Suitably Flip

NYC Top Marginal Combined Tax Rate Would Near 60%

Who wouldn't want to work for the government until August every year?

Congressional plans to fund a massive health-care overhaul could have a job-killing effect on New York, creating a tax rate of nearly 60 percent for the state's top earners and possibly pressuring small-business owners to shed workers.
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The top rate in New York City, home to many of the state's wealthiest people, would be 58.68 percent, the Washington-based Tax Foundation said in a report yesterday.

That means New York's top earners, small-business owners and most dynamic entrepreneurs will be facing new fees and penalties.

The $544 billion tax hike would violate one of President Obama's ironclad campaign promises: No family will pay higher tax rates than they would have paid in the 1990s.

On the bright side, government control of private sector compensation ought to help ease New Yorkers' concerns about reaching the top bracket.

Chris Quinn's Hysterical Hyperbole

New York City Council speaker Christine Quinn is dismayed about the legislative gridlock in Albany, noting that it has prevented the State Senate from imposing her and Bloomberg's nearly billion-dollar tax hike "revenue package" on New York City residents.

It's well known that New York is a dangerously undertaxed city, but I'm not sure Quinn's insistence that this is "close to life or death stuff" isn't just a touch overblown.

Americans Want Higher Taxes

Yes, it's "true"!

A majority (*cough* of Obama supporters) favor hiking taxes to pay for socializing health care.

From the Washington Examiner:

Obamacare advocates can only hope their friends in the mainstream media do a better job of carrying their water for them in the weeks ahead than The New York Times and CBS with their latest poll. Using a sample with exactly twice as many Obama voters as McCain voters, the Times/CBS pollsters got a result in which 57 percent of their respondents said they would pay higher taxes “so that all Americans have health insurance that they can’t lose no matter what.”

(Yet) Another New Tax From Which the Bottom 95% Should Probably Divert Their Eyes

Shazam.

With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama's policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

While it'd be a whopper, a national sales tax seems unlikely (despite the pesky mathematical consequences of the government spending gazillions of dollars it doesn't have).  Republicans hate it because it's an enormous new tax.  And Democrats don't love it as lasciviously as they do other taxes because it's less "progressive" (i.e. it doesn't disproportionately soak the higher income brackets as elegantly as, say, a steeply graduated income tax or a supplemental hundred-thousandaires' tax).

Happily, there's a much simpler way to pay for Obama's newest trillion-dollar adventure: scrub it.

New Evidence Confirms: People Rational

Policymakers excluded, naturally.

Here's the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.

And the evidence that we discovered in our new study for the American Legislative Exchange Council, "Rich States, Poor States," published in March, shows that Americans are more sensitive to high taxes than ever before. The tax differential between low-tax and high-tax states is widening, meaning that a relocation from high-tax California or Ohio, to no-income tax Texas or Tennessee, is all the more financially profitable both in terms of lower tax bills and more job opportunities.

Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.

New Hampshire helps give the lie to the feeble counterargument.

Those who disapprove of tax competition complain that lower state taxes only create a zero-sum competition where states "race to the bottom" and cut services to the poor as taxes fall to zero. They say that tax cutting inevitably means lower quality schools and police protection as lower tax rates mean starvation of public services.

They're wrong, and New Hampshire is our favorite illustration. The Live Free or Die State has no income or sales tax, yet it has high-quality schools and excellent public services. Students in New Hampshire public schools achieve the fourth-highest test scores in the nation -- even though the state spends about $1,000 a year less per resident on state and local government than the average state and, incredibly, $5,000 less per person than New York. And on the other side of the ledger, California in 2007 had the highest-paid classroom teachers in the nation, and yet the Golden State had the second-lowest test scores.

AIP Column: The Obama-Geithner Savings Plan

I've got a column up today at American Issues Project exploring the righteous crack down on offshore tax havens poised to tax "save" us some $210 billion.

Tax Facts To Make Your Head Explode

HT: The Corner

I ♥ the 70s

If you do too, then get ready for an Empire State retro-extravaganza.

This state was getting overcrowded anyway.

New York's ruling Democratic trium virate took a giant generational leap backward yesterday to the destructive days of John Lindsay, Abe Beame and Nelson Rockefeller.

