O’Donnell Goes to the Next Level–It’s about issues
Jul 25th, 2010 by David Anderson
Our friend and regular commenter Michael P. Borgia of the Daily Borg wrote a should read post on the O’Donnell Campaign.
With the clock ticking down towards a September 14 primary clash with political titan Mike Castle, Christine O’Donnell has for the first time in this campaign put forth a legislative vision, showing the voters of Delaware a glimmer of what to expect if they vote for her for to be the Republican nominee for United States Senate. In a press release issued by the campaign, Ms. O’Donnell laid out a five point legislative plan that her campaign will stand on.
Daily Borg asked in an open letter to Ms. O’Donnell dated June 18 and posted here and in part on Delaware Politics for the O’Donnell campaign to post such a manifesto, specifically asking for five ideas she will author legislation on and fight for on the campaign trail and in the Senate. On July 22, O’Donnell campaign aide Yates Walker released the following five points for consideration and debate.
O’Donnell first proposes “lower personal income taxes, capital gains taxes and corporate income taxes so that we can restore economic growth, create jobs and stability for our small businesses and working families.” O’Donnell does not give specifics, such as rates and schedules, but offers a wide array of taxes that can be cut. She should get special credit for mentioning the corporate income tax, which is not really a corporate tax, but an embedded invisible sales tax hiding in the price of everything we buy. America’s corporate tax rate is among the most onerous in the world. And because businesses bury it in the prices they charge, it hits the poorest among us hardest in the form of tax inflated prices. I suggest she offer this as two pieces of legislation, with the corporate tax rate cut offered separately. She could then offer legislation to extend and make permanent the provisions of the 2001 and 2003 tax cuts. Or offer other cuts as she envisions appropriate.
Her second proposal is actually two separate ideas. Defund and repeal Obamacare. Of course if it is repealed, it need not be defunded. Defunding Obamacare is a fall back position made necessary by the fact that Obama will still wield the president’s veto power for two more years. Republicans will not have the power to over ride it, no matter how well they do this fall. So defunding is the most likely course of action that will occur next year. The repeal part of the message is an arrow aimed right at her opponent, Rep. Michael Castle (R-DE-1). Castle clumsily stated after Obama care was passed that repealing it might not be the best use of Congress’ time, given the power of the veto. I believe however that fighting for one’s ideals and values is never a waste of time, even in the face of impossible odds, is never a waste of time. O’Donnell deserves great credit for taking an important stance that neither of Delaware’s endorsed Republicans, Castle or Michele Rollins (seeking Castle’s House seat) has when first asked.
Her third idea is by far her most visionary. Enact a 2-year capital gains tax holiday to spur economic growth and new investment, inject capital into the consumer market and free up capital for lending to small businesses. This shows a vibrant understanding of what is ailing our economy (credit crunch) and offers a truly stimulative suggestion to energize our credit markets as well as encouraging investment in general. In 1987, Reagan slashed capital gains rates and capital gains collections to the Treasury doubled over the previous year and sharply reduced the federal deficit, the only year during the Reagan Administration that deficits fell. I would take this a step farther if I were her and suggest she embrace Art Laffer’s suggestion for a complete federal tax holiday lasting sixteen months (see Archives July 10,2010). But this is a good start that not even Glen Urquhart, who is positioning himself as the Reagan conservative in his fight for the Republican nomination for House Of Representatives, has come up with.
Well, Michael you will see some interesting things from Reagan appointee Glen Urquhart so don’t count him out on that score.
There is a more including the final two proposals, but you have to venture over to the daily borg as we are limited by fair use. It is an interesting post. I encourage you to read it and return to this blog afterward of course.
Castle clumsily stated after Obama care was passed that repealing it might not be the best use of Congress’ time, given the power of the veto. I believe however that fighting for one’s ideals and values is never a waste of time, even in the face of impossible odds…
Why waste your time trying to ‘repeal’ Obamacare? Even if the Republicans take the House and the Senate (the latter, unlikely), it would take 60 votes in the Senate to break a filibuster (cloture), which simply isn’t going to happen.
Since the Constitution mandates that “all revenue bills shall originate in the House of Representatives,” it seems obvious that the most effective way to kill socialized medicine is to simply not fund it. There’s nothing the Socialist-Democrat majority (presumed majority) in the Senate could do about it.
If Republicans make sweeping gains, Democrats will be anxious to show they got the message and should be open to replacement legislation. If not, then yes defund it and bring up the worse features one by one and make them vote on them and attach them to one bill in the Senate and one bill in the house with them. Show people they don’t care what the people think and we will have a clear shot in 2012. Is that a waste of time or doing the people’s business? I think the latter. Either they deal or are dealt out. I don’t care which and it is impossible to know until after the election.
