June 8, 2006

Death Tax Repeal Fails to Advance to the Senate Floor, and Is VERY Far From Passage

Filed under: Economy,Taxes & Government — Tom @ 7:55 pm

The Vote

The vote was 57-41.

The vote was mostly party-line. Alleged Republicans Cryin’ George Voinovich and Lincoln Chapstick, er, Chafee voted against, while four Democrats voted for repeal. Two Democrats who would have been against were not present.

The “Logic”

Both GOP senators claimed (go to second page at linked article) that we can’t afford the losses to the Treasury during a time of high deficits. Someone should show them this post.

The Hypocrisy

This was not as close as it appeared, for this reason:

Interestingly, Evan Bayh, Mary Landrieu, and Ron Wyden voted for full repeal in 2002. Today, they voted against even considering the legislation for some type of reform. Hence they went from supporting a 0 percent estate tax to a 55 percent rate. That’s because this is not whether you support or oppose estate tax repeal. The Dems have actively traded votes to let their vulnerable members up for reelection support the legislation and have other members not up for reelection vote against the legislation, even if they support estate tax repeal/reform. This ensures incumbent protection while also ensuring 60 votes can never be reached.

The above shows that despite what any of them might say, or how they might even vote when the outcome is assured, there is NO legitimate support for death tax repeal on the Democratic side of the article — only political opportunism.

The fact is that death tax repeal is about seven legitimate supporters away from getting through the Senate, and that’s a tall mountain to climb.

Kyl’s Unacceptable Proposed Compromise

The compromise proposed by John Kyl gets off to a good start, but crashes with a thud (at first page of same WaPo link), and in my opinion makes it unacceptable:

Sen. Jon Kyl, R-Ariz., proposed an alternative that would have relieved more estates from taxation by letting an individual’s estate worth $5 million, or a couple’s worth $10 million, escape taxation. That exclusion would increase each year to keep pace with inflation.

Most estates exceeding that size would be taxed at capital gains tax rates. The very largest, when exceeding $30 million, would be taxed at 30 percent.

The last sentence is in my opinion fatal. The 15% cap-gains tax rate is okay by me, but ONLY gains should get taxed, NOT total asset values. 30% is out of control.

The fact some opponents call Kyl’s proposal “tantamount to repeal” shows how out of touch they are with their constituents.
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UPDATE, June 9: The Wall Street Journal is on to the deception on the left side of the aisle in this subscription-only editorial:

But special credit belongs to four Democratic Senators who voted against repeal yesterday after they’d run for office pledging the opposite. They are Evan Bayh of Indiana, who perhaps had in mind Democratic Presidential primary voters, not the home folks who elected him; Mary Landrieu of Louisiana; Mark Pryor of Arkansas; and Ron Wyden of Oregon. These flip-floppers voted not only to retain the tax but to increase it — from zero in 2010 back to 55% in 2011 and forever after.

Mr. Pryor’s Web site says he “supports the permanent repeal of an estate tax.” No word as to when that comes down. Ms. Landrieu and her colleague Maria Cantwell of Washington were so torn on the vote that Senate Minority Leader Harry Reid wouldn’t let them out of his sight until it was over.

….. And an honorary flip-flop award goes to New York’s Hillary Clinton, who during her 2000 Senate campaign declared: “You ought to be able to leave your land and the bulk of your fortunes to your children and not the government.” As for red state Democrats, they hope to strike a compromise with Republicans that will get them off the hook with voters. They don’t deserve that.

Oh, Brother: Now Cul-de-sacs Are Evil

Filed under: Consumer Outrage,Economy,Taxes & Government — Tom @ 3:40 pm

The urban planning nannies don’t like them.

Well of course not, because the rest of us do:

Homeowners Love Cul-de-Sacs, Planners Say They’re Perils

One of the most popular features of suburbia is under attack.

For many families, cul-de-sac living represents the epitome of suburban bliss: a traffic-free play zone for children, a ready roster of neighbors with extra gas for the lawnmower and a communal gathering space for sharing gin and tonics. But thanks to a growing chorus of critics, ranging from city planners and traffic engineers to snowplow drivers, hundreds of local governments from San Luis Obispo, Calif., to Charlotte, N.C., have passed zoning ordinances to limit cul-de-sacs or even ban them in the future.