The budget created by Gov. Paterson, Assembly Speaker Sheldon Silver and Senate Majority Leader Malcolm Smith is a monstrously bloated, tax-and-spend plan that, in one fell swoop, reverses a three-decade-long effort to strengthen business and prevent taxpayers from fleeing the state.

The wrecking ball of a new state budget, approved in Kremlin-like secrecy by the troika, also ranks as one of the biggest betrayals in process and substance by a governor in New York history.

How monstrously bloated, you ask?

A Big Apple family of five with a combined income of $450,000 will end up shelling out at least an additional $5,200 a year more under the budget agreed to by Gov. Paterson and legislative leaders.
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They'll fork over $4,320 extra in state income tax alone thanks to the "millionaire's tax," which whacks households earning over $300,000 with a 1 percent hike.

The Post reached that number by adjusting their taxable income with $3,000 in deductions for their three children, and the $15,000 standard deduction.

As steep as their new bill is, their more affluent neighbors will be hit even harder. New Yorkers who earn over $500,000 will see their personal income tax rate jump from 6.85 percent to 8.97 percent.

Lamented a prescient econo-political blogger last November in re the tax implications of the new power structure in Albany...

New York's nearly superlatively punitive tax scheme is - amazingly - the product of a legislature whose upper house has been in Republican hands almost exclusively since the late 1930s.  While Democrats have long-controlled the State Assembly, the State Senate was New York's final GOP holdout once Client #9 became Governor.
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Albany's screwy political architecture means the power in each house is unusually concentrated in the hands of the majority (something Senate Democrats and Assembly Republicans have historically lamented in unison).

In all likelihood, this handover thus heralds a dramatic shift toward even more liberal economic policies in New York State.  Perhaps now we can finally win back our #1 ranking from New Jersey as the worst business tax climate in the country, having wallowed at 2nd worst for the last few years.

For a sense of how much economic damage this might inflict on American business generally, consider the fact that the 40-some Fortune 500 companies based in New York City alone account for well over a trillion dollars in annual income (roughly the GDP of Brazil).

State Senate Dems undoubtedly salivate at the thought of this bottomless piggybank which they can now use without obstruction to fund their bloated adventures in big government.  Past experience has given us little reason to assume they'll stop to consider the impact of increasingly punitive taxes on job creation, the value of investment portfolios (retirement accounts) that hold stock in large companies, or the general health of the state economy, already nearly crippled by a tax scheme that gives capital and successful businesses every incentive to relocate across state lines or overseas.

John Campbell (R-CA) On Bonus Confiscation

Rep. Campbell apparently isn't a fan of the federal legislature wielding its tax authority to nullify valid contracts.

I firmly opposed and voted “no” on HR 1586. Let’s first understand exactly what the bill does. It imposes a 90% federal income tax on any bonus paid to any employee of any company that has received over $5 Billion in federal rescue funds. ... The tax would only apply to people with total joint incomes over $250,000 or single individuals with income of over $125,000. When combined with California Income taxes which now top out at 10.55%, this can be a tax just short of 101% of the income.

Under this law, a bank teller at Wells Fargo could receive a bonus of $1,000 for doing a great job. If that bank teller was married to a physician who made $175,000 and they had some additional investment income, that bank teller would pay a tax of $1,055 on the bonus of $1,000 that they received for doing a good job. This is horrible!
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You may or may not realize it, but embezzlement income is taxable today, but at normal rates. So if you steal money, you will not have a tax higher than normal. You may be forced to give the money back because you stole it, but it will not be taxed away from you. This bill makes a bonus from Bank of America a more egregious offense under the tax laws than bank robbery.

All of this was caused because we nationalized companies that are created to make a profit. Throughout time, governments have shown themselves to be particularly inept at such an enterprise. This is another example of why.

A Taste Of Things To Come

For those who've failed to learn the lessons of the behavioral effects of taxation from Jimmy Carter, Ronald Reagan, or George W. Bush, one need look only to Zug.

The tidy towns and mountain vistas of Switzerland are an unlikely setting for an oil boom.

Yet a wave of energy companies has in the last few months announced plans to move to Switzerland -- mainly for its appeal as a low-tax corporate domicile that looks relatively likely to stay out of reach of Barack Obama's tax-seeking administration.

