Category Archives: politics

Tax Deductions

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Progressive-Democrat Vice President and Party Presidential candidate Kamala Harris wants to expand the start-up business tax deduction from $5,000 to $50,000 [sic].

However, in typical Party duplicitous fashion, she gives with one hand and takes away far more with the other. She wants to raise taxes on us citizens and our businesses so much that that deduction increase would disappear in the flood.

  • Increase the corporate income tax rate from 21% to 28%
  • Increase the corporate alternative minimum tax introduced in the Inflation Reduction Act from 15% to 21%
  • Quadruple the stock buyback tax implemented in the Inflation Reduction Act from 1% to 4%
  • Make permanent the excess business loss limitation for pass-through businesses
  • Further limit the deductibility of employee compensation under Section 162(m) [currently limiting public companies’ tax deduction for compensation of covered executives to $1 million per individual]
  • Increase the global intangible low-taxed income tax rate from 10.5% to 21%, calculate the tax on a jurisdiction-by-jurisdiction basis, and revise related rules
  • Repeal the reduced tax rate on foreign-derived intangible income

How about cutting out the intrinsic contradictions of deductions here and tax rate increases there to pay for them? How about, instead, simply lowering tax rates across the board—begin, say, with a rate reduction equal in effect to the sum of all the subsidies and credits—Harris’ latest small business “deduction,” for instance and both Harris’ and Trump’s child tax credit, along with the myriad welfare subsidies?

Let the resultant vast growth in activity in the private economy pay for the tax rate decrease. The Jack Kennedy large tax rate deduction, the Reagan nearly as large tax rate reduction, and the Trump tax cuts all led to economic expansion that produced a net increase in revenues to the Federal government—all those cuts were paid for by the responding expanded economic activity.

But Progressive-Democrats are incapable even of saying the words “tax rate reduction.”

Mistaken “Tradition”

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It is a Federal Reserve “tradition” to not adjust its benchmark interest rates in the final months before an election.

The Federal Reserve has historically left interest rates alone in the months before a presidential election. …
Since 1990 the Fed has cut rates in the final two months of a presidential campaign only three times. Each case shows why rate cutting in the homestretch of the political season is exceptional.

Call it two elections, since two of those three cuts occurred during the same election end game. Still, in these 34 years there are nine Presidential elections. Twice in nine opportunities works out to be a skosh under a quarter of the time, or a skosh over a fifth, depending on one’s perspective. That’s a pretty weak tradition.

More important is this remark by then-Dallas Fed chief Robert McTeer:

[W]e’re within a month of the election…it was conventional wisdom we weren’t supposed to act so close to an election.

Except that a decision to not act is an action itself, and choosing not to act on interest rates when the situation otherwise calls for action has its own influence on an upcoming election.

The Fed should make its interest rate moves when the economic environment says it should, regardless of the politics of the moment. Otherwise, the Fed isn’t acting independently on economics, as its DOC requires it to do, but in active response to politics.

Disingenuous TikTok Arguments

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The law requiring ByteDance to divest TikTok entirely or have TikTok banned from the US is in front of the DC Circuit Court, and there are at least two arguments that TikTok is making that are…misleading.

The first is this one:

Never before has Congress silenced so much speech in a single act.

No speech is being silenced. Only a particular outlet—TikTok—used by the People’s Republic of China intelligence community is being acted against. That outlet would remain available were ByteDance to wholly divest TikTok, which ByteDance and the PRC, on their own initiative, refuse to do. There also are a plethora of speech pathways for precisely the same speech desires besides TikTok. ByteDance’s/PRC’s decision to let TikTok be closed will have no impact on speech.

The second is this one:

Our constitutional tradition leaves no room for the government to stop Petitioners from expressing their ideas through the editor and publisher they have chosen. The government could no more prohibit a freelance journalist from publishing in a magazine of her choice; forbid an actor from working with a particular director; or tell a musician what studio he can record in.

Of course, no one is making any prohibition of this. The decision to leave TikTok available to the freelancer (or any other journalist), the actor, or the musician is entirely in the hands of ByteDance and the PRC government. It’s their decision to refuse to let TikTok be divested that would deny access to TikTok.

“Will No One Rid Us of this Troublesome Candidate?”

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If you see Republicans/Conservatives in a restaurant, do not give them a moment’s peace. Come up in their faces.

Running Conservative politicians out of restaurants.

