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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (44650)	8/3/2010 7:01:00 PM
From: TimF	1 Recommendation Read Replies (2) \| Respond to of 71588

Tax Cut Myth Busting, Round 2 Bill Gale’s discussion of the five myths about the Bush tax cuts was an unusually slanted piece from a normally straight-shooting liberal economist. With respect to an old friend, a little further myth busting is called for. Tax Relief as Stimulus Gale refers to the proposition that extending the tax relief “would be a good way to stimulate the economy” as a myth. In doing so, he conveniently erects a bit of a straw man. Continuing current policy cannot add much to stimulus except by erasing a debilitating source of uncertainty regarding tax policy. The real issue is how much damage a tax hike would inflict on a weak economy. To shed light on this question Gale returns to the same flawed approach used by the Administration to explain how government debt creates jobs. All wrapped up in questions of who spends the biggest share of income and who is most likely to save, he manages to ignore the fact that we have this little thing called a financial sector that exists primarily to intermediate savings into investment. Would allowing the tax relief to expire sink the economy into depression? No. Will it hurt? Yes. Is it smart when unemployment is hovering around 10 percent? Are you crazy? Slamming Small Businesses His second myth is the nostrum about small businesses facing tax rates. The superficial argument Gale offers suggests higher tax rates are largely irrelevant to small businesses. He argues that “less than 2 percent of tax returns reporting small business income” would be subject to the higher taxes. He’s right, but there’s a lot more to the story than he admits. Last year, I reported “small business income” earned for writing a couple articles for outside publication. I suspect Gale did likewise. That means our tax returns reported “small business income.” A great many Americans earn a few bucks on the side. Much of that is small business income. And that means we have millions of tax returns earning small business income. But we’re not really small businesses. We don’t hire people. We don’t offer services widely. True small businesses have employees. They invest in machinery. They offer goods and services widely. And the successful ones earn significant sums to compensate for the risks of running the business, earning a return on capital invested, and to grow. And because they earn significant sums, successful small businesses earn the bulk of small business income. So, while only a small portion of taxpayers reporting small business income would face Obama’s higher rates, those facing the higher rates are the successful, growing, and hiring small businesses the economy needs to grow. That’s a big part of the reason allowing the tax relief to expire would hurt the economy. Effects on Long-Term Growth Tax relief, such as lower top income tax rates and lower rates on dividends and capital gains, helps long-term growth by encouraging work, investing, and saving. Gale agrees! Or, as he puts it, “this isn’t the whole story.” Then he argues that the deficit spending that occurs because spending outstrips revenues leads to higher interest rates. This is a fascinating argument for any liberal to make while defending Obama’s serial trillion dollar deficits. Essentially, debt due to tax relief is bad; debt due to spending is good. You’re serious, right? Bush Tax Cuts and the Deficits Many commentators have tried to argue that the Bush tax cuts caused the deficits of the past decade, and are primarily responsible for the deficits projected for this decade. Gale neatly dispatches both myths. Enough said. Tax Relief, Entitlements, and the Long Term As Gale notes, “the deficits we face over the next decade reflect a fundamental imbalance between spending and revenue.” He’s right, but the next decade isn’t the long term and tax relief isn’t the cause of the imbalance. While revenues are projected by Obama under current policy to return quickly to historical levels, spending does not, hence the fundamental imbalance we now face. The issue can only be described as partly attributable to the tax relief if one first asserts that the higher spending is both necessary and appropriate, in which case higher taxes would follow. In the long run, we add to this fundamental imbalance the consequences of unaffordable entitlement programs that no tax hike can remedy. Rather than throw even more chaff into the debate, Obama and friends could state their case simply and affirmatively and let the taxpayers decide what they want. Doing so might have run something like this: The tax cuts should be allowed to expire because government spending has and will continue to outstrip revenues and that spending is necessary and appropriate. True, the tax relief will hurt the economy in the short-run and the long run, but we’re not sure by how much and in my view that is a cost and risk worth bearing. Further, the rich earn too much money in this country and Obama was right when he said we need to spread the wealth around a bit. Call it Robin Hood if you like, but this is my vision for America. Had Gale said something like this, I would disagree with him strongly. But I would respect his forthrightness in stating his views and we could then have an honest discussion sans myths. blog.heritage.org

To: Peter Dierks who wrote (44650)	8/4/2010 8:20:40 AM
From: DuckTapeSunroof	Respond to of 71588

Mike's 'liberty' cry for Muslims Boosts worship site after 'landmark' ruling By SALLY GOLDENBERG Last Updated: 5:25 AM, August 4, 2010 Posted: 3:57 AM, August 4, 2010 Read more: nypost.com With the Statue of Liberty as a backdrop, an impassioned Mayor Bloomberg yesterday supported the development of a mosque near Ground Zero and chastised opponents for what he said was trampling on religious freedom. "I believe that this is an important test of the separation of church and state -- as important a test as we may see in our lifetimes -- and it is critically important that we get it right," the mayor said in remarks on Governors Island -- chosen by the mayor as a symbol of religious freedom in America. "To cave to popular sentiment would be to hand a victory to the terrorists, and we should not stand for that." HALLOWED GROUND: Surrounded by religious leaders and City Council Speaker Christine Quinn, Mayor Bloomberg speaks yesterday with Lady Liberty as a backdrop. The mayor spoke shortly after the Landmarks Preservation Commission yesterday morning paved the way for the construction of the mosque on Park Place -- voting 9-0 vote not to grant landmark status to the 152-year-old building that is to be demolished for the project. The planned building, called Park 51, is slated to house a community center in addition to the house of worship. The commission's vote signifies the clearing of a major hurdle in the controversial plan. Emotional at times, Bloomberg described Governors Island as "where the seeds of religious tolerance were first planted" as a home to the earliest settlers in New Amsterdam. "We come to state as strongly as ever -- this is the freest city in the world. That's what makes New York special and different and strong. Our doors are open to everyone," the mayor said. "Of all our precious freedoms, the most important may be the freedom to worship as we wish and it is a freedom that even here, in a city that is rooted in Dutch tolerance, was hard won over many years." Standing with 10 clergy members of various faiths and City Council Speaker Christine Quinn, Bloomberg spoke of religious obstacles faced by Quakers, Jews and Catholics who fought to practice their faiths centuries ago. "The simple fact is this building is private property and the owners have a right to use the building as a house of worship and the government has no right whatsoever to deny that right," Bloomberg said of the proposed mosque. "Lost in the heat of the debate has been a basic question: Should government attempt to deny private citizens the right to build a house of worship on private property based on their particular religion? "That may happen in other countries but we should never allow it to happen here. This nation was founded on the principle that the government must never choose between religions or favor one over another." He also offered praise to the city's Muslims, saying they too were among the innocents killed on Sept. 11, 2001, and they too opposed the terrorist attacks. "Muslims are as much a part of our city and our country as a people of any faith, and they're as welcome to worship in lower Manhattan as any other group," Bloomberg said. "We would betray our values and play into our enemies' hands if we were to treat Muslims differently than anyone else." The mayor said opposing the planned mosque does not honor the lives of first responders and others killed in the World Trade Center collapse. Bloomberg took questions from reporters after his speech. When asked about the Anti-Defamation League's resistance to the project, he expressed surprise. "They have a right to their opinion [but] I find it out of character with their stated mission -- totally out of character, and I have no idea what possessed them to reach that conclusion," he said.