Tuesday, March 10, 2009

No Help Needed

We tax all the others and pass the revenue on to you

Paul Krugman is a Nobel laureate economist and a NY Times columnist. An odd and egocentric combo but there you have it. He lamented Sunday that the problem with the stimulus-bailout is that it's too small, as a consequence of which the administration won't be able to pass another stimulus-bailout bill this fall.

That's a warning from a Nobel-winner. The current plan is tanking and is going to need its own bailout. Problem is, how much money will be needed then and where's it going to come from and who is going to support more spending when this round fails? Will the prez have the political capital to pull off another round of massive spending?

Krugman hedges by saying it's a warning, not a prediction. That's what Nobel economists do instead of giving answers to problems they tell us about. The second stimulus is already on its way, count on it.

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"Carried interest" at its heart treats some hedge fund income as capital gains, resulting in billions in tax savings to market manipulators. The administration has the good idea of characterizing it as the ordinary income it is. There was a good article in the NY Times yesterday. Republicans have no thoughts on the issue (qu'elle surprise). Lobbyists for the investment industry, the National Venture Capital Association for one, abhor the idea. Even Magic Johnson has weighed in with warnings about the effect on investors in minority communities. That effect would be, um... the same tax rate on those investors as on the members of the minority communities? Sounds pretty fair, which is exactly their problem with it.

Half of what you pay for gas is taxes. Roughly the same for cigs, beer, the things you buy on a daily basis. What taxes do stock traders pay for their purchases? Nothing. Time to bring back Bob Hebert's idea of a .0025% tax, sort of a sales tax, on stock market purchases. (See my 1-14-09 blog.) You drive to work, you pay gas and road taxes. You buy stocks for free, sitting in your PJs in front of your PC? Tax-free purchases and capital gains tax treatment on the back end if you hold them long enough. If you lose money on the deal, you suffer the loss, no more. Looks like an ideal place for a use tax to me.

Hey TimmyG! These two ideas will bring in revenue with minimal impact on your boss or his core constitutency. They're worth a shot.

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Hey Republicans, where are your ideas and plans? At least get them on the table for us to see. We're all in this together, remember? If your ideas are better than what we have now, you'll eventually prevail. No, really, that's how it works.

And if you have an idea that might help, can you contact TimmyG or his minions? Well, no. Check out the DeptTreas website. They've got a "contact us" page, of course, but no place for you to offer your help. Guess they've don't need any.

Any intelligent fool can make things bigger and more complex... It takes a touch of genius - and a lot of courage to move in the opposite direction. -- Albert Einstein

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