In a country with scant crude oil production of its own, the virtual energy boom has changed the canton or state of Zug, about 30 minutes' drive from Zurich, beyond all recognition. Its economy was based on farming until it slashed tax rates to attract commerce after World War Two.

It still has a chocolate-box old town with views over a lake to the high Alps, but is now surrounded by gleaming corporate offices -- including commodity trader Glencore and oil refiner Petroplus -- shopping malls and housing developments.

Local authorities say about 13 percent of full-time jobs in Zug canton are in the raw materials sector.

Over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland.

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Truly Shocking Quote Of the Day

"I don't want to get it coming and going.  I don't want to get the federal raised, and then the state raised, and then the phone tax raised, and the television tax raised, and the city tax... bug off me!  ... There's real people out here, trying to keep it together."

A few short months ago, who'ulda thunk a farcical leftward bastion such as Whoopi might be heard railing against the sweeping tax hikes required to underwrite America's unprecedented socialist adventures?

If it weren't for Joy Behar promptly ushering viewers back into a blunt daytime stupor, one might mistake this for a intelligent program.

Obstruction Of Reduction Of Mortgage Deduction

Now, if they'd only look into thwarting the income tax hike, the capital gains tax hike, the carried interest tax hike, and the oil and gas tax hike, we'd be getting somewhere.

President Barack Obama is meeting strong Democratic Party resistance to his proposal to reduce tax deductions enjoyed by upper-income Americans and could be forced to drop or modify the idea.

Mr. Obama in his budget blueprint last week proposed a cap on itemized deductions for mortgage interest and charitable donations to help pay for his health-care overhaul. The plan would cost wealthier taxpayers about $318 billion in new taxes over 10 years, according to government estimates.

But after objections from Democratic lawmakers, Treasury Secretary Timothy Geithner appeared to suggest at one point Wednesday that the administration was willing to consider dropping or modifying the proposal.
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Sen. Max Baucus (D., Mont.), the Senate's top tax writer as chairman of the Finance Committee, told Mr. Geithner he was especially concerned about paying for expanded health coverage with a deductions curb that "has nothing to do with health care." He added: "I'm wondering about the viability of that provision."

Spend and Tax

No, they didn't mention it until after they sold the stimulus, but anyone to whom this comes as a surprise never bothered to count all those zeroes.

President Obama is putting the finishing touches on an ambitious first budget that seeks to cut the federal deficit in half over the next four years, primarily by raising taxes on businesses and the wealthy and by slashing spending on the wars in Iraq and Afghanistan, administration officials said.
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Obama also seeks to increase tax collections, mainly by making good on his promise to eliminate some of the temporary tax cuts enacted in 2001 and 2003. While the budget would keep the breaks that benefit middle-income families, it would eliminate them for wealthy taxpayers, defined as families earning more than $250,000 a year. Those tax breaks would be permitted to expire on schedule in 2011. That means the top tax rate would rise from 35 percent to 39.6 percent, the tax on capital gains would jump to 20 percent from 15 percent for wealthy filers and the tax on estates worth more than $3.5 million would be maintained at the current rate of 45 percent.

Obama also proposes "a fairly aggressive effort on tax enforcement" that would target corporate loopholes, the official said. And Obama's budget seeks to tax the earnings of hedge fund managers as normal income rather than at the lower 15 percent capital gains rate.

Contending with a sharp recession by reversing demonstrably effective pro-growth tax cuts... this can't miss.

A Good Day For H&R Block

Earlier today, Treasury Secretary designate Tim Geithner discussed his years-long failure to pay certain self employment taxes for 2001-2002 during his Senate confirmation testimony:

Sen. Chuck Grassley (R-Iowa) asked: "Did you use tax software to prepare your taxes?"

Geithner: "Yes, I did."

Grassley: "Which brand of tax software?"

Geithner: "I will answer that, but I want to say I take full responsibility....It was TurboTax."

This elicited chuckles from the gallery.  Nervous chuckles, perhaps.  I wonder how many of them use (or now, perhaps used to use) TurboTax to prepare their own returns.

Update: TurboTax responds.

