Note to Giuliani and Other Republicans: Tax Cuts Don’t Boost Revenues

A recent Washington Post editorial “Mr. Giuliani and the Tax Fairy,” ridicules Rudolph Giuliani’s often repeated claim that tax cuts actually produce an overall increase of reveune to the government. The editorial quotes Giuliani as saying, “I KNOW THAT reducing taxes produces more revenues. Democrats don’t know that. They don’t believe it.”

The editorial says flatly, “There’s a good reason for (not believing) that. It’s not true. And, no matter how many times Republican politicians caught up in the thrill of supply-side thinking pronounce that tax cuts pay for themselves, they cannot will it to be correct.”

Excerpts from the article:

  • You don’t have to turn to Democrats to refute this point; just read the studies and comments by Republican economists, including many from the Bush administration. President Bush’s Treasury Department, analyzing the “dynamic” effects of making the Bush tax cuts permanent, found that even under favorable assumptions, the positive economic impact would make up for no more than 10 percent of the tax cuts’ cost.
  • “I certainly would not claim that tax cuts pay for themselves,” Edward P. Lazear, chairman of the president’s Council of Economic Advisers, testified last year.
  • N. Gregory Mankiw, another former Council of Economic Advisers head in the Bush White House, concluded in 2005 that cuts on capital gains taxes could generate enough extra growth to recoup half the lost revenue in the long run; cutting taxes on wages could recover just 17 percent of the costs.
  • An analysis conducted by the Congressional Budget Office under the direction of Douglas Holtz-Eakin, who had been an economic adviser in the Bush White House, found that, under the rosiest of scenarios, a 10 percent reduction in the personal income tax rate would generate enough economic growth to replace 22 percent of lost revenue in the first five years and 32 percent in the second five.
  • Mr. Giuliani isn’t the only believer in the tax fairy; numerous Republicans, including the president, have made similarly fanciful claims. But if he were to find himself in the White House and hoping to find that extra revenue he is convinced tax cuts produce, Mr. Giuliani would discover only disappointment under the presidential pillow.

From The Washington Post, December 1, 2007

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More Blogs Are Written In Japanese Than Are Written in English

Interesting article in the Washington Post says that more blogs are written Japanese than are written in English. The article says, “The Japanese have gone blog wild.”

Excerpts from the article:

  • In the past three years, Japanese has been running ahead of or about even with English as the dominant language of blogging. Of all recorded blog postings in the fourth quarter of last year, 37 percent were written in Japanese, 36 percent in English and 8 percent in Chinese.About 130 million people understand Japanese, while about 1.1 billion understand English.
  • By some estimates, as much as 40 percent of Japanese blogging is done on mobile phones, often by commuters staring cross-eyed at tiny screens for hours as they ride the world’s most extensive network of subways and commuter trains.
  • Japan’s conformist culture has embraced a technology that Americans often use for abrasive self-promotion and refashioned it as a soothingly nonconfrontational medium for getting along.
  • Bloggers here shy away from politics and barbed language. They rarely trumpet their expertise. Compared with Americans, Japanese blog at less length, they write anonymously, and they write a whole lot more often.

This article was originally entitled “Japan’s Bloggers: Humble Giants of the Web” and was written by Blaine Harden for Washington Post Foreign Service

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Huckabee Has Radical Views — About Evolution, The Fair Tax and His Personal Faith

It seems clear that some of Huckabee’s ideas do not withstand scrutiny and it seems obvious that some his ideas, if brought to light, would simply be rejected as implausible by a majority of voters. Realclearpolitics, which averages a number of polls, shows that Mike Huckabee is now ahead of Mitt Romney in the Iowa polls 29% to 24%. Huckabee’s dramatic rise in the Iowa polls has brought more attention to his campaign — and to his ideas and comments.

His Personal Faith
Huckabee, an ordained Baptist minister, recently said this about his rise in the Iowa polls: “There’s only one explanation for it, and it’s not a human one. It’s the same power that helped a little boy with two fish and five loaves feed a crowd of five thousand people. That’s the only way that our campaign can be doing what it’s doing. And I’m not being facetious nor am I trying to be trite.”

