Taxes and Used Car Dealers

To support their argument against President Obama's calls additional revenue to solve the budget deficit, Republicans have argued that the U.S. has one of the highest corporate tax rates in the world. Democrats, on the other hand, have pointed out that companies and wealthy Americans are paying historically low levels of taxes. Paradoxically, both parties are right. To understand why, you need to think of the U.S. tax code like code like a user car dealership. Sticker prices are usually high at used car dealerships, but hardly anyone ever pays sticker price. The same is true with federal tax rates, especially with corporate taxes. Although the corporate federal tax rate in America is high (too high in my view), most companies take advantage of a plethora of loopholes and deductions that result in a much lower actual corporate tax. The Government Accountability Office released a study in 2008 that revealed 55% of U.S. companies paid no federal income taxes during at least one year in the seven-year period covered by the study. This makes our tax code look like a proverbial block of Swiss cheese, as the wealthiest companies and individuals are able to become savvy at tax avoidance by hiring the best accountants and tax attorneys who can find loopholes. The U.S. corporate tax rate needs to be competitive with the rest of the world. However, most countries do not have the kind of loophole-ridden tax system we have. Simply stated, we can help solve the massive budget deficit by raising revenue while actually lowering the corporate tax rate. This means we need to close the loopholes, end the subsidies (corporate welfare) and make the tax code fairer and the tax environment more predictable for businesses. The current Administration has supported this, but to date, the Tea Party element of the House Republican caucus has opposed anything that would increase the amount of revenue coming into the Treasury. Hopefully saner heads will prevail.

Presidents and Vacation

I meant to post this in August while Congress was on recess and President Obama was on vacation. It's not exactly a timely topic anymore, but I think it still warrants mentioning:

This August was a crazy time for American politics. The debt ceiling debate (or debacle) along with the "compromise" bill where the Democrats essentially gave in to nearly all of the GOP's demands, followed by the stock market's precipitous drop and frightening volatility have resulted in hysteria among some of the political talking heads. One thing that annoyed me a bit was constant criticism of President Obama for taking a vacation after the debt ceiling crisis was finally solved. It seems to me that every time Barack Obama and his family take some vacation time, they are subject to relentless attacks by the right-wing media. Conservative pundits on FOX News and elsewhere assaulted the President for taking vacation during such distressing economic times. Of course after the debt ceiling compromise bill was passed, Congress took a three-week recess, and there isn't much the President can do about the economy without Congress. Even if the President recalled Congress, everyone should know by now that there is little chance the two parties could come to an agreement on measures to stimulate economic growth and fight unemployment anytime soon.

In hearing all of this criticism of the President and his vacation-taking, I wondered how he compared with his predecessors regarding the amount of vacation days he's taken. Fortunately, there are folks in the media who have nothing better to do than track Presidential vacation days.

CBS Radio's Mark Knoller observed the following in August:

So far, President Obama has taken 61 vacation days after 31 months in office. At this point in their presidencies, George W. Bush had spent 180 days at his ranch where his staff often joined him for meetings. And Ronald Reagan had taken 112 vacation days at his ranch. Among recent presidents, Bill Clinton took the least time off — 28 days.

Would FOX News care to publicize that comparison during their prime time shows?

Where Did All That Debt Come From?

I've intended since the spring to write about our country's current fiscal situation and how we arrived here. For months, Congressional Republicans have been asserting that our federal government does not have a revenue problem, it has a spending problem, and have argued for draconian spending cuts largely aimed at programs that benefit the middle class. And President Obama and many Democrats have largely conceded to the GOP on the issue, allowing them frame the debate about our economic woes as being the result of a large federal debt and ongoing budget deficit. Polling shows that a large majority of Americans blame our country's budget woes on wasteful government spending. However, it is critical to examine our country's fiscal policy during the past decade, to fully understand why our deficit and debt have become so large. The data show that the current budget deficit is primarily the result of 3 factors:

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Warren Buffet Paid a Lower Tax Rate Than His Secretary in 2010

In today's New York Times, billionaire investor Warren Buffett pointed out that he pays a lower federal income tax rate than his staff. His effective tax rate last year? 17.4 percent! His is not a unique case. Our tax code is written so that the wealthiest have the best tax breaks. As the President has said, everyone needs to pay their fair share. And since debt reduction is the pressing issue on politicians' minds in Washington, I hope that the new 'Super Congress' takes a balanced approach that includes significant revenue increases when they look for ways to improve our nation's budgetary problems. I plan on writing more about this and the recent debt ceiling debate - there is a lot more to the subject- but I was impressed by Buffett's Op-Ed.