“Each year, millions of Americans use TurboTax to accurately prepare and file their federal and state tax returns,” Dan Maurer, senior vice president and general manager of TurboTax, said in a statement late this afternoon. “The software helps taxpayers report their income and find the deductions and credits they’re entitled to claim. TurboTax, and all software and in-person tax preparation services, base their calculations on the information users provide when completing their returns. TurboTax also has built-in error-checking tools that routinely catch common taxpayer mistakes. Federal law and our own privacy policy prohibit us from discussing specifics of any customer’s return.”

No Taxation Without Respiration - Part II

This officially marks the longest lag between Parts I and II of a post on this blog.  Perhaps on any blog.  Or in any medium whatsoever, to date or hereafter.  With the possible exception of Chinatown and The Two Jakes.

Part I was the first post that ever graced these pages, going on four years ago.

Those were simpler times...  The economy was booming.  Independent investment banks roamed the earth.  Barney Frank wasn't chairman of anything.

The occasion for the post was the House passing a repeal of the death tax.  At the time I linked to an analysis by Heritage's William Beach (which I'm sure he's updated since then, but which is still available at the same link), detailing why this particular brand of double- (or triple-) taxation is not only unfair, it's downright abysmal policy that discourages savings and investment, undermines job creation and wage growth, constraints investment, and harshly punishes wealth creation.

The occasion for visiting the morbid topic today is the apparent will of the President-elect and his ilk in the Congress to save it from its blessed demise, currently slated for 2010.

I really don't have anything new to say about it (it's mainly an excuse to call back that absurdly old post), except to reiterate the above points with redoubled emphasis, as the inevitably harmful impact on countless small businesses (and the countless jobs they create) will be all the more dearly felt, given the weakened state of the economy.

Sadly, if Obama and his Congressional handlers want this to happen (and it appears they do), it's going to happen.

Of some consolation is the prospect that the repeal (of the repeal) might lower the senior suicide rate in 2010.

Previously:  No Taxation Without Respiration

The $300 Billion Tax Cut That Isn't

I railed about this on Strategy Room this morning, but I need to get it down on paper screen or it's going to continue to gnaw at me.

Barack Obama's ostensible $300 billion tax cut is anything but.  It's being used as a lure, in order to - well, lure Republicans to the farcically irresponsible and inevitably feckless trillion-dollar Keynesian stimulus plan, but with tax cuts like these, who needs socialism?

So far the plan is lean on details, but there are a few things we do know.

• It will include a $500 rebate for nearly every working American (whether or not they pay federal income taxes).  For low earners, this is welfare (an expensive and ineffective spending program rarely mistaken for a tax cut).  But even for high earners, this is just a rebate.  It's very similar to the stimulus checks that were sent out in 2008 (both in structure and size).  I don't recall precisely how that worked out, but if I recall correctly, it solved everything.


• The "corporate tax cuts" included in the plan will enable businesses to accelerate write-offs related to losses incurred in 2008, and will offer some incremental job creation incentives.  If Obama's past rhetoric is any guide, those job incentives will be strongly concentrated among (or possibly limited to) federally blessed "green jobs" and companies who promise not to make efficient and rational use of the global labor market send jobs overseas.

On the whole, these tax "cuts" represent significant expansion of government intervention and of wealth redistribution (which is something akin to the opposite of tax cuts).  The reason that actual tax cuts are well-indicated for digging out of economic recessions is that they encourage the useful deployment of capital by increasing the expected after-tax returns of those doing the deploying.  For anyone who has trouble following the economic causality (e.g. elected officials on both sides of the aisle), Reagan in 1981 and Bush in 2001 provided us with strong, confirming empirical evidence.  Few if any of the 300 billion dollars in Obama's package do anything of this sort.

If Congressional Republicans do sign on with the trillion-dollar stimulus in consideration for this package of tax "cuts", they will have sold their fiscal souls for an embarrassingly cheap price.

