Let's reduce the US Corporate income tax rate

There is much talk about increasing corporate income taxes (which represents about 9% of all Federal revenues). But consider that today the amount that we collect (as a percentage after credits and special tax breaks) is close to the total amount collected in other countries. How about this proposal: Let’s make the corporate tax rate (foreign and domestic) a flat 10% (instead of the nominal 35% today). You get zero tax loss carry forward. If you lose money one year you eat it. If you make money the next year you pay 10% of your profit (sorry General Electric). Very simple and we will spend far less on tax accountants and attorneys.

This should give an advantage (on one of many factors) to US companies and should result in more jobs being created in the US rather than abroad. But let’s make up for lower tax revenues on the back side. For individuals let’s increase both long-term capital gains rates and corporate dividend rates from 15% to 22%.

The value of the S&P and the Dow would immediately go up on this news. This would result in optimism not seen in years and this alone would translate into optimism of CEOs deciding whether to open a new plant or not in the US. We would collect more revenues from these categories (in total) and we would create far more jobs.

My brother's three requests to Republican Leadership

Three requests to Republican Leadership

Like many Americans, I have watched hours of coverage of the Debt Limit circus in Washington. As a Republican, I have had my moments of pride during the past months but more often I have been discouraged by the behavior and game playing of the leaders of my party. My frustration centers on the fact that I am a parent first, an American second and a Republican third. As a citizen of this country that has offered me so much opportunity, I have one primary wish. I want my children and their children to have similar opportunities. With this in mind, I offer the following three requests to the Republican leaders:

Lead the way on transparency: Virtually every budget reduction proposal is based on inflated baseline projections and very weak financial models. Political leaders are purposely misleading the nation about the true state of our budget and the actual impact of proposed "cuts". If the Republican party is going to be the party of transparency, you must address the following distortions that you help propagate:

1) Baseline projections must assume flat spending. Slowing the growth of spending is not a cut. It is only a smaller increase. If public companies used your language to describe their forecasts, the executives would go to prison for fraud. Stop using misleading financial projections.

2) Revamp the CBO models: By law, the CBO models distort the impact of budget cuts and tax increases on the economy. If tax rates go up, there is downward pressure on the economy. If tax rates go down, there is a lift for the economy. Why do you continue to allow the CBO to publish bogus impact projections? Lead the way on changing the laws.

3) Plan for rainy days: Is there a single budget plan that has been put forth that assumes that we will have a recession in the next ten years? What about natural disasters or increased military conflicts? Every responsible adult has some sort of rainy day fund built into their financial plans. Where have you planned for rainy days in your proposed budgets?


Lead the way on shared sacrifice: The only way that our nation will get out of this financial mess is with shared sacrifice. Real and perceived. Most reasonable and knowledgable people realize that increased revenue must be part of the solution to our deficit problem. The deficit is too big to solve with cuts alone. Lead the way in identifying revenue opportunities that are the most supportive of economic growth (or that do the least damage). This is critically important for both practical and political reasons. People are willing to sacrifice if everyone is pitching in. I see five obvious revenue opportunities that show shared sacrifice:

1) Means testing for Social Security: People like me should not see a dime. I would not be happy, but we must all do our part.

2) Establish means based deductibles for Medicare: Once again, I should be expected to pay more.

3) Establish very high tax rates for inheritance. Inherited wealth is like winning the lottery and it should be taxed accordingly. It is far more important we leave our children with a country on firm financial ground and the opportunity for them to succeed than to leave them with lottery winnings.

4) Establish progressive tax rates for capital gains and dividends. The reason that the most wealthy Americans have lower tax rates than the high income working Americans is that they get to pay low taxes on their capital gains. We need to make this far more equitable.

5) Revamp the tax code: The tax code creates tremendous economic inefficiencies by distorting the financial impact of our actions. Cut the deductions and the gimmicks and then lower the rates and you will get more revenue and increased economic activity.

Lastly, lead the way on trusting the American people. Spend your time educating about the realities of our financial mess. Explain the Laffer curve. Show the realities of our unfunded liabilities. Be the party that tells the truth and has the courage to suggest that we must make sacrifices today for the benefit of our children. If you show real leadership, you will be given the opportunity to capture the White House and the Senate. Keep in mind, that if you don't lead, Obamacare goes into affect and pushes us over the deficit cliff and there is almost no way for us to give our children the opportunity that our generation had.