In Oregon, about 90% of the state’s 241 cities have changed their laws to limit cul-de-sacs, while 40 small municipalities outside Philadelphia have adopted restrictions or bans. Even when they’re not trying to stamp them out, some towns are keeping a close eye on how cul-de-sacs are being built. Earlier this year, the city of Pekin, Ill., established new rules to make cul-de-sacs more maneuverable for service vehicles like fire trucks and school buses.

While homes on cul-de-sacs are still being built in large numbers and continue to fetch premiums from buyers who prefer them, the opposition has only been growing. The most common complaint: traffic.

….. (for planners) cul-de-sacs have come to represent a failed experiment that has produced more isolation and more traffic by forcing people into their cars. David Schrank, a transportation researcher with the Texas Transportation Institute at Texas A&M University, says the old “peak hour” of traffic in many suburbs has been replaced by a longer “peak period.” As new developments spring up, he says, “sometimes the transport network isn’t in place to support them.”

Want proof that this is just more nanny/ninny intervention? Here it is:

For all the criticism aimed at them, cul-de-sacs do seem to have one last defender: the free market. Real-estate brokers say that despite the recent opposition by policy makers, homes on cul-de-sacs still tend to sell faster than other homes — and often command a comfortable premium.

Ya gotta love those free markets, which have a message for the planners: Build the roads.

The OpinionJournal Columns by Noonan, and about Arnold, Have a Common Thread to Success: Sincerity

Filed under: Economy,Immigration,Taxes & Government — Tom @ 1:12 pm

Peggy Noonan continues to risk her neck at The Wall Street Journal by siding with those who oppose illegal immigration. But she makes so much sense that only a bunch of fools would let her go (bolds are mine):

The American people right now are not in a mood to trust any political plan, proposal or policy that seems complicated–highly involved, technical, full of phased-in elements and glide paths and Part C’s.

….. Why?

Because they think–they assume, at this point, reflexively–that slithery, slippery professional politicians are using and inventing complications to obfuscate and confuse. They think politicians are using complexity to create great clouds in which they can make their escape, like a cartoon character, like Road Runner.

They think modern politicians hide in complexity. They think politicians evade responsibility with it. We can’t do the right thing, it’s too complicated! Americans don’t trust “comprehensive plans,” because they don’t trust the comprehensive planners.

This, I think, is the essential problem with Congress’s immigration proposals. All the phased-in-partial-assimilation-glide-paths-to-guest-worker-status stuff seems like a big 500-page con. It’s all too complicated to be understood by anyone who’s not a tenured political science professor with a second degree in accounting.

What people will trust, and understand, is this: We will close the border tomorrow, and then figure it out from there.

….. It has been said in politics that sincerity is everything, and once you can fake it you can do anything. But people can tell when you’re faking sincerity–on immigration, on taxes, on our very safety as a nation. Faking it isn’t working anymore.

Message to political leaders: You better mean it, or they’ll never let you do your phased-in multitiered comprehensive plan any more.

Though the word isn’t used in Jill Stewart’s column on California Governor Arnold Schwarzenegger’s “recovery” from his failed initiative attempts in California last fall, sincerity, and policies that reflect who he is, are carrying him. In my opinion, he is in a “his-to-lose” re-election situation against Phil Angelides, an opponent who appears to be quite a bit less than sincere (bolds are mine):

….. Mr. Schwarzenegger still hews to his Republican roots. His budget allows only $2.5 billion in deficit spending, down from $16.56 billion when he took over from wildly overspending Gray Davis. He’s been helped tremendously by the fact that California’s treasury is groaning with a $5 billion tax windfall, thanks to Californians who made money off stock profits, dizzying home sales prices and a booming California economy. The media is abuzz over the windfall, and rating agencies including Standard & Poor’s are pleased that the governor is spending it mostly on one-time improvements and a rainy day reserve, not on programs that grow long after the treasury goes bare.

….. The pinch-faced Mr. Angelides, inhibited by his over-the-top fury, faces Mr. Schwarzenegger’s greatest asset, his personal popularity. Even among bitchy Californians, he puts in so many hours on the job, has become so well-schooled in issues–and is so relentlessly cheerful about it all–that people simply like the guy, and now his approval ratings are back up.