Why is anyone ever impressed by O’Donnell? She’s for lower taxes? God, I hope so, since she is a Republican, but let’s face it, does anyone think that getting Congress and then Obama to agree to lower taxes is going to work? Instead, the number one argument should be to extend the Bush tax cuts and make them permanent (we’re going to have a major recession if those tax cuts are allowed to expire).
As to repealing Obamacare, I agree that not funding it (the power of the purse) can work; but an outright appeal is a wasted effort.
Finally, a two year holdiay on capital gains may sound like a good idea, but short term incentives create more problems then they solve. Look at the recent temporary homebuying tax credit. Housing sales went up, as people rushed to take advantage, and then they fell off a cliff once it expired. Keeping the capital gains rate at 15% is the key.
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It was way too short it should have been two or three years. It was designed to clear the inventory off the shelves, but home sells take time especially with financing being harder to get. I agree that keeping the rate low is vital. A tax holiday would help move that capital which is sitting on the sidelines back in the market. That is why the idea is worthy of consideration.
Lots of tax cuts + no spending cuts = more bulls**t “conservative” thought. No, thanks.
Capital gains tax cuts incentivize reckless, short-term behavior on Wall Street and won’t fix the housing market.
Repealing Obamacare without a corresponding fix saves virtually no money and does nothing to reel in Medicare costs.
BTW, I can’t find the blog post on Daily Borg.
(we’re going to have a major recession if those tax cuts are allowed to expire).
Those tax cuts already caused a major recession. Stop them before they kill again.
And did you ever consider the possibility that maybe we do need to endure a recession to start eliminating the Bush structural deficit. There might not be a painless way out of the problems caused by the tax cuts in the first place.
The tax cuts prevent the economy from being drug down from oil price shocks, terror attacks, war, and natural disasters and helped create millions of jobs. I don’t think anyone who is of serious thought thinks they are the cause of the economic slump. The credit,mark to market rules, housing bubble, commodity inflation, and monetary issues were.
That is why I think we have to deal with this slump we have to address those issues. Taxes are not the magic wand. They are only part of the picture, but they are part of the picture.
I agree that this is only part of a platform. She has addressed spending cuts in speeches, but everyone knows as soon as they propose some, they will be attacked. Some candidates are going to make significant proposals, but they will do it with all of their ducks in a row and closer to the primary. I don’t know Ms. O’Donnell’s plan. We shall wait and see. I am just like you right now, an interested observer.
Ok, Anon. In all your prescient economic wisdom, would you please care to explain to us ignorant right wingers just how those tax cuts caused a recession?
Bush inherited an economic collapse that would have dwarfed the Obama Depression had those tax cuts not been passed. They liberated capital, spurred investment and kick started a massive growth surge in the economy. So much growth in fact that the budget deficit fell from $435 billion in FY 2003 after the last of the tax cuts was phased in, to only $147 billion by 2007.
Bush’s tax cuts spurred 24 consecutive quarters of economic growth, after the Dow Jones lost half its value, and the NASDAQ lost eighty percent of its value when the tech bubble burst. They also launched an all time record 52 consecutive months of job creation, during which more than 8.5 million jobs were created.
Anon, your assertion that Bush’s tax cuts caused this recession is clearly wrong. If anything, they have saved the economy from complete collapse for a second time. The markets and employers know this. That’s why they are shuddering at the thought of their expiration.
For the record, the current recession was not caused by Bush’s tax cuts, it was caused by the failure of Fannie Mae and Freddie Mac after the housing buble burst. President Bush warned for five years that their failure was a very real possibilty. Democrats laughed at him and defiantly blocked legislation in Senate committees. It took until 2005, when the Republican majorities were at their largest, to push reform legislation to the Senate floor.
Barack Obama helped fillibuster it to death. Three years later, Fannie and Freddie went down as Bush warned they would. And the Obama Depression was on.
Those are the facts. And you can look’em up, as Casey Stengel would say.
“Well, Michael you will see some interesting things from Reagan appointee Glen Urquhart so don’t count him out on that score.”
No slight intended to Glen at all, just praise to Christine for an excellent series of legislative proposals. I very much look forward to seeing what is forthcoming from the Urquhart campaign.
One thing that you and I have both learned while Kevin Wade was in the race is this….
Never count out Glen Urquhart….
Anon, the “Bush structural deficit”??????? Have you checked out how the deficit has not just ballooned under Democratic control of the White House and Congress–no, saying that the deficit ballooned would be an insult to balloons everywhere–the deficit went up multiples. Mike Borgia is exactly right about what the Bush tax cuts did for this country. It was a runaway housing market fed by ridiculous mortgage lending that caused the economy to seize up.
