Michelle The Economists
Michelle Bachmann has toned down her campaign rhetoric on social issues. (Apparently for the time being, no long term promises.) Apparently once she tested voters reactions outside Iowa, she found people had other interests they considered far more relevant. Surprise, surprise.
Michelle donned her economic sage’s uniform and pronounced she would get jobs growing in just one economic quarter. How would she do it? Well, of course, by cutting taxes.
Michelle promised to cut corporate taxes, allow corporation to repatriate foreign earnings tax-free, eliminate capital gains and estate taxes. Bang, once accomplished jobs would flood back to unemployed Americans. Why has not anyone else thought of that?
Actually these four cuts are standard GOP fair. Don’t you remember the corporate tax slight of hand? The GOP shouts that US corporations pay the highest corporate tax in the world – 35%. Truth, the average corporate tax is about 10% once all the loopholes and exemptions are taken into account.
Repatriating foreign earnings has a recent track record. In 2005, under similar GOP promises of jobs if a tax holiday would be placed upon overseas earnings, the results were that corporations increased dividends and bought back their own stock. Need I say, no jobs were created.
Capital gains is another chestnut. The GOP argument is more money will be invested and greater chance (new start up companies) will be taken if there were no capital gains. Jobs will result, the GOP says. Low capital gains taxes for corporate leaders’ stock options and stock grants has already lead to widespread out of control increases in corporate remuneration. The near collapse of the world financial sector in 2008 has been linked to the seductive effect of quick capital gains. I see no reason why suddenly this will be a good idea.
Estate tax elimination is another dumb idea. The real issue is simply how much of an exemption is appropriate for wealthy Americans. The son or daughter who inherits the family farm and must sell the farm because they can’t afford the taxes seems to me inappropriate. Whereas Warren Buffet (who probably already has insulated his billions from estate taxes), might not need unlimited exemptions.
Over and above all, Bachmann has voted not to increase the debt ceiling. With these types of tax cuts, where are the offsets coming from? If you believe there will be jobs, I have bridge for you to buy too.
This entry was posted on August 28, 2011 at 1:22 pm and is filed under Barack Obama, Democratic Party, Politics, Republican Party. You can subscribe via RSS 2.0 feed to this post's comments.
Tags: 2012 election, corporate tax rate, deficit, estate tax, gop, michele bachmann, warren buffett
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August 29, 2011 at 1:36 am
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