November 11, 2005
Carter-sized Malaise...
I was pretty down on the current GOP in a post the other day after reading the cover story in this week's Weekly Standard. Those were happy days by comparison. An email today asks "When did [the GOP] become the party of Al Gore?" To say the least, the inevitable power struggles in a post-W Republican party are too early and not going well.
The WSJ asks why we need 55 Republican Senators.
Republican disarray on Capitol Hill reached self-ramming speed yesterday, as both the House and the Senate abandoned key policy priorities as they tried to pass a budget. Hide the children because this is getting ugly.In the Senate, Maine's Olympia Snowe helped to scuttle even a single-year extension of the current 15% tax rate on dividends and capital gains that is due to expire in 2008. Senate Finance Chairman Chuck Grassley was thus forced to postpone a committee vote on extending a tax cut that has been crucial to an economic rebound that since mid-2003 has been marked by 10-straight quarters of nearly 4% average growth. Tell us again why Republicans need 55 Senators?
Indeed. But what about the stalwart, disciplined, ideological, GOP House? The boys who can "pass a ham sandwich." Got them, right?
The chaos was even worse in the once-disciplined GOP House, where leaders had to pull their budget from the floor for lack of a majority. The immediate cause was the revolt of the 25 House Members listed nearby, who signed a letter demanding that a provision to allow drilling in the Arctic National Wildlife Refuge be stripped from the bill.
[...]
America can survive these policy setbacks; the question is whether the Republican majority will, or even should. If a GOP Congress can't vote to sustain its own wildly successful tax cuts, or to explore for more domestic energy, let's just turn Congress over to Democratic Leader Nancy Pelosi and at least have truth in liberal advertising.
This is the WSJ Ed Page, the last of the true believers.
Where is the White House? Bill Kristol asked why they won't defend their sacred honor, if not their successful tax cuts. Dick Morris, in an interview that precipitated my friend's email, said that the President can rescue the party with a good speech and a strong agenda. I believe this to be true but I don't know where the White House is. Neither does Bill Kristol.
Will they call the now antiwar Democrats on their disreputable rewriting of history? Incidentally, are the Democrats ready to defend the proposition that we should have left Saddam in power? Is it okay with them if Zarqawi drives us out of Iraq? Will the administration challenge them as to what their alternative is? Will the administration take the time to put spokesmen forward, and recruit surrogates, to make the case for victory? Or do they enjoy being punching bags at the White House?Bush has been in a similar position before. We forget how much trouble he seemed to be in early in 2004. Then Kerry was nominated, and the Bush team focused the country on the real choices before it. In the contrast, Bush did fine. Bush once again needs to fight for support for his policies and to draw a contrast between his policies and those of his opponents. If you do not defend yourself against your critics, your political standing is going to erode. Bush owes it to himself, to his supporters, to the soldiers fighting in Iraq, and to the country to fight back.
The only hope for the party is bold leadership from the Executive. I have no idea if it's going to happen.
Politics Posted by John Kranz at November 11, 2005 11:27 AM
Are you still beating your wife? That is how the question of Iraq is being framed. (I'll warn you up front I am just in a mood today) In other words, frame the question a certain way and there is no right answer. Why did the Democrats who now question the war vote for it when they saw the same intelligence the White House did? Back up a second there, I think their point is that they were given faulty intelligence. Worse is the "What should we have done leave Saddam in power?" question. Hey smart guys, how about plan the overthrow a little better, maybe a contingency or two rather than assuming the rosy (pun intended) scenario of the troops showered with flowers. Who assumed that the Baathists would just quietly slink away, that the Shiites, Sunnis, and Kurds would all group hug once Saddam was gone? What transpired in the run up to the war doesn't even begin to count as planning.
How about those budget bills as well? (Again, grab your gain of salt, I am grumpy today) Several of us have agreed here about the cowardly actions of pork riders attached to omnibus bills in the dark of night. I think Artic drilling should be explored, but it is an important enough energy concern to warrant its own bill. The capital gains and dividend tax cuts, again, are you still beating your wife? So as johngalt would say a corporation is not a thing, but a collection of individuals, in this case investors and employees. All are individuals at some point down the ladder (groups of individuals in mutual funds, etc.) and all utilize public resources supported by taxes. Now in reality most people are both investors and employees, but for sake of example lets look at the two extremes, the pure employee and the pure investor. One makes his entire living from wages, the other from dividends and capitals gains of his investments. Why two tax rates? Lower capital gains taxes encourages investment which is good for the economy. Lower salary taxes also encourage investment as well as saving and consumer spending, all of which are good for the economy. We just changed how a corporation is taxed on dividends and the tax on their profits are tied in a rather indirect manner to the capital gains received by their investors so the whole double tax argument doesn't hold water.