Voters are particularly impressed by his coup in persuading the legislature to approve a $37 billion package of infrastructure bonds for the ballot.

Republican state Sen. Tom McClintock has long pointed out that the legislature has utterly abandoned its core duty to maintain levees, freeways, water works and other infrastructure. Since the 1970s, the Democratic legislature starved each of these pursuits, shifting billions into metastasizing welfare programs. While this profound shifting of public monies has been virtually undiscussed by the media, voters can see with their own eyes that California’s once world-class infrastructure is plummeting toward Third World status. No wonder a whopping 68% support Mr. Schwarzenegger’s call to rebuild.

While he uses such ideas to appeal to swing voters, Mr. Schwarzenegger has prevented a revolt among Republicans by vetoing taxes proposed by California’s inept legislature, a 120-person body of extremists with fewer than 10 politicians who can honestly be called “moderate.”

Since 2003, Mr. Schwarzenegger has refused to raise taxes and vetoed dozens of virulently anti-business bills. Although California has benefited from a robust national economy, Arnold enters this election able to argue that his way was right: California is booming.

It also doesn’t hurt that the soak-the-rich-for-universal-preschool “Meathead Tax” (named for its champion Rob Reiner, who played “Meathead” on the TV series “All in the Family” in the 1970s), which was opposed by Schwarzenegger and supported by Angelides, got trounced Tuesday.

Arnold — likable, cheerful, hard-working — sincere.

Angelides — over-the-top angry — insincere. (It’s getting to the point where saying “angry Democrat” is almost redundant.)

As befits a former bodybuilder, I think Arnold the Sincere is in “much better shape” than Stewart acknowledges.

There’s No Bias or Hoping for Bad News in This AP Piece, Is There?

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 12:11 pm

Good news on initial jobs claims gets discounted, sliced, and diced in this unattributed article by the Associated Press:

The number of laid off workers filing claims for unemployment plunged last week by the largest amount in eight months, but it might have been a statistical fluke.

The Labor Department reported Thursday that 302,000 Americans filed for benefits last week, down by 35,000 from the previous week. Analysts had been expecting a much smaller decline of around 6,000.

….. Analysts cautioned against reading too much into last week’s improvement, noting that it occurred during a holiday-shortened week when residents of many states would have had one less day to file their applications for benefits.

Many analysts are forecasting that the jobless claims numbers will begin rising on a sustained basis in coming months, signaling a slowing economy. In the most dramatic indication of that slowdown so far, the government reported last Friday that businesses created just 75,000 new jobs in May, far below the 170,000 job gain that analysts had been expecting.

The unemployment rate, which is based on a survey of households rather than business payroll analysis, fell to a five-year low of 4.6 percent last month. But economists believe that rate will start rising as well in the months ahead, as the economy slows.

I don’t have a big problem with the “fluke” explanation because of the shorter week (though you would think the “analysts” also knew it was a holiday week), but the bald predictions of higher jobless claims and a higher unemployment rate (without attributed quotes) in a “slowing economy” in what is supposed to be a straight-news piece is pretty blatant, even by AP’s alleged standards.

Yours truly will be coming back to this gem from time to time in the coming months.

Cross-posted at Newsbusters.org.

al-Kablooie

Filed under: News from Other Sites — Tom @ 11:52 am

Brain Shavings has the “priceless” post.
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UPDATE: A Rose by Any Other Name has a tribute from a military widow on one of the brave men who made the ultimate sacrifice. They’re doing it so that the Iraqi people and the world as a whole will have fewer thugs like Mr. gone-Kablooie.

This May Be the Summer of Mythbusting

Filed under: Economy,Quotes, Etc. of the Day,Taxes & Government — Tom @ 11:05 am

If so, it won’t be a moment too soon.

First, there’s Gregg Jackson’s “Conservative Comebacks to Liberal Lies,” mentioned in the AM-Cofffee post yesterday, favorably reviewed America’s leading intellectual, Thomas Sowell, and sure to leave the ignorant gasping for arguments — if not air.

