MITT ROMNEY FINANCE CHAIRMAN: Looks Like A Deal Will Get Done With Taxes Rising On Those Making Over $500K

Mitt Romney National Finance Chair, fund manager, and TV personality Anthony Scaramucci is in DC, and tweets:

image

Meanwhile, from more official sources, there’s a report that Obama is considering blinking on entitlements, further evidence that the real dealmaking has begun.

Please follow Clusterstock on Twitter and Facebook.

Join the conversation about this story »


Read more from source:“Business Insider”

Letting Bush-Era Tax Cuts Expire Won’t Make Tax Reform Any Easier

george w. bush and dick cheney

My great pal Tony Fratto over at Hamilton Place Strategies is talking up the “benefits to allowing my favored Bush income tax rates to expire and return to Clinton-era tax rates for everyone.”

While emphasizing the Clinton-era tax code is “suboptimal,” Fratto — a deputy press secretary to President George W. Bush — thinks a reversion would make it easier to eventually accomplish major tax reform.

Fratto:

The Obama plan of only raising the top two rates on the wealthiest Americans kills any chance of income tax reform. This is important to understand: tax reform was always going to be a long shot.

The forces arrayed against reform are numerous, well-organized, well-financed, dispersed across the country, and are often sympathetic groups: charities, state and local governments, the housing industry, and homeowners, just to name a few.

But tax reform becomes practically and politically impossible if the tax burden is skewed to the top as the Obama plan intends. In fact, the wealthiest Americans will face an even higher top marginal tax rate than under the Clinton years due to the increased Medicare payroll and investment taxes in Obamacare.

Tax reform requires creating winners, and the pool of winners has to come from people paying taxes. Those not paying taxes today have absolutely nothing to gain from tax reform. In fact, if we only raise the top two rates, the only people who would gain from income tax reform would be the wealthy. And we can’t help the wealthy, so…no tax reform.

The Clinton tax rates create a much better basis for tax reform because more Americans will actually be paying taxes and can benefit from reform.

Now let me see if I understand this clever bit of political strategy. In other words, you have to give a critical mass of voters some skin in the game. By raising middle-class income taxes today, you could then cut them tomorrow as part of reform that would lower tax rates (at least for them) and broaden the tax base to create a more efficient, pro-growth tax code.

“Yes, I am scaling back your housing/healthcare/state and local tax break, but I am also lowering your marginal tax rate.”

Now Tony is right that the current makeup of the tax code does make it tough to do CBO-approved, revenue-neutral tax reform, as Mitt Romney found out. But I have some concerns/questions/observations (beyond concerns about a nasty 2013 recession):

1. What if Democrats decide to keep the money with no tax reform? All else equal, letting the Bush tax cuts expire would, according to the CBO, give government a gusher of money, an additional $5.1 trillion over a decade.Tax revenue as a share of GDP would average 20.6% from 2013-2012 vs.18.1% if we keep the Bush tax cuts (or about the post-WWII average).

2. With higher tax revenues, wouldn’t any near- or medium-term pressure to do entitlement reform evaporate? While annual deficits might be lower, the Medicare-Medicaid-Social Security debt bomb would still be ticking, and the longer we wait to act, the more dramatic reform will need to be.

3. If you are looking for middle-class, tax-reform sweetener, what about cutting payroll and investment taxes?

I will continue to think about this …

Please follow Politics on Twitter and Facebook.

Join the conversation about this story »


Read more from source:“Business Insider”

Brooke Mueller Is Back In Rehab For The 19th Time After OD’ing On Adderall—Here’s Today’s Buzz

Brooke Mueller

SEE ALSO: Will Smith needs saving from his son in the first trailer for ‘After Earth’ >

Please follow The Wire on Twitter and Facebook.