The Romney Plan

If only:

• Lower corporate tax rates
• Eliminate capital gains and dividend income taxes (at least for some income brackets)
• Focus stimulus spending on "shovel-ready" and genuinely necessary military projects
• Fund energy research, including nuclear
• Slash state governments (reduce headcount, eliminate duplicate and wasteful agencies)
• GOP blocks en masse any pork-infused spending bills
• Avoid knee-jerk over-regulation of financial services
• Don't grant unions any more power than they already have

I'll be pleasantly dumbfounded if more than one of these proposals - as paraphrased by me - comes to pass.  (The last four are pure fantasy.)  The country's just in too much of a collectivist, protectionist, Keynesian funk these days.  We've got an inbound administration whose rhetoric in the face of economic turmoil is equal parts Roosevelt, Hoover, and Carter; and the public by and large is signing on as if we hadn't been to this rodeo before.

Spoiler alert: it ends poorly.

Paterson To Rob New Yorkers Blind

See what I did there?  It's a pun.  At his expense.  It's okay - he's a good sport about these things.

Plus, he's earned a bit of rebuke with this one.

Trying to close a $15.4 billion budget gap, Paterson called for 88 new fees and a host of other taxes, including an "iPod tax" that taxes the sale of downloaded music and other "digitally delivered entertainment services."

"We're going to have to take some extreme measures," Paterson said Tuesday after unveiling the slash-and-burn budget.

The proposal, which needs legislative approval, did not include broad-based income tax increases, but relied on smaller ones to raise $4.1 billion from cash-strapped New Yorkers.

Movie tickets, taxi rides, soda, beer, wine, cigars and massages would be taxed under Paterson's proposal. It also extends sales taxes to cable and satellite TV services and removes the tax exemption for clothes costing less than $110.

Paterson managed to peeve folks on both sides of the aisle with this move - Republicans because it serves to further bloat the hideously bloated state government, and Democrats because sales and usage taxes tend to be less "progressive" (read: fairer) than steeply graduated income taxes.

Observe:

Assembly Speaker [Democrat] Sheldon Silver, who supports a so-called millionaire tax, has said he'd "rather have a broad-based tax than nickel-and-dime" people.
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Republican lawmakers expressed concern with the tax and fee increases.

"Instead of raising taxes, we need to be reducing them," said Assembly Minority Leader James Tedisco (R-Schenectady).

Rather than slashing the budget during such tight times (or even holding the line), Paterson has managed only to slow the rate of growth.

Paterson's 2009-10 budget proposal represents only a 1% increase in total spending from this year's budget - the smallest increase in a dozen years.

As bad as all this is, I do have to credit Paterson with a comprehension of the behavioral impact of "progressive" taxation that tends to elude most others in his party.

Paterson did not rule out income tax increases but said spending reductions are the priority. He also defended the fee and sales tax increases, saying they would be less harmful to the state's economy.

"If you start taxing at times when [revenues are] receding, you'll drive job creators out of the state," Paterson said.

Update:  Jammie Wearing Fool makes an apt cinematic comparison.

Chuck Schumer Titters Over Stimulupalooza II

When a $150 billion consumer stimulus package fails utterly, you can choose to learn one of two lessons:

1)  "Stimulating" the economy by sending checks to consumers is ineffectual.

2)  We just haven't done it BIG enough!

Our old friend "Trickle Up" Chuck chooses to believe the latter.

Sen. Charles Schumer, D-NY, said Sunday that he thinks the economic stimulus package should be between $500-700 billion.

In an interview with ABC's This Week, Schumer said, "I believe we need a pretty big package here," Schumer said, adding that Congress is working on getting the economic package to president elect Barack Obama by inauguration day. "I think it has to be deep. In my view, it has to be between $500 and $700 billion dollars and that's because our economy is in serious, serious trouble."

"It's a little like having a new New Deal, but you have to do it before the Depression. Not after," Schumer added.

If you want to something "big", something "deep", and you want to have an actual chance of materially improving the economy, there are much easier ways to go.

• Eliminate the federal capital gains and dividend income taxes (0% for everyone), rather than simply postponing plans to raise them.
• Lower the corporate income tax rate (without raising other tax rates simultaneously, as Charlie Rangel slipperily suggests).

Either (or ideally, both) would attract capital, encourage sustainable job creation, and fuel output growth.  Both economic theory and empirical evidence leave little doubt about it.

Schumer's half-trillion-dollar giveaway, on the other hand, while expensive, is highly unlikely to yield any meaningful results.  Its foreseeable fecklessness is likewise supported by both economic theory and historical evidence.

