CHALLENGE
THE PREMISE

Newsmakers

ARCHIVE - NOVEMBER 2015

Issues, News & Views

Who will be the
2016 candidates
for President of
the United States?


Republicans


DONALD TRUMP??

Donald Trump has come out
of nowhere and stolen the
show. He seems to have
captured the zeitgeist, the
spirit of the times. Can it last?



Who, from among this
strong, diverse field , will
emerge victorious to return
the GOP to the White
House?

COMPETITORS
With the inept Obama
Administration in its final
days, one would have
expected that experienced
governors with a record
of accomplishment would
dominate the Race 2 Replace
but outsiders and novices
Trump, Carson and Fiorina
are in the hunt! Seasoned
executives for sure, but
not the ones the beltway
had in mind!


Democrats


BERNIE SANDERS??

The creaky, rusty Clinton
machine grinds slowly
onward, wayward, relying
solely on muscle memory
for movement. Will
Democrats suddenly rise
from their slumber to the
realization she cannot win a
General Election?



Is Hillary a foregone
conclusion, or will
someone else swoop in and
steal the show?


COMPETITORS
Folks on the right can barely
contain their joy at the
prospect of a Clinton
candidacy. Shouldn't that
give pause to the Democrats?
Biden and Warren are both
better candidates and better
Democrats than Clinton, but
aren't even in the race. And
then there are O'Malley and
Sanders, again, both better
Democrats and better
candidates. Yet the Dems
seem intent on following
Clinton in a lemming-like
charge over the cliff.

MITT ROMNEY WAS WRONG

2015/11/20 - Back on August 11, 2011 Mitt Romney famously claimed that corporations are people too. Well, not really. But though they are not people, by the same token they are also much more than just artificial legal constructs.

From a public policy perspective, the best way to think of a corporation is as a purpose-driven pool of assets. Think in terms of an IRA - you put money into the pool, the assets earn a return, and in the future you are able to pull far more out of it than you originally contributed.

A corporation is no different - investors contribute money to the pool with the expectation of receiving dividends and capital appreciation far above what they originally invested.

But, while the money is in that pool, amazing things happen. The business makes products and provides services that people genuinely want. Customers voluntarily buy the products and services expecting that the benefits will outweigh the cost of obtaining those benefits - for example, that your new iPad will provide enjoyment greater than your labors to earn the money to buy it. By creating this consumer surplus, a business enhances the quality of life of its customers.

But businesses do other amazing things as well - in order to produce that consumer surplus, they hire employees and pay them wages. It is good for people to engage in constructive activities - providing goods and services that a community requires - and it is even better to get paid to do so! Getting paid to contribute to your community - what a great system!

But that's not the end of it. As the productive cycle continues to loop, businesses continuously buy goods and services from other businesses, thus helping them to hire employees and pay wages, and also helping them to create the consumer surplus that raises living standards.

But the benefits don't stop there either. The profit motive promotes conservation, it incentivizes businesses to consume the fewest societal resources possible in order to limit its costs.

And of course businesses earn profits that can be reinvested in the business to create even more consumer surplus, even more employment and wages. Business activity is a truly virtuous cycle, a goose that lays golden eggs.

So why do we tax business profits? Why do we interfere in the virtuous cycle and diminish it? What exactly is the logical economic case for penalizing business investment? Why not eliminate corporate income taxes?

Real, desperately needed tax reform should treat a business just like an IRA. We should allow the income to accumulate tax-free as long as it remains within the pool, so that those assets can continue to participate int he virtuous cycle. The income should only be taxed in the hands of the recipients when withdrawn from the pool, when it is withdrawn from the virtuous cycle.

Again we ask, why do we tax business profits? The money paid out in taxes would do far more societal good - like paychecks - if it was left in the business, than it does to fund government services. We need to focus public policy on re-igniting private wage and employment growth, instead of suffocating it with high taxes, the high cost of compliance, and the inefficiencies and dislocations caused by tax-effected decision-making.

Some will make the false claim that government revenue will be impaired but that is bogus. First, government will recapture those taxes through the wage and dividend increases caused by the tax cut; second, government spending will decline because employed wage-earning people demand far fewer government services than idle impoverished people do; and third, elimination of the tax also eliminates the bureaucracy of collecting it, thus further cutting government spending.

Art Laffer and Stephen Moore called the corporate income tax "god-awful" today but then offered an equally "god-awful" value-added tax as an alternative?? C'mon Man! How about stopping the insanity and ending these taxes entirely. If you want a job-growth wage-growth high-participation economy then stop taxing employers.

Only Cameroon and Japan have higher corporate tax rates than the US rate of 35%. We propose reducing it by 5% per year over seven years, starting in two years. A sudden abrupt change would be a shock that would cause a number of unpredictable dislocations. On the other hand, a delayed and gradual implementation would not only allow an orderly transformation, but would provide a short term tax windfall as businesses proactively ramp up activity at the current higher rates.

Stop rearranging the deck chairs. Don't even think about wasting taxpayers' money trying to figure out which tax regime is less worse than another. Put an end to all of these "god-awful" business income tax monstrosities. Each one of them is way worse than no tax at all.




Analysis


November 30, 2015 - Today President Obama is in Paris - of all places - in an attempt to deceive us that climate change is the world's most pressing problem, and worse, that we should be focusing our attention and resources to prevent it.

Yes, our President is in Paris right now lecturing anyone who will listent that the weather, and not radical Islamic terrorism, is what we need to worry about.

Saith Obama, as if some kind of priest, enacting a cultish service, "I come here personally as the leader of the world’s biggest economy and second-biggest emitter to say that America not only acknowledges its role in climate change but embraces doing something about it."

Oh no! We have emitted, the greatest sin againt the Climate Change Cult. Woe is us! What can we do? Who will save us?

But fear not we have the great high priest Obama making intercession for us. On our behalf he confesses our role in climate change; and on our behalf he repents, he promises to do something about climate change...

What a great Obama we have.




November 16, 2015 - In the wake of Friday's barbaric, deranged attacks, France has struck back taking out several Daesh targets in Syria.

Good, but... if the French (or US or Russia) knew those Daesh targets in Syria were there for the bombing, why did they wait until after this tragedy to wipe them out, and not try to prevent it? Why are we reactive and not proactive? Where's the sense of purpose, the sense of mission, the sense of urgency?

In the past we have been critical of President Checkthebox's lackadaisical approach to Daesh, and what you see is what we've got for his dithering.

Most people mow their lawns with more conviction than Obama pursues Daesh. If you were wondering when we would get serious about Daesh, I guess that's now. Maybe. It's not like we don't know who Daesh is, or the savagery they are capable of. But dither we do.

President Obama is the personification of a leadership vacuum. He should just resign. It is time for Daesh to take a road trip on the "Highway of Death" and we need a leader who will send them packing.

Obama's demagoguery does not change the fact that defending the free world is not "jingoism" or whatever his insult of the day is - defending the free world is his duty.


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