Join the conversation about this story »


Read more from source:“Business Insider”

Pacquiao gets Romney pep talk before Marquez bout

LAS VEGAS (Reuters) – Defeated U.S. Republican presidential candidate Mitt Romney gave Manny Pacquiao a brief pep talk before the Filipino’s non-title welterweight bout against Juan Manuel Marquez on Saturday. Romney, who with his wife Ann was a ringside guest of Nevada State Athletic Commission chairman Bill Brady, visited Pacquiao in his dressing room during one of the fights on the undercard at the MGM Grand Garden Arena. “I wish you good luck tonight,” a smiling Romney said in front of television cameras to Pacquiao, who has won world titles in an unprecedented eight weight divisions. …
Read more from source:\”Yahoo\”

Boxing-Pacquiao gets Romney pep talk before Marquez bout

LAS VEGAS, Dec 8 (Reuters) – Defeated U.S. Republican presidential candidate Mitt Romney gave Manny Pacquiao a brief pep talk before the Filipino’s non-title welterweight bout against Juan Manuel Marquez on Saturday. Romney, who with his wife Ann was a ringside guest of Nevada State Athletic Commission chairman Bill Brady, visited Pacquiao in his dressing room during one of the fights on the undercard at the MGM Grand Garden Arena. …
Read more from source:\”Yahoo\”

USDA Chief: Rural America Is Becoming Less Relevant

farm, barn, corn field, Iowa, rural

Agriculture Secretary Tom Vilsack has some harsh words for rural America: It’s “becoming less and less relevant,” he says.

A month after an election that Democrats won even as rural parts of the country voted overwhelmingly Republican, the former Democratic governor of Iowa told farm belt leaders this past week that he’s frustrated with their internecine squabbles and says they need to be more strategic in picking their political fights.

“It’s time for us to have an adult conversation with folks in rural America,” Vilsack said in a speech at a forum sponsored by the Farm Journal. “It’s time for a different thought process here, in my view.”

He said rural America’s biggest assets — the food supply, recreational areas and energy, for example — can be overlooked by people elsewhere as the U.S. population shifts more to cities, their suburbs and exurbs.

“Why is it that we don’t have a farm bill?” Vilsack said. “It isn’t just the differences of policy. It’s the fact that rural America with a shrinking population is becoming less and less relevant to the politics of this country, and we had better recognize that and we better begin to reverse it.”

For the first time in recent memory, farm-state lawmakers were not able to push a farm bill through Congress in an election year, evidence of lost clout in farm states.

The Agriculture Department says about 50 percent of rural counties have lost population in the past four years and poverty rates are higher there than in metropolitan areas, despite the booming agricultural economy.

Exit polls conducted for The Associated Press and television networks found that rural voters accounted for just 14 percent of the turnout in last month’s election, with 61 percent of them supporting Republican Mitt Romney and 37 percent backing President Barack Obama. Two-thirds of those rural voters said the government is doing too many things better left to businesses and individuals.

Vilsack criticized farmers who have embraced wedge issues such as regulation, citing the uproar over the idea that the Environmental Protection Agency was going to start regulating farm dust after the Obama administration said repeatedly it had no so such intention.

In his Washington speech, he also cited criticism of a proposed Labor Department regulation, later dropped, that was intended to keep younger children away from the most dangerous farm jobs, and criticism of egg producers for dealing with the Humane Society on increasing the space that hens have in their coops. Livestock producers fearing they will be the next target of animal rights advocates have tried to undo that agreement.

“We need a proactive message, not a reactive message,” Vilsack said. “How are you going to encourage young people to want to be involved in rural America or farming if you don’t have a proactive message? Because you are competing against the world now.”

John Weber, a pork producer in Dysart, Iowa, said Friday that farmers have to defend their industries against policies they see as unfair. He said there is great concern among pork producers that animal welfare groups are using unfair tactics and may hurt their business.

“Our role is to defend our producers and our industry in what we feel are issues important to us,” he said.

Weber agreed, though, that rural America is declining in influence. He said he is concerned that there are not enough lawmakers from rural areas and complained that Congress doesn’t understand farm issues. He added that the farm industry needs to communicate better with consumers.

“There’s a huge communication gap” between farmers and the food-eating public, he said.