Aides Say Obama Likely To Hold Off On Poisoning the Economy

For a couple years, anyway.

Daley:

Obama adviser Bill Daley says Obama will "more likely than not" postpone a tax increase for the rich until 2011, when the Bush tax cuts expire, rather than pushing to repeal them now.

He made the comment on Meet the Press, and it's a suggestion that Obama will tailor his initiatives to avoid burdening the struggling economy -- even at the cost of a widening deficit.

Axelrod:

President-elect Barack Obama may consider delaying an election promise - to roll back tax cuts on high-income Americans - as part of his economic recovery strategy, a senior aide and an adviser said on Sunday.

David Axelrod, one of Obama’s closest confidants chosen to be a senior White House adviser, was asked if the tax cut could be ended later than Obama called for during the campaign. “Considerations will be made,” he said on “Fox News Sunday.”

This is one trial balloon that won't likely go over well among the screaming nutroots and other "social Democrat"circles.

And You Thought New York Had High Taxes Before

New York's nearly superlatively punitive tax scheme is - amazingly - the product of a legislature whose upper house has been in Republican hands almost exclusively since the late 1930s.  While Democrats have long-controlled the State Assembly, the State Senate was New York's final GOP holdout once Client #9 became Governor.

In 2006, the 4-seat majority was narrowed (no thanks to me).  And yesterday, it officially vanished.

The single most powerful institution in the history of New York state politics has fallen: Senate Republicans have lost the majority after controlling the chamber for all but one year of the past seven decades.
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Democrats seized two seats from the Republicans, picked up one vacant seat, and protected their most hotly challenged incumbent, while the GOP picked up one vacant seat and preserved two hotly contested Republican seats.
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"Today, change begins," said Senate Democratic Leader Malcolm A. Smith, who is expected to become Senate majority leader when the Democrats take over in January.

Albany's screwy political architecture means the power in each house is unusually concentrated in the hands of the majority (something Senate Democrats and Assembly Republicans have historically lamented in unison).

In all likelihood, this handover thus heralds a dramatic shift toward even more liberal economic policies in New York State.  Perhaps now we can finally win back our #1 ranking from New Jersey as the worst business tax climate in the country, having wallowed at 2nd worst for the last few years.

For a sense of how much economic damage this might inflict on American business generally, consider the fact that the 40-some Fortune 500 companies based in New York City alone account for well over a trillion dollars in annual income (roughly the GDP of Brazil).

State Senate Dems undoubtedly salivate at the though of this bottomless piggybank which they can now use without obstruction to fund their bloated adventures in big government.  Past experience has given us little reason to assume they'll stop to consider the impact of increasingly punitive taxes on job creation, the value of investment portfolios (retirement accounts) that hold stock in large companies, or the general health of the state economy, already nearly crippled by a tax scheme that gives capital and successful businesses every incentive to relocate across state lines or overseas.

Rasmussen: McCain More Trusted On Economy, Taxes

More confirmation that revelations of Obama's socialist leanings are sinking in nationwide and that Americans are gradually waking from their Hopenchange hypnosis.

After several weeks of John McCain’s campaign attacks on Barack Obama’s tax plan and idea of “spreading the wealth around”, the latest Rasmussen Reports national telephone survey finds voters trust McCain more than Obama on taxes, 47% to 45%.

Two weeks ago, Obama had a one point-advantage on the issue of taxes and a month ago, he had a three-point edge.

The swing on the economy question is even more dramatic.

McCain also has gained ground as the candidate to trust on economic issues. Forty-eight percent (48%) now trust the Republican hopeful more than the Democrat while 47% hold the opposite view. This is the first time McCain has led on the issue that has hurt his campaign since September 17. One month ago, Obama held a nine-point advantage when it came to economic issues.

(HT: HA Headlines)

Storming Off the Set 101

Lesson 1:  Remove the earpiece first.

Courtesy of Johnny Dollar's Place, via HA Headlines

Quote Of the Week

Senator George Voinovich (R-OH) on Barack Obama:

"He is left of Teddy Kennedy. With all due respect, the man is a socialist."

This is just silly. It's common knowledge that the Senate's only true socialist (the only one to admit it proudly, anyway) is Bernie Sanders of Vermont.