I’ve never understood how anyone can think tax increases help the economy. Let’s see if I can explain this in terms that make sense. First, imagine that you own a business (or are a “wealthy” taxpayer) and your taxes go up. What are you going to do? Even if you do nothing, and just accept the higher taxes, that means that you’ll have less money in your pocket to spend, whether its on restaurants, movies, a new car, clothes, new equipment for your business, new training for your employees, or whatever you spend money on. Fact is that if you have less money, you spend less (unless you’re the federal government, of course). Now, multiple that reduced spending hundreds, thousands, and indeed millions of times, and suddenly what do you find–that’s right, a great reduction in economic activity. Restaurants, movie theaters, retail spending, business investment, etc., all goes down. People and businesses make less money, they have less income, they pay less taxes. It’s a bad spiral.
In addition, another way that businesses react to higher taxes, as well as less economic activity, is to cut costs. Most significantly, that means fewer employees. That’s what our company will do. Unfortunately, that’s just common sense. So, higher taxes will not only lead to less economic activity, they will also increase unemployment.
So, unless we want to cause an even bigger recession than we’re in now, we need to extend the Bush tax cuts. If you think it through logically, and our honest with yourself, you’ll see this is right (and, indeed, economic study after economic study backs it up). But, if you’re a knee-jerk liberal democrat who believes in big government, you’ll refuse to believe common sense and just make a bad economic situation even worse.
First, imagine that you own a business (or are a “wealthy” taxpayer) and your taxes go up. What are you going to do?
You are going to avoid those higher taxes by putting the money back into your business and hiring people, instead of skimming the money out of the company and laughing at the piddling 15% tax.
It was a runaway housing market fed by ridiculous mortgage lending that caused the economy to seize up.
After destroying jobs with the business tax cuts, Bush/Greenspan kept voters fat and happy by kiting the economy on the housing bubble. It worked for a while but now it is time to pay the piper.
You are not paying attention, Anon. Bush was for five years the only voice in the country warning of what was going to happen if Fannie and Freddie were not reformed. John McCain did join him later as the chief sponsor of the Senate legislation Obama helped kill.
You are not going to “avoid taxes by putting money back in your business and hiring people.” You hire people to deal with increased demand. Taking money from my business leaves me less to hire and pay people. Taking more money from my customers and putting it in the government reduces demand. A business compensates for higher taxes in one of two ways. Either raising prices to make up for lost profit margin or by firing workers to do the same thing. The resultant loss in economic growth denies increased revenue to the government. Nothing good ever comes from higher taxes. That has been proven over and over and over again.
Nothing good ever comes from higher taxes.
So the balanced budget wasn’t “good?”
The balanced budget was not created by higher taxes. Bill Clinton raised taxes in 1993 in what was at the time the biggest single tax hike in history. But CBO projected that the federal deficit would double by the end of Clinton’s first term due to reduced economic growth. The balanced budget was created by Newt Gingrich forcing Clinton to accept a cut in the capital gains tax rate as part of their 1994 budget deal. That, combined with the tech boom, created a surge in capital gains receipts to the government that is exclusively responsible for balancing the budget during the last three years of Clinton’s term and the first year of Bush’s. The tech heavy NASDAQ increased its value by a factor of 6.64 over those crucial years. From 774, in just five years the NASDAQ reached 5,146 at its peak on March 10, 2000. The meteoric rise occurred almost right in line with the fall in the capital gains rate.
It’s basic rocket science. Fuel (tech stocks) plus Oxidizer (capital gains tax cuts) equals thrust (soaring revenues to the Treasury).
When the NASDAQ collapsed, eventually falling all the way to 1,200 by mid 2002, all those capital gains receipts to the government vanished. And the surpluses along with them.
It is sad how stupid some people are on taxes and their implications.
The reason so many people are so incredibly stupid on taxes is the desire to set a tax rate in order to get a certain revenue. This sort of action never ever works.
Tax policy should be set to increase savings, growth and investment. Those things give you revenue in the name of economic growth.
in some latest news see what one country has to say about Capital Gains which is double taxation clear and simple.
http://www.cato-at-liberty.org/2010/06/20/russia-scraps-capital-gains-tax/
Dems routinely dodge taxes. John Edwards to avoid Medicare taxes, John Kerry to avoid a boat tax and the list goes on ending with Charlie Rangel.
For those who say what is the GOP plan? A Taxpayers Bill of Rights would be a good start with a simplified tax system.
Those tax cuts already caused a major recession. Stop them before they kill again…..anon
Spoken like a true Keynesian moron- see Europe.
Gee, how did the United States dominate the world without Marx and Keynes?
Gee, how did the United States dominate the world without Marx and Keynes?
It didn’t.
It didn’t? In an economic context ( the context within which we are dealing when talking of Keynes and Marx), we certainly did (see WWII).