Ah well, its Friday, think I"ll grab beer and wash the grumpiness away.
Posted by: Silence Dogood at November 11, 2005 3:11 PMNot too much beer my friend. Man, I thought the Republicans were in a bad mood...
I'm guessing you saw or encountered somehow the President's speech. You can't possibly be angry about the Republican machine falling apart.
I was glad he stood up. I think they have stood still as Democrats rewrite history. Bush Lied, indeed.
Three are principled arguments against the war and against the way it has been prosecuted. The trouble, Silence, is that you make them better than anybody in your party (I trust it is fair to call you a Democrat; I'll retract if not).
The Democrats I see say that Joe Wilson told the truth and that Bush lied -- both of those are patently wrong.
Now they are being held responsible for voting for the war and now being against it. I think you can make defenses for that but I surely don't find it out of bounds to ask.
I for one, don't like the "everybody said it" defense. I distinctly remember many layers of arguments for the war -- that one has turned out to be over represented is not a crime.
I think the double tax on capital does hold water. Let's try that over lunch.
Posted by: jk at November 11, 2005 6:26 PMAnd as for ANWR, I don't think it is "hidden" in a budget bill, that's a parliamentary trick to avoid a filibuster in the Senate.
Posted by: jk at November 11, 2005 6:28 PMJK proposes to address Silence's attack on tax policy over lunch. (OOOH, invite me! Inivite me!) But that would not benefit any of our loyal readers, so I'll chime in here.
Silence makes a defensible point that incomes and dividends should be taxed equally. And he makes an equally valid, if unintentional, argument that those taxes should be as low as possible. But while addressing these points he ignores the first round in the double-taxation scheme, the taxes on corporations themselves.
These legal collections of individuals are taxed as though their members were not also members of society, subject to the same taxes as everyone else. Silence's argument, fairly citing my own, that individual members of corporate organizations "utilize public resources supported by taxes" is the one I use to argue that corporations should not be taxed whatsoever. Tax every individual, fairly, transparently, and minimally.
If we cannot agree that the benefit to society from the existence of corporations (jobs, goods and services, supercharging of the flow of capital) is justification enough for their existence WITHOUT imposing taxes on top of this, then let's just eliminate them. Even without the commercial power they create, our society will be better off when everyone understands the simple fact that all wealth comes from and is controlled by individuals. It is when groups of those individuals direct the wealth of some to benefit others that we have problems. Corporate groups have the profit motive and fiduciary responsibility to guide them. Government has only a populist ballot box.
Posted by: johngalt at November 13, 2005 10:20 AMAs for ANWR, I think I heard that the Senate is expected to keep the drilling provision in their bill and push hard for the House/Senate joint measure to include it. In the meantime, the Democrat assault on Tom DeLay has scored its first major accomplishment. We need the hammer!
Posted by: johngalt at November 13, 2005 10:23 AMWe should have a blog lunch. I keep wanting to try when Sugarchuck is in town or see if Alex can find a Philly-Alaska flight with a long layover in DIA.
You capture my double-taxation argument pretty well, thanks for that. But, your suggestion to eliminate corporations so we all accept the power of the individual -- ARE YOU MAD????
Sorry, I believe the corporation to be the greatest invention between the wheel and the transistor. It enables sharing of risk and reward, empowering things (like discovering transistors) that no individual could possibly accomplish.
I am used to lefties bashing "evil corporations" but this is the first attack on this most noble institution from the right as it were.
Posted by: jk at November 13, 2005 12:02 PMYou know I've no hostility towards corporations, JK. It was more of an "if you don't appreciate the golden goose then you might as well kill it" sort of comment.
Posted by: johngalt at November 13, 2005 10:14 PMYes, JK I am a Democrat, no retraction needed. I have spent time as an Independent but finally realized that all it did was keep me from voting in the primaries. (Yes, yes, I should get around to giving the Republican party a try, but hey, you have to keep a few moderates inside the Democratic party too.)
