From a WSJ blog:
Former Treasury Secretary Robert Rubin, speaking at the same event, also pushed fiscal stimulus while stressing the importance of signaling concerns about the deficit. “The single most important thing we can do right now is a very large fiscal stimulus married with a commitment, once the economy is healthy again, to put in place a multi‐year program to get back to a sound fiscal position,” he said.
In a letter to the Wall Street Journal (Nov. 5), Robert Gordon and James Kvaal responded to my critique of their estimate that McCain’s tax plan would cut big oil’s taxes by $3.8 billion. They claim that “corporations as profitable as ExxonMobil pay a 35% rate on more than 99% of their profits.” Yet they also say, “Our code is riddled with special interest deductions, credits and exemptions that shield corporate profits from tax.” Well, which is it?
If big oil companies actually "pay a 35% rate on more than 99% of their profits,” then Gordon and Kvaal might be justified in ignoring McCain’s bold plan to end the oil companies’ “deductions, credits and exemptions.”
As the Committee for a Responsible Federal Budget noted, “Senator McCain . . . would repeal special expensing rules for oil and gas companies, eliminate the foreign tax credit for oil companies, disallow expensing of exploration and development costs, encourage an increase in royalty rates for drilling on public land, subject working interests in oil and gas to the passive loss rules, eliminate 15 percent tax credit for enhanced oil recovery costs for tertiary wells, and eliminate special depreciable lifetimes for certain assets used by oil companies.”
CFARB estimated that McCain’s plan to tighten up deductions and credits would raise oil company taxes by $6 billion in 2013. That would certainly be offset to some extent, of course, by lower tax rates—30% in 2010-11 and 28% in 2012-2013 (Gordon and Kvaal wrongly assumed the rate would drop to 25% in 2009).
If big oil really pays 35% tax on virtually all their profits, however, then such loophole-closing would simply be a waste of time.
If big oil does not surrender 35% of profits to the IRS, however, then Gordon and Kvaal’s estimates (which assume that statutory tax rates are the same as effective tax rates) are worthless.
Paul Starr is an ardent advocate of (dare I say it?) socialized medicine. He co‐founded the left‐wing magazine The American Prospect. And he wrote the definitive history of the medical profession in the United States — seriously, you should read this book. Which is why Republicans should take heed when he writes:
Political leaders since Bismarck seeking to strengthen the state or to advance their own or their party’s interests have used insurance against the costs of sickness as a means of turning benevolence to power.
As noted earlier, the political survival of the Republican party probably depends on its defeating whatever health‐care plan emerges from the scrum created by Messrs. Obama, Baucus, Kennedy, and Wyden.
If the GOP fails, the beating it took in 2008 will pale in comparison to the decades‐long drubbing that will follow.
As Detroit’s lobbyists rack up the expenses trying to paint the Big Three and the UAW as innocent victims of the credit crunch, American workers cheer the groundbreaking of an American automobile plant in the American heartland by Honda, which has been producing vehicles in Marysville, Ohio for more than a quarter century now.
Let’s not forget that it’s these companies — the one’s capable of making the investments in manufacturing, the one’s who are leading the way in terms of producing fuel‐efficient, comfortable, stylish vehicles that Americans have been inclined to purchase — that are implicitly taxed and burdened when their competition is subsidized.
A “bailout” costs taxpayers/consumers in many more ways than one.
A few months ago, I was a little miffed at the good folks over at New Talk for hosting a discussion on what to do with the No Child Left Behind Act in which the moderator immediately put scrapping the law off‐limits. How things have changed! Today through Thursday New Talk is hosting a discussion specifically asking whether the law should be canned. It’s an especially timely topic given some developing ideological battles, and a topic worth contemplating in its own right. So check out the New Talk. Not the same as the Old Talk!