Thanks Borgia for looking at her proposals objectively. There’s no doubt that as time carries forward her plans will very much resemble your suggestions. I hope you will continue to contribute to a growth in her plans. I agree Urquhart should be very similar and with these two as a 1 – 2 punch in the House and Senate Delaware will become a leader in reviving America.
Tax cuts, especially the ones proposed by O’Donnell inject capital into the markets and increase investment potential. They also increase the buying power of individuals and influence spending directly. Another initiative that I know Christine would champion is reform (or removal perhaps) of Fannie and Freddie to ensure solvency and security. This would help to strengthen lending markets and drive prices down.
we certainly did (see WWII)
Oh, sorry, I thought FDR was a Marxist Keynesian in your demonology.
The free-market lords of England came running to the Marxist Keynesian FDR when they couldn’t fend off the National Socialists.
Thanks, Evan…I hope I can continue to help any and all conservatives grow their plans so that more and more of them fill the seats in the House and the Senate. We win when we paint our vision for American not in pale pastels, but in bright primary colors. We win when we lift Americans up with our ideals, not tear others down with our anger.
C’mon Anon, you really can’t be that unknowledgeable can you? Did you really say:
“You are going to avoid those higher taxes by putting the money back into your business and hiring people, instead of skimming the money out of the company and laughing at the piddling 15% tax.”
First of all, you have to pay income tax BEFORE you can invest anything in your company. Second of all, if you need to maintain the same income or profits from your business, you need to cut expenses and employees are often the first to go because they’re an easy variable expense that can cut quickly and/or replaced later.
It’s obvious you’ve never run a business or had to meet a payroll; otherwise this stuff would make sense to you.
redacted
Note from me: You could at least stick it under a relevant thread. Try again.
You don’t know much about business and taxation, do you? You are mixing up all sorts of taxes and their effects.
First of all, you have to pay income tax BEFORE you can invest anything in your company.
No. Company earnings used to reinvest in facilities are not taxed. Payroll is not taxed (yes, the so-called employer contribution really comes out of the employee paycheck).
A stiff capital gains tax used to make executives think twice before pulling money out of the company and putting it in their pockets. Now at 15% it’s a no-brainer to pump and dump. The low tax encourages short-term schemes on Wall Street.
Second of all, if you need to maintain the same income or profits from your business,
Capital gains is a personal tax, not a business tax. It does not affect profits. Capital gains tax does not apply to paychecks.
you need to cut expenses and employees are often the first to go
Capital gains tax does not apply to your paycheck.
If you can cut employees and still “maintain the same income or profits,” then you should go ahead and do it regardless. That is how business works.
“Capital gains is a personal tax, not a business tax. It does not affect profits. Capital gains tax does not apply to paychecks.you need to cut expenses and employees are often the first to how go”
Hard to believe anyone would say that sort of garbage.
Doesn’t affect paychecks? Who signs the paycheck on the front, the Tooth Fairy? No the owner does.
from a FR website:The Double Taxation Issue
‘When a business, even if it is a small business, earns profit, the small business owners wind up facing double taxation. They will have to pay the personal capital gains tax along with a small business capital gains tax. That’s because, when the business’ assets are sold, the owner profits as an individual, even if the funds go to the business he or she owns. The only way to avoid double taxation is to classify the business as a S corporation. Under classification, the owners would still have to pay a personal capital gains tax, but heir companies will be exempt from the small business capital gains tax. While the businesses do have to meet certain requirements, small businesses are more likely to meet them than other types of businesses.’
Mike Protack
Oh, sorry, I thought FDR was a Marxist Keynesian in your demonology.
He was a Keynesian, for sure, and obviously you’ll need ‘deficit spending’ when you’re fighting a World War against Imperial Japan and Nazi Germany, and then rebuilding what you destroyed.
But, the industries thatbuilt the most potent war machine in the annals of history (Ford, Packard, Curtis-Wright, et. al.) were products of pure, laissez faire capitalism.
What are the most ‘Keynesian’ states? Europe-broke, California-broke, New York-broke…need I go on?
So steal from the people of Wyoming…that’s ‘fair.’
They will have to pay the personal capital gains tax along with a small business capital gains tax.
Dummy, Obama has cut capital gains tax for small business dramatically and has pledged to eliminate it entirely. It’s in the hated stimulus bill.
You guys need to read some news once in a while and update your buzzwords. The world has changed.
But, the industries that built the most potent war machine in the annals of history (Ford, Packard, Curtis-Wright, et. al.) were products of pure, laissez faire capitalism.
Nope… they were the beneficiaries of a command and control economy directed by Commandant Roosevelt.
Oh, I see…Henry Ford and James Ward Packard didn’t really found their companies and develop their products….FDR did.