Yes, Obama was an active member of a socialist party when he ran for State Senate.  And yes, Obama did campaign for Sanders in 2006 and yes, he's established a more liberal voting record than Sanders.  But does that really make Barack "Spread the Wealth" Obama a socialist?

If we're going to start labeling as socialists all Senators with more liberal voting records than their confessed socialist colleague, then there'd be as many as two other Senators we'd be forced to classify as such.

Yes, two.  Multiple.

I don't want to ruin the surprise for you...  Highlight the white space below to reveal Obama's two fellow sub-Sanders pseudo-socialists.

In 2007, Obama's composite liberal score of 95.5 was the highest in the Senate. Rounding out the top five most liberal senators last year were Sens. Sheldon Whitehouse, D-R.I., with a composite liberal score of 94.3; Joseph Biden, D-Del., with a 94.2; Bernie Sanders, I-Vt., with a 93.7; and Robert Menendez, D-N.J., with a 92.8.

Debate 3: Mac's Last Stand

How many minutes into the proceedings will McCain first bring up Bill Ayers?  I'm guessing 15.

In addition to hammering Obama's on his circle of terrorist buddies, McCain - as has been endlessly opined - needs to make his economic case.  He's got plenty of ammunition (particularly with regard to investment income taxes and windfall profit taxes), as Obama's plans to punish capital represents the surest parth to devaluing stocks and killing jobs.  If the economic theory eludes McCain, he can point to Obama's closest historical analog, our 39th President, and remind Americans how well this worked last time.

Whether McCain elects to finally fire those bullets is another story.

Reminding people that Obama and his Democratic colleagues were the ones who thwarted the attempts of McCain and other Republicans to rein in Fannie and Freddie is also important, but McCain's already proven willing to make this point (and likely will again tonight), so I don't expect this to be a source of major annoyance this evening.  The expected infuriations involve 1) McCain letting Obama get away with his whopper that 95% of Americans won't be hurt by his tax increases and 2) kid gloves remaining on during the Ayers exchange.

Ideally, I'd like to see McCain ask Obama why, if he believes "spreading the wealth around" helps everybody, he hasn't simply been cutting an extra check to the IRS each year to bring his own effective tax rate up to the "fair share" he'd like to see imposed on high income earners.

It doesn't matter how bad a year this is for Republicans.  A terrorist-sympathizing candidate with strong socialist leanings (and former socialist party membership) shouldn't even be polling in the double-digits.  McCain can still put him away, but he needs to get in the fight tonight in a way he hasn't even approached in earlier rounds.

100 million eyeballs will tune in again tonight, but after this the election goes on auto-pilot, save a true October bombshell.

Update:  Significantly better than expected.  A solid B- for McCain, possibly bumped up to a B for his Herbert Hoover zinger.  Not enough pushback on Obama's minimization of his Ayers relationships, nor on the 95%-of-taxpayers baloney.  Not a knock-out by any means, but a pleasant surprise nonetheless.

Update:  Heh.

Obama called on people to put down their video games, but as a McCain staffer e-mails: “But he advertises on them? Disingenuousness.”

What Obama actually said was that he was going to take away our video games.

Update:  Joe the plumber weighs in on the debate that featured him some 20 times.

In Ohio on Sunday, Obama was approached by one man who said, "Your new tax plan's going to tax me more."

A video clip caught by Fox News shows Obama replying, "It's not that I want to punish your success. I just want to make sure that everybody who is behind you, that they've got a chance at success, too. And I think that when we spread the wealth around, it's good for everybody."

McCain referred repeatedly to that voter, Joe Wurzelbacher, a plumber from Toledo, Ohio.

Wurzelbacher watched Wednesday night's debate and said he still thinks Obama's plan would keep him from buying the small business that employs him.

About McCain: "He's got it right as far as I go."

An Econo-Political Positive Feedback Loop?

In the last 19 days, the S&P 500 stock index has declined nearly 22%.  Over that same period, the odds of John McCain winning the election (based on the price of the corresponding Intrade contract) has plummeted from 48% to 24%.