Buffett states, "my friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice."

Reagan a Supporter of Collective Bargaining Rights

It has seemed apparent for some time that Ronald Reagan, the greatest icon of the conservative movement, would not be conservative enough for today's Republican Party. Attempts by Republicans in several state legislatures across the country to eliminate collective bargaining rights of public employee unions has truly been explosive-- the equivalent of the "nuclear option" in politics. Contrary to claims by Republicans such as Governor Scott Walker of Wisconsin, that these moves were made simply to help fight budget deficits, these attempts are nothing more than a power grab.

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Thanks for the Invite Mr. Speaker!



No, Speaker Boehner did not invite me out for drinks in his corporate box at this weekend's Phoenix Open.  But he was kind enough to let me snap off this picture.  With politicking never ceasing, he shook every outstretched hand and stood somewhat attentive for every iPhone camera.

Although Speaker Boehner and I view the political landscape very differently, I do enjoy seeing our leadership out from behind the constructed backdrop created from the Nation's partisan divide.  Enjoy the Open Mr. Speaker -- tomorrow you are back in Washington trying to explain how cutting $100B in discretionary spending impacts the $3.4T budget, how repealing the healthcare bill improves our society, and how crazy lady Michele Bachmann and the pony express can help the Republican Party.

A Gun Law Even Dick Cheney Can Support

The gunman in the Tucson shooting rampage that killed six people and injured many others, including Rep. Gabrielle Giffords, acquired his handgun legally, despite many warning signs to those around him that he was a very mentally unstable young man. In executing his plot, Jared Loughner used a Glock 19 with a high-capacity magazine. The purpose of such a magazine is to enable a shooter to fire a high number of rounds in a short period-- to allow for maximum rapid fire without reloading. Loughner's high-capacity magazine held twice as many rounds as a normal Glock magazine (30 rounds rather than 15). Recall that he was not neutralized by bystanders until he had emptied his first magazine and attempted to reload. Think of how things might have been different had Loughner only had a normal-sized magazine with 15 rounds. How many fewer people would have been killed or injured? This type of high-capacity magazine was illegal prior to the 2004 expiration of the assault weapons ban. Had Congress and the prior administration acted in 2004 to extend the ban, there would have almost definitely been fewer casualties in Tucson in 2011.

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The Stimulus Act Bargain

A point was made a few months ago about the Recovery and Reinvestment Act of 2009 (a.k.a. Obama's economic stimulus plan) that really made a lot of sense to me. Most of us probably recall the tragic I-35 bridge collapse in Minneapolis in 2007. The cause of the bridge was due to a faulty design-- the use of under-sized gusset plates-- and an excessive amount of concrete overloading the bridge. The Federal Highway Administration advised shortly thereafter that there were about 700 other U.S. bridges of similar construction and asked states to inspect them. The Society of Civil Engineers recently gave our U.S. infrastructure an overall "D" grade, indicating that in many cases, our roads, bridges, and other vital infrastructure are in dire need of upgrades. I fear we will have more I-35 bridge scenarios in the future because our current national political dialogue is overly focused on deficits, repealing the health care bill (which will increase the deficit), and other distractions.

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Let's Tone it Down Several Notches

So far, it appears that the person who targeted Democratic Rep. Gabrielle Giffords of Arizona for assassination, in Saturday's shooting rampage that left 6 people dead and many others seriously wounded, was not directly inspired by the virulent and violent political rhetoric that has been dominating the public discourse over the past 2 years and beyond. And in this post, I am not trying to assign blame for the shooting rampage to anyone aside from the deranged, homicidal gunman, Jared Lee Loughner. But this national tragedy has provided an opportunity for us to reflect on the type of political conversation we engage in both in public and in private. Last March, I posted about some of the recent violence and violent rhetoric. In the aftermath of the passage of the health care reform bill, many prominent opponents of the bill used inappropriate and irresponsible rhetoric that included implicit violent and hateful messages.

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Are We Headed for Single Payer Health Care?

It's been interesting to listen to the debate rage over what will happen to the individual health insurance mandate in President Obama's health care reform bill as the issue moves its way up through federal courts. The mandate was recently ruled unconstitutional by one (Bush-appointed) federal judge in Virginia, but was ruled constitutional by a couple of other federal judges. It seems that most pundits agree that this issue is headed for the Supreme Court.

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