Couldn’t Help But Notice (071907)
How Now, Thou Dow at 14 Thou? — This may be the week that the Dow Jones Industrial Average (DJIA) breaks 14K and stays there. Yesterday’s post-close announcement by Dow component IBM had that stock up over $3 in after-hours trading.
Though as discussed previously, it’s not the best of benchmarks, it’s surely worth noting that the DJIA has nearly doubled since its post-dotcom bubble, post-9/11 trough of 7181 on October 10, 2002. More importantly, the S&P 500 is with a percentage point of its all-time high.
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Paul Weyrich warns in his Townhall column today that a massive, market-distorting tax increase is winding its way through Congress:
H.R. 2834 is sponsored by Rep. Sander M. Levin (D-MI) and would reclassify carried interest as ordinary income. That represents a 133% (tax increase) on so-called flow-through investment partnerships. Retirees and anyone on a pension would be especially hard hit by this approach. The proposal would tax carried interest at 35% instead of the capital gains rate of 15%. Pension funds are some of the biggest investors in flow-through investment partnerships. Raising taxes on the partners will hurt the investors.
This measure does the opposite of what good public policy should. Good public policy creates capital. It does not discourage one from taking risks. Carried interest represents the sweat equity which general partners put into the deal. It is, in fact, capital and should be treated as such, which means taxing it at capital gains rates.
Weyrich calculated the 133% tax-rate increase by dividing the top ordinary-income rate by the cap gains rate (35% divided by 15% = 2.33 — a 133% increase).
Weyrich is right that what is involved is risk capital, and that the cap gains rate is what should be applied to these types of gains.
If Congressional tax-and-spenders want to treat cap gains as ordinary income, it should be attempting to pass legislation that would do so across the board. But proponents know that this would be hugely unpopular and would never fly.
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The presidential candidate affectionately known around here as BHOO (Barack Hussein “Obambi” Obama) is “absolutely convinced that culture Wars are just so ’90s” (first item at link).
Pretty odd, coming from a guy reported as saying the following things just two months ago:
Sen. Barack Obama (D-Ill.) is delivering pointed critiques of the African American community as he campaigns for its votes, lamenting that many of his generation are “disenfranchising” themselves because they don’t vote, taking rappers to task for their language, and decrying “anti-intellectualism” in the black community, including black children telling peers who get good grades that they are “acting white.”
The answer, of course, is that BHOO changes his message depending on his audience, and relies on Old Media to ignore the inconsistencies. He talks of the Culture Wars being over when he’s at Planned Parenthood, while invoking Culture War-related themes in front of African-American audiences. It’s legitimate to ask if he really believes in anything besides getting elected.
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The Cincinnati Post is putting itself to sleep at the end of this year. In almost 2-1/2 years of blogging, I think I’ve only referred to it once, in this entry (first numbered item cited) during the the summer 2005 Schmidt-Hackett race — and I had to go to the library’s database to get the text. I don’t think the paper has broken a really important story since the early 1990s Hamco Auditor’s Office scandal Bill Sloat cited Tuesday at The Daily Bellwether.
The Post’s demise is more a result of disinterest in afternoon newspapers than anything else. This two-year-old Top Ten List of afternoon papers has Number One’s circulation at a measly 138,000.
The disappearance of the Post could have been, and conceivably still could be, a unique opportunity to create a local Internet daily to fill the (sort of) void, but apparently Scripps Howard will not even entertain the idea. It should have. Since it won’t, maybe someone who sees potential value could buy the brand from Scripps and use it as an online springboard. It would require deep pockets and a lot of patience, which is why I don’t see it happening.