Then there’s John Stossel’s “Myths, Lies, and Downright Stupidity,” which esteemed economist and occasional Rush Limbaugh substitute host Walter Williams covered in his column yesterday. Here are just a couple of the myths that get mashed:

Outsourcing destroys good jobs, and the new jobs created are inferior hamburger-flipping jobs. This myth is created by the likes of CNN’s Lou Dobbs, who said, “This country has lost the ability to feed and to clothe itself, to build its own automobiles, to provide its appliances, its electronics, its computers.” CNN correspondent Lisa Sylvester chimes, “The United States has been hemorrhaging manufacturing jobs.”

First, since 1992 there’s been a loss of 391 million jobs; however, during those years, America created 411 million new jobs, for a net gain of 20 million. A Dartmouth University Tuck School of Business study found that companies that send jobs abroad ended up hiring twice as many workers at home. Most new jobs created are higher-paid.

….. Hardly a day goes by without some kind of warning that mankind’s use of fossil fuels, especially in the U.S., is causing global warming. Stossel looks at the numbers. Half of this century’s global warming happened between 1900 and 1945. Stossel asks, “If man is responsible, why wasn’t there much more warming in the second half of the century? We burned much more fuel during that time.”

Facts are stubborn things, aren’t they?

Finally, there’s Ann Coulter’s “Godless,” which exposes liberalism as the equivalent of religion. The first chapter is at Townhall.

Combine these three books (and I’m sure there are others, so I hope no one feels slighted) with what could (emphasis “could”) be a positive sequence of events (continued strong economy, Iraq settling down, etc.), and we have the makings of a very instructive summer — which is a good thing, because kids in school, who need the most instructing in the ways of common sense, will be released back to the tender mercies of their oft-misguided teachers before you know it.

The Superrich and Insurance-Industry Hypocrites Who Oppose Death Tax Repeal

Filed under: Economy,Taxes & Government — Tom @ 8:59 am

The Wall Street Journal, in this OpinionJournal.com editorial (requires e-mail registration), calls both groups out (bolds are mine):

Taxes Everlasting
Why the superrich don’t mind the death tax.

If you’ve followed the death tax debate, you know that few issues raise liberal blood pressure more. Liberal journalists in particular are around the bend: How in the world can the public support repealing a tax that most Americans will never pay? Good question, so let us try to answer.

Americans favor repealing the death tax not because they think it will help them directly. They’re more principled than that. Two-thirds of the public wants to repeal it because they think taxing a lifetime of thrift due to the accident of death is unfair, and even immoral. They also understand that the really rich won’t pay the tax anyway because they hire lawyers to avoid it.

For proof that they’re right, they need only watch the current debate. The superrich or their kin–such as Bill Gates Sr. and Warren Buffett–are some of the loudest voices opposing repeal. Yet they are able to shelter their own vast wealth by creating foundations or via other crafty estate planning. Edward McCaffery, an estate tax expert at USC Law School, argues that “if breaking up large concentrations of wealth is the intention of the death tax, then it is a miserable failure.”

Do the Kennedys or Rockefellers look any poorer from the existence of a tax first created in 1917? The real people who pay the levy are the thrifty middle class and entrepreneurs who’ve built up a modest nest egg or business and are hit by a 46% tax rate when they die. Americans want family businesses, ranches, farms and other assets to be passed from one generation to the next. Yet the U.S. has one of the highest death tax rates in the world.

By far the largest supporter of preserving the death tax is the life insurance lobby, which could lose billions of dollars from policies written to avoid the tax. The Los Angeles Times reported this week that the insurance industry is the main funder of an anti-repeal outfit known as the Coalition for America’s Priorities.

….. Frank Keating, president of the American Council of Life Insurers, has criticized repeal by saying: “I am institutionally and intestinally against huge blocs of inherited wealth. I don’t think we need the Viscount of Enron or the Duke of Microsoft.” But while he was Oklahoma Governor in the 1990s, Mr. Keating took a different line: “I believe death taxes are un-American. They are rooted in the failed collectivist schemes of the past and have no place in a society that values entrepreneurship, work, saving, and families.” We can appreciate how such a marked change of views would give Mr. Keating intestinal issues.