Actually johngalt it was intentional my reference to the fact that taxes should be as low as possible, I rather like my paycheck and feel I am absolutely the best steward of my money - as they say, could be just 535 names out of the phone book. I was actually supporting the view that individuals and not corporations should be taxed. Knowing that views around here lean that direction my point was why support the reduction in the tax rate for dividends? It would seem that the corporation should not be taxed but the individuals that profit from their success should, and equally regardless of whether they make that money through salary or investment. If the tax rates were the same then it seems like it would be easier to sell the concept of not taxing corporations directly on their profits. The investors (in effect "the corporation") would then be paying "their fair share". It would also seem that without complicated tax reduction accounting schemes that market investing would be more transparent, rational, and probably profitable even for the "little guy", but I suppose I am preaching to the choir here. It would sure seem that a simplified tax code could be sold to the public with a good argument about how equitable it could be. For all the Republican spin machine's prowess, I think their selling of the estate tax elimination and dividend tax reduction plays right into the hands of the class warfare folks. The current system allows more tax shelters and reduction schemes for those corporations and wealthy elites. It appears that Paris Hilton (just adding some blog hits JK) is not paying her fair share of taxes. If you want bipartisan support for tax change why does it seem that no one is following this line of reasoning? If Paris was paying the same tax rate on her investment income as Joe Everyman was on his salary wouldn't a lot of the arguments go away?
Posted by: Silence Dogood at November 14, 2005 1:00 PMDid you say NAKED PARIS HILTON PICTURES???
The short answer is that if you have money to invest, you have earned it and paid tax upon it, taxing investment is double taxation. Ms. Hilton may be undertaxed but her ancestors paid taxes when they earned it and when they passed it down to the star of PARIS HILTON SEX VIDEOS HERE!
This is arcane but my real quibble is with your calls for equitable taxation. You are absolutely right that the GOP plays right into the "tax cuts for the rich" trap. The trouble is that “the rich” pay the taxes.
The Bush tax cuts made the system more progressive. When I think of equitable taxes it would be the fair or flat tax that are dismissed as regressive.
The Weekly Standard story I have been whining about suggests the GOP eliminate all taxes on sub-100,000 income households. It would be great politics but it would not be fair.
I am deeply concerned that a growing number of people have no reason to vote for limited government, fewer services or lower taxes because they pay little or no taxes and get big benefits. If you're buying for the big blog lunch and we are picking the place, we have no incentive to economize.
Posted by: jk at November 14, 2005 2:37 PMMaybe I just don't get it, and it being economics that is entirely possible. The money that was invested for PARIS HILTON THE HOME VIDEO SEX STAR (how long can we keep this up really?) was taxed when it was earned some time ago but now it currently continues to earn interest. This interest seems like new income to me, certainly PARIS HILTON can spend it that way. She is also an individual and benefits from roads, national defense, and other services paid for by taxes. Why should this income or hers be taxed differently than mine? The fact that her grandfather was taxed when he originally earned the capital seems irrelevant to me. When I get my income, it is taxed, but the money I get comes from the sale of a product paid for by someone (or a corporate group of people) who were also taxed on that money when they earned it. It turn I can buy a car from Ford and my money will eventually wind up in one of their employee's salaries where it will be taxed again. This is a natural cycle of capital is it not?
Posted by: Silence Dogood at November 15, 2005 11:01 AMSilence, the NATURAL cycle of capital is to act as a liquid medium for facilitating the free trade of goods and services. Think of it as the blood in your body. Red cells exchange CO2 for O2 in your lungs and then carry that oxygen to muscle cells throughout your body. There the red cells conduct the opposite exchange. But the important part of the analogy is between the effect of taxes on the capital cycle and arterial plaque on blood flow. They both create a restriction to flow. They retard progress. They are COUNTER productive. The analogy between taxes and arterial plaque holds when they both increase to a critical level where, the patient dies.
Your PARIS HILTON scenario is problematic, and illustrates exactly why so many of us advocate for a consumption tax to replace our current creation taxes.
In closing, we can keep up the PARIS HILTON NUDE PHOTOS ruse for at least as long as angry left-wing moonbats, many in the US Senate and House of Representatives, can continue to say with a straight face, "BUSH LIED, PEOPLE DIED." For too many people in this world there is no longer any such thing as actual truth, only perceptions.
Posted by: johngalt at November 15, 2005 2:54 PM | What do you think? [11]