Jim Sherriff
Austin, TX

The liberal media loves to link being conservative with being violent

The Norway attacks were atrocious. A single mad-man created such havoc and mayhem. My thoughts and prayers go to my friends in the Oslo area.

But this article is an affront to the vast majority of those on the political right. It is typical of the type of liberal media hate speech against those that believe in smaller government, fewer taxes, right to free speech, right to own a firearm and managed immigration. Here are some of the expressions they use with glee: “right-wing fundamental Christian”, “right-wing extremist”, “hate speech”, “rightist extremism”. And of course the author advocates the restriction of what non-liberals can say and to whom and how they criticize the left.

This writer, and the NY Times in general, love the opportunity to paint those that believe in less government (generally referred to as the right) as “far-right” thugs. This killer was a psychopathic criminal. And we don’t really know what his views were other than being anti-immigrant.

I go back to my earlier post that the left-right descriptors are a very poor way to divide the political spectrum. http://getbackjack.blogspot.com/2011/06/what-does-it-mean-to-be-far-left-or-far.html

But the liberal media loves to link being on the right with advocating violence. And we have to fight back (peacefully) to set this record straight.

Is there a difference between Socialism and Communism?

Wikipeida defines Socialism as: “an economic system in which the means of production are publicly or commonly owned and controlled cooperatively, or a political philosophy advocating such a system”.

Wikipedeia defines Communism as: “ a sociopolitical movement that aims for a classless and stateless society structured upon common ownership of the means of production, free access to articles of consumption, and the end of wage labor and private property in the means of production and real estate.”

As a practical matter, Communist countries have been more totalitarian than European Socialist countries. But this may be the result of a small sample size rather than a fundamental difference.

In US politics, describing Obama as a Socialist is absolutely accepted by the GOP (and elicits little push back from the left). But calling him a Communist is viewed as “over the top”.

In Socialism and Communism the “means of production are publicly or commonly owned” (think US banks, Government Motors, NASA, public school, Midicare, Obamacare, Social Security, and flood insurance).

Private property in all these cases tends to be taken over by the state.
So is Obama a Socialist, a Communist, or neither?

Is a welfare state with open borders sustainable?

Is it a good idea to combine a welfare state with open borders? Milton Friedman the famous libertarian economist suggested that the US could benefit from an open border policy (he later modified this view). But he assumed that we would not hand out benefits to new immigrants at the rate we give them to existing citizens.

The left is a strong advocate of an open US border that allows any immigrant to cross into the US and become a citizen (and of course vote for them). They also happen to be an advocate of a strong safety net (code for welfare state).

So a welfare state (with public housing, aid for dependent children, state and federal disability insurance, old age pensions, unemployment insurance, school breakfast, lunch and dinner programs, public health insurance, public dental programs and public education) is one thing if the population is stable. But how expensive would it be if we were once the richest country in the world and then opened our borders to anyone that wanted to cross (legally or not)?

The curse of the major league baseball union

I am pro-baseball and anti-union. And major league baseball provides two examples of unions at their worst.

Curt Flood filed an antitrust lawsuit against major league baseball in 1970 because his team, the Cardinals, had exercised their unilateral right to trade him. They traded him to Philadelphia, a perennial loser at the time. When no active player testified on Flood’s behalf and the players union gave him luke-warm support he lost at the US Supreme Court (which for some reason sustained baseball’s continued exemption from the Sherman Anti-Trust Act).

The next major league baseball union boner was the player association’s refusal to allow testing for steroids when performance enhancing drugs grew in use in the late 1980s. The union’s principle was that this was an unreasonable search by ownership. The union’s mistake was that it meant that its players were destined to have to choose between: 1) taking a substance that has a numerous ill health effects, or 2) being at a major competitive disadvantage.

I am against the War on Drugs and think that all drugs should be legalized (including steroids). But I also think that employers should have the right to test for any and all drugs they determine a disadvantage for their business.

Unions are almost always a bad deal for Americans. But for some reason they get treated like motherhood and apple pie rather than the curse they are.