(Aside: Mr. Keating’s disgraceful about-face is why you’d have to move heaven and earth to convince me to vote for a lawmaker-turned-lobbyist who tries to return to federal office — and even that might not be enough.)

Finally, The Journal even signs on to (channeled? stole? [just kidding, WSJ]) a compromise yours truly suggested in this comment yesterday. This compromise would have been politically wise for those who believe there is a defensible reason to assess some kind of non-punitive tax at death to have used from the very beginning of this debate in the late 1990s:

But Republicans should accept a compromise only if it lowers the death tax rate enough (to 15%) to reduce the incentive for avoidance and eliminate its punitive nature. Voters have been saying clearly and for years that they don’t want a tax whose only justification is government greed and envy.

Taxing untaxed gains (i.e., NOT the entire value of investments) at capital-gains rates at time of death is at least somewhat defensible. Waiting until the heirs ultimately sell inherited assets to assess cap-gains taxes would in my opinion be preferable. Not only would it be less economically disruptive, but it would keep the choice as to whether and when to sell where it should ideally belong. I would be willing to accept either, as long as the rate stays at the cap-gains rate or lower. The first time I hear a suggestion of a rate higher than cap-gains at death, or an attempt to tax entire asset values instead of just the gains, I’ll get both feet back onto the death-tax repeal bandwagon.

Oh, and ALL state death taxes (most of which do not have the marital deductions and other items that minimize hardship) should be repealed or converted to a capital-gains only framework — this minute.

Bizzy’s AM Coffee Biz-Econ-Life Links (060806)

Free Links:

  • This was inevitable, and you’ll see why in bold –

    The Texas Rangers hope to boost hot dog and beer sales this summer not only with a better team but with an innovation at the concession stands – swipe-free credit-card terminals. ….. credit-card sales are accounting for about 10 to 12 percent of concession sales so far, which club officials consider a success.

    “It’s easier for the fans, it’s quicker for the fans, and people will probably spend more money,” said Brad Alberts, a sales vice president for the Rangers.

    The concession-stand terminals are part of Chase Bank’s effort to expand the use of contactless cards that don’t need to be swiped through a reader, just held near the device.

  • It is NOT a source of national pride to be near the top of this list (a PDF from Cato; HT Club For Growth):

    DeathTaxRates

    Perhaps someone can enlighten me about the elements of Japanese and Korean culture that would lead to those ridiculous rates.

  • Maybe this will wake up the “There Is No Crisis” Crowd — “Aging population threatens USA’s ‘AAA’ credit rating”:

    The United States may lose its “AAA” top credit rating unless the government adopts “concerted” policy and fiscal reforms to mitigate the “intense” pressures on the budget from an aging population, ratings agency Standard & Poor’s said Tuesday.

    Unless the government takes measures to cut its fiscal deficit, the country’s credit rating would fall to single-A after 2015 and as low as the ‘BBB’ category by 2020, S&P said in a press release.

    I’m waiting for the “Rovian Conspiracy” chants to begin.

  • Corruptly Practicing AccountantsThis made my day (NOT):

    The Securities and Exchange Commission has taken disciplinary action against more than 50 accountants in 2005 and 2006 for misconduct in scandals big and small. But few have paid a dime to compensate shareholders for their varying levels of neglect or complicity.

    It also turns out that nearly half of them continue to hold valid state licenses to hang out their shingles as certified public accountants, based on an examination of public records by The Associated Press.

    So while the SEC has forbidden these CPA’s from preparing, auditing or reviewing financial statements for a public company, they remain free to perform those very same services for private companies and other organizations that may be unaware of their professional misdeeds.

  • You wonder how people get talked into investing their money sometimesThis is one of them.
  • The National Association of Realtors, not exactly a disinterested group, has revised their 2006 forecast for sales of existing and new homes for the rest of the year down a bit more, and wants the Fed to chill on interest-rate hikes. I don’t think Bernanke will heed the call. People watching the money supply and the price of gold say he shouldn’t. I would say those people are correct, though the risk of additional foreclosures and more cooling are undeniable.

Positivity: Erin Dodds Celebrates a Year Cancer-Free

Filed under: Positivity — Tom @ 5:55 am

A conscentious doctor, months of treatment, and her own determination led to her recovery:

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