Michael Barone of U.S. News says that in Iowa Huckabee, “seems to draw most of his support from the roughly 40 percent of caucus goers who are evangelical Protestants. They account for two thirds of his support in the latest ABC/Washington Post poll.” Huckabee’s loaves and fishes belief may help him in Iowa, but it’s hard for me to imagine that America really wants a president who thinks as Huckabee does about personal faith.

The video of Huckabee making this statement is posted on Liberal Values Blog. Ron Chusid who writes for that blog said, “This is nothing new among the Republicans. After all, George Bush believes God chose him to be President and advised him to go to war in Iraq.”

Evolution and Teaching Creationism in Public Schools
Huckabee is an outspoken creationist and feels that the theory of intelligent design should be taught in schools. Yahoo News writes; “Huckabee, at a dinner in Des Moines, told reporters that the theory of intelligent design, whose proponents believe an intelligent cause is the best way to explain some complex and orderly features of the universe, should be taught in schools as one of many viewpoints. ‘I don’t think schools ought to indoctrinate kids to believe one thing or another,’ he said.”

I don’t think America wants a president that feels that teaching authentic science is “indoctrination.”

The Fair Tax
Huckabee advocates doing away with our income tax system — abolishing the IRS — and raising revenue for the government though a national sales tax. This idea has been around for a while and has attracted a core group of avid believers. Some avid “fair tax” believers are probably in Iowa and are supporting Huckabee. But the fair tax is really a nutty idea that cannot withstand any reasonable scrutiny.

The Wall Street Journal calls the fair tax “the most radical reform imaginable” in an article entitled, “The Huckabee Contradiction.” Excerpts from the article:

  • The fair tax has been knocking around GOP precincts for years and has been heavily promoted by Texas millionaire Leo Linbeck, among others. We’ve heard their pitch in our offices and admire their passion. Their concept is to junk the federal tax code — payroll, income, corporate, Social Security, everything — and substitute a 23% national retail sales tax on nearly all goods and services. But while proponents use that 23% figure as an easier political sell, the rate is closer to 30% when it’s calculated like any other sales tax, with the levy on top of the price. State sales levies would go on top of that.
  • The political risk, given the nature of government, is that we’d end up with both an income tax and a national sales tax. Europe, here we come.
  • Mr. Huckabee has latched onto the fair tax in part to show his antitax bona fides — which is necessary given his mixed tax and spending record during his decade in Little Rock. The Club for Growth has documented that record, with prejudice.
  • One problem with a national sales tax is that its rate would have to be very high to raise enough money to fund the government. A rate of 30%, or even 23%, is high enough to invite its own major enforcement problems, so the tax police would still be very much with us.
  • As a political matter, the fair tax would offer a bull’s-eye for Democrats, who would love to run against a plan that would instantly make most purchases 30% more expensive. Though the fair tax includes a complicated rebate system to shield the working poor, a levy on consumption would nonetheless hit hard the young, middle-income families that Mr. Huckabee is courting. It would also tax medical services and home prices, sure to be flashpoints this election season in particular.
  • In 2004, Democrats came from nowhere to nearly beat South Carolina Senator Jim DeMint by pounding his support for the fair tax. His opponent said it would raise taxes on 95% of state residents, and Mr. DeMint had to disavow his support. In the American system, such a radical change as the fair tax is possible only in a crisis, and we aren’t living in one now.
  • Mr. Huckabee nonetheless writes that “when” his reform is enacted, “it will be like waving a magic wand releasing us from pain and unfairness.” That glib naivete should provide some indication of how seriously the former Governor has thought through the political and policy complications of his biggest idea — and also explain why, until recently, Mr. Huckabee was considered an implausible candidate.

It seems clear that, if Huckabee continues to gain political prominance, his views about his personal faith, about teaching creationism in schools and about the “fair tax” will increasingly come under greater scrutiny. I thinking that the more that is known about Huckabee’s ideas, the more the mainstream will rise in opposition to Huckabee.

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