Vilsack, who has made the revitalization of rural America a priority, encouraged farmers to embrace new kinds of markets, work to promote global exports and replace a “preservation mindset with a growth mindset.” He said they also need to embrace diversity because it is an issue important to young people who are leaving rural areas.

“We’ve got something to market here,” he said. “We’ve got something to be proactive about. Let’s spend our time and our resources and our energy doing that and I think if we do we’re going to have a lot of young people who want to be part of that future.”

___

AP Director of Polling Jennifer Agiesta contributed to this report.

___

Follow Mary Clare Jalonick on Twitter at http://twitter.com/mcjalonick

Copyright (2012) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Associated Press text, photo, graphic, audio and/or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. Neither these AP materials nor any portion thereof may be stored in a computer except for personal and non-commercial use. Users may not download or reproduce a substantial portion of the AP material found on this web site. AP will not be held liable for any delays, inaccuracies, errors or omissions therefrom or in the transmission or delivery of all or any part thereof or for any damages arising from any of the foregoing.

Please follow Business Insider on Twitter and Facebook.

Join the conversation about this story »


Read more from source:“Business Insider”

The New York Times Finally Admits Reaganomics Worked

Ronald Reagan

Here’s the heart of the big New York Times story on taxes:

Most Americans in 2010 paid far less in total taxes — federal, state and local — than they would have paid 30 years ago.

According to an analysis by The New York Times, the combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980.

Households earning more than $200,000 benefited from the largest percentage declines in total taxation as a share of income. Middle-income households benefited, too.

More than 85 percent of households with earnings above $25,000 paid less in total taxes than comparable households in 1980.

Lower-income households, however, saved little or nothing.

Many pay no federal income taxes, but they do pay a range of other levies, like federal payroll taxes, state sales taxes and local property taxes.

Only about half of taxpaying households with incomes below $25,000 paid less in 2010.

Image Credit: The New York Times

Image Credit: The New York Times

1. Now some people, like Business Insider’s Henry Blodget, and former White House economist Jared Bernstein, thinks the data make the case for tax hikes. Maybe I’m crazy, but I think the reduction in the tax burden — staring with the Reagan tax cuts — has been a huge competitive advantage for the U.S.  

We should keep that edge. Check out these numbers. In 1981, France’s per capita GDP was 81% of U.S. per capita GDP, Germany’s 83%, Italy’s 81%, Britain’s 69%.

In 2010, France’s per capita GDP was 73% of U.S. per capita GDP (down 8 points), Germany’s 81% (down 2 points), Italy’s  68% (down 12 points), and Britain’s 76% (up 7 points).

Old Europe rapidly caught up to American wealth from 1960-1981. But in the two decades after that, the Great Closing stopped or reversed as America got its policy house in order. Tax cuts. Deregulation.

France, Germany, and Italy went backward vs the much larger U.S. Britain, thanks to the Thatcher Revolution, eventually shook off the 1970s. Anyway, rather giving away our tax advantage, we should reform the tax code so that it is even more pro-growth and pro-family.

2.  As the NYT put it, “Congress cut federal taxation at every income level over the last 30 years.” But liberals keeping telling me that only the rich get tax cuts!

Anyway, here’s an interesting statistic: Federal tax revenue as a share of GDP from 1954 through 1980 averaged 17.8%, while from 1981 through 2007, it averaged 18.1%. Lower taxes but more revenue. Hmmm ….

3. The NYT does point out how payroll taxes have risen, which especially affects middle-class households:

More evidence for the need to address tax relief to middle-income families whether through an enlarged child credit that could be applied to payroll taxes or reducing them on a per child basis.

4. Another bit: “Economists agree that taxes on business are passed on to investors, reducing profits, and to workers, reducing wages. Upper-income households bear the brunt of these taxes, and corporate tax collections have fallen sharply.” That is right. Taxes matter.

Funny, the NYT never mentioned this widely known economic fact when Mitt Romney was attacked for saying “Corporations are people.”

Please follow Politics on Twitter and Facebook.

Join the conversation about this story »


Read more from source:“Business Insider”