Extremist MAGA.

Extremist Republicans.

Republicans are semi-fascists.

Murder attempts against Republican Congressmen practicing baseball.

Overt threats against originalist/textualist Supreme Court Justices.

Murder attempts against Supreme Court Justices.

Overt lies about the troublesome candidate—e.g., would sign nationwide abortion ban, would cut Medicare.

Manufactured desire to put blacks back in chains.

Openly false fact “checking.”

He’s a threat to democracy.

The list of these lies and smears and assault-encouraging rhetoric by Progressive-Democratic Party politicians, by the press, by the Left in general goes on and on.

The deliberate attempt to divide Americans from each other and to pit Americans against each other began in earnest with ex-President Barack Obama (D) and his openly expressed contempt for flyover country Americans, and it has been exploded by Progressive-Democrat President Joe Biden and his Vice President and Progressive-Democratic Party Presidential candidate Kamala Harris with their extremist MAGA distortions and abortion lies.

And now we have the second assassination attempt of Republican Presidential candidate Donald Trump.

A second attempt that comes against the background of President Biden and his DHS Secretary Alejandro Mayorkas’ refusal to increase Trump’s Secret Service security after the first attempt.

This is what the Progressive-Democratic Party politicians’ carefully divisive and inflammatory rhetoric has wrought. And will continue to wreak.

These two attempts to murder a political rival, even if they’re only attempts to murder a politician who happens to be a political rival, are reason enough to elect Trump. It’s time to demonstrate to the Left that they cannot dictate to us average Americans who our political candidates will be, much less who we will elect to represent us.

Fed Rate Cut

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The Federal Reserve is at a fork in the road, and a great American philosopher once said that, having arrived at one, it’s necessary to take it. Unfortunately, the Fed is at the wrong fork, so no matter what it does, it’ll be in the longer term counterproductive, even if it’ll near-term benefit stock or bond traders, depending on which fork it takes.

The fork: cut rates tomorrow by a quarter point or a half. Greg Ip favors the latter, without recognizing where the Fed, or he, is.

The case for a bigger cut starts by examining why the Fed’s short-term rate target is now 5.25% to 5.5%, the highest since 2001. The Fed pushed it there last summer because underlying inflation was well above 3% and, with the labor market overheated, the Fed was afraid it would get stuck there. It was willing to cause a recession to prevent that.
Fast forward to today, and some key underlying measures of inflation are below 3%, some within range of the Fed’s 2% target. The labor market is cool, if not actually cold. A recession now serves no useful purpose.

The Fed’s rationalization for boosting its benchmark to 5.25% to 5.5% ignores the fact that ever since the dotcom panic and especially the Panic of 2008, the Fed has artificially suppressed interest rates—all the way to nearly 0% after the Panic, only allowing them to rise slightly off that low. It’s been only in the last couple of years that the Fed has raised its benchmark to its current level. For all of those 20+ years, including the last couple, the Fed has ignored market forces regarding the cost of money (interest rates lenders charge businesses in the latter’s quest for operating capital and capital for other uses) and continued to try to manipulate those forces.

That’s entirely appropriate when our economy is in extremis, as it was immediately after the dotcom bust and again in late 2008 through early 2009. After those two brief periods, though, with those suppressed interest rates, our economy was denied its normal rapid recoveries, with declining real wages, slow growth, and high unemployment that only slowly recovered to pre-Panic (much less to pre-Wuhan Virus Situation) levels. Those re-Wuhan Virus Situation levels, in fact, were the first time our economy was growing soundly, with increasing real wages, even a narrowing wealth gap, since that prior bust.

The fork the Fed should be taking is the decision whether to lower its benchmark rates at all or to stand pat.

With the Fed saying that its target inflation rate is nearly reached (I argue that the difference between current inflation and those 2% is just the noise of normal market fluctuation), it’s time for the Fed to say further that it’s going to leave its benchmarks in their current 5.25%-5.5% range, that it’s going to leave its benchmarks there for the foreseeable future, and that it’s then going to sit down and be quiet.

The current benchmark levels are historically consistent with 2% inflation, albeit it’s a noisy relationship. That noisiness, though, is the normal operation of an open and free market, and it’s time for this instrument of the Federal government to get out of the way of our open and free market. Inflation will bounce around in a range, and interest rates, if left alone, will bounce around commensurately as the two, along with other forces in the market, all work to correct each other back to this rough level.