s two House races in 1982 and 1984, and $54,000 for his 1986 Senate race. Mr. Keating also provided his corporate plane and/or arranged for payment for the use of commercial or private aircraft on several occasions for travel by Senator McCain and his family, for which Senator McCain ultimately provided reimbursement when called upon to do so. Mr. Keating also allowed Senator McCain and his family to vacation with Mr. Keating and his family, at a home provided by Mr. Keating in the Bahamas, in each of the calendar years 1983 through 1986.

“…[F]rom 1984 to 1987, Senator McCain took actions on Mr. Keating’s behalf or at his request. The Committee finds that Senator McCain had a basis for each of these actions independent of the contributions and benefits he received from Mr. Keating, his associates and friends.

And, to paraphrase the Committee’s conclusion, McCain stopped just short of prison, ending his actions on behalf of Keating as soon as he learned there was a criminal investigation underway. With friends like McCain…

And speaking of McCain’s friends, Charles Keating is a fairly upstanding fellow compared to another of McCain’s buddies – mob boss Joe Bonanno. At Bonanno’s 90th birthday party in Tucson in 1995, “Governor Fife Symington and Senator John McCain sent their regrets along with birthday greetings that were read aloud to the guests.” Symington was later forced from office while under investigation for his involvement with a failed savings and loan, was convicted on extortion and bank fraud charges and eventually pardoned by President Clinton.

In more minor matters: McCain dumped his wife who had waited for him while he was in the Vietnamese prison and married an heiress 18 years younger than himeself a month later. McCain can’t decide if he’s Baptist or Episcopalian, apparently it depends who he’s talking to. McCain opposed the Bush tax cuts before he supported them among other flip flops.

South Carolina Republicans should do the rest of the GOP, and the country, a favor and shut down John McCain during Saturday’s primary.

[tags]John McCain,flip flop,Republican,GOP,South Carolina,primary[/tags]

Full disclosure: I can’t stand John McCain. He’s roughly tied with Hillary Clinton for 300 millionth place in my personal Presidential preference poll. And yeah, I know that Wounded Knee is in South Dakota not South Carolina…but who wants to wait until June 3 to lose this sucker?

Giuliani Tax Cut Plan – "exactly the kind of plan economic conservatives should embrace"

Club for Growth President Pat Toomey characterized the Giuliani tax cut plan, unveiled Wednesday in Florida, as “exactly the kind of plan economic conservatives should embrace.”

The Giuliani tax cut plan would extend the 2001 and 2003 tax cuts immediately; eliminate the Death Tax completely; lower the capital gains and dividends tax rate to 10% and index capital gains to inflation; lower the corporate tax rate from 35% to 25%; and permanently index the Alternative Minimum Tax to inflation with a plan for eventual elimination.

The Giuliani tax cut plan also contains a particularly bold pro-growth tax simplification strategy that would give taxpayers the option of opting into a simple tax plan in which their taxes could be done on one page. Instead of the current tax behemoth, the voluntary tax plan would constitute across the board cuts in marginal tax rates by proposing three simple rates of 10%, 15%, and 30%.

Americans for Tax Reform called the plan’s tax cut “the largest in history” and “the most pro-growth tax cut of any GOP presidential candidate”:

This multi-trillion dollar tax cut would easily exceed the level of the Reagan or Bush tax cuts. This package is the most pro-growth tax cut of any GOP presidential candidate…
“This tax cut—the largest in history—would represent a monumental leap forward for the American taxpayer and the U.S. economy,” said ATR President Grover Norquist. “In particular, cutting the corporate income tax and the capital gains tax is just what is needed to keep us from falling into recession.”

This move makes Giuliani the unmatched conservative choice for the GOP nomination.

Mike Huckabee’s alignment with the Fair Tax is the only ostensibly conservative plank in his personal platform. Given his atrocious record on taxes in Arkansas and his characterization of the Fair Tax as “progressive” on a Tonight Show appearance, it’s hard to believe that even in this he’s truly committed to conservative principles.

Ron Paul is the most conservative of the candidates, but unfortunately his commitment to ideal principles has stood in the way of achieving the best possible gains especially in the area of free trade. His position that we should prevent terrorism by behaving better on the world stage is not an excuse for terrorism, but is actually the same as the Bush administration’s principled prescription for preventing a new generation of terrorists. Unfortunately his dogged absolute adherence to the Founders’ warnings against entangling alliances led him to the idea of withdrawal when the Bush administration’s plan of engagement to promote democracy and liberty is proving itself by the day. Still, as the most conservative, pro-life candidate, Paul deserves the vote of those Republicans who can’t vote for Giuliani because of his stance on abortion.

Romney has flip flopped on so many issues of concern to conservatives that it’s hard to remember them all and not merely in his role as Governor. It’s easy to imagine President Romney signing the tax cut before he vetoed it.

McCain opposed the Bush tax cuts, pushed through the worst violation of the Constitution in recent years and supported the second worst. He does deserve credit for supporting the new strategy in Iraq, but only if he’s willing to accept blame for joining the chorus of dissent that undermined the original strategy and led Donald Rumsfeld to abandon the fight. I hope he’s not elected, as the things I expect to be writing about him may make him rethink his stance on torture.

Fred and Duncan…we hardly knew ya…

[tags]Giuliani tax plan,tax cuts[/tags]

Full disclosure: I’m a member of the Club for Growth and contributed to the Club, the Giuliani campaign and the Paul campaign.

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