There's clearly a correlation, but what's the causal connection?  Are we seeing McCain's chances dwindle in response to worsening economic news?  Or are we seeing stock values decline in response to a greater likelihood of an Obama Presidency?

Since polling has shown a general voter preference for Obama on economic matters, it stands to reason that his prospects would improve as turmoil increases and the market declines.  On the other hand, Obama's stated intent to increase investment income tax rates threatens to dramatically (and immediately) reduce the value of capital assets, so as his polling advantage widens, you might expect to see stocks slide.

Worse still is the prospect that both of these effects are at work, since they would combine to form a woefully self-reinforcing trend.

The noise in the financial markets is a bit too seismic at the moment to reliably tease out any political cause-and-effect.  But until we see a McCain-friendly polling shift (and a corresponding turnaround in the Intrade price trend) without seeing a convincing and concurrent upside move in stocks (or vice versa), this is a potentially worrisome trend both for McCain supporters and anyone whose portfolio isn't stuffed in the mattress.

Presidential Debate #2: Post-Mortem

I call it a draw, with a slight edge to McCain on points.  McCain needed a decisive victory and for my money, he didn't achieve it.

He landed some good blows early on, both on tax policy and on the Republican-led, Democrat-obstructed attempts to rein in Fannie Mae and Freddie Mac two years ago (as well as the tremendous sums of protection money Obama receives).  McCain also closed with a decent "shining city on a hill" type moment.  But I don't know that anything that happened tonight will move the needle.

One bit of fact-check fodder: McCain asserted that half of small businesses would be hit with Obama's $250,000+ tax hikes.  Obama retorted that "only a few percent" of small businesses earn more than $250,000.

I took a cursory look through SBA, IRS, and Commerce Department statistics, but they're somewhat ungainly.  If you include proprietor's income, McCain's estimate is surely not only accurate but conservative.  Even excluding proprietor's income, though, I suspect the 50% figure is decently close.  It's certainly nowhere near Obama's "few percent".

The questions Tom Brokaw and his staff selected seemed even-handed enough, but overall, the format and moderation of this "town hall" was pretty lackluster.  A synthetic town hall event with questions being pre-screened at a ratio of 1,000,000:1 and almost no opportunity for back-and-forth between the candidates or follow-up interaction with the audience members was probably doomed to mediocrity and Brokaw did himself no favors by inconsistently enforcing the time limits and rebuttal restrictions.

The line of the night had to be Obama's acknowledgment that some people see him as "green behind the ears".

Sounds like a hygiene issue.  I thought Biden told us he was clean.

Obama's Marginal Tax Rate Hikes, by Income Level

Interesting representation of the impact of Obama's tax plan from The American (based on analysis by the Brookings Institution and the Urban Institute’s Tax Policy Center).

By "tax cuts for the middle class" Obama apparently means "40 percentage point tax hikes for the middle class."

These are marginal rates, not effective rates, so they apply to the next dollar earned by a taxpayer with a given AGI.  Still, as marginal rates, they can be described as the strength of the disincentive to earn more money.  With that in mind, the Obama plan appears to be hell-bent on yanking the ladders to prosperity out from under middle- and working-class Americans.

(HT: Marginal Revolution)

Hope + Change = 70% Tax Rate

Carterrific!

Obama’s Plan

Obama’s tax plan has two major components. First, he promises to end the Bush tax cuts, allowing the top two tax rates to return to 36 percent and 39.6 percent. Second, he promises to end the Social Security payroll tax cap for incomes above $250,000. Individuals making more than $250,000, therefore, would face a 15.65 percent tax rate from payroll taxes in addition to a top income tax rate of 39.6 percent for a combined tax rate topping 56 percent. Individuals living in cities or states with high taxes such as New York City or California would have tax rates approaching 70 percent, levels not seen since Carter was president.

Previously:  Battle Of the Proxy Incumbents

Click for larger size.

(HT: McQ)

Senate Comes Disturbingly Close To Passing Cloture On Windfall Profit Taxes

50 votes to invoke cloture and consider the Carteriffic idea of imposing a supplemental tax burden on the activity of oil refinement and distribution.  And those 50 didn't include Kennedy or Byrd (who are ill) or Clinton or Obama (who couldn't be bothered), all four of whom can be counted on to support the bass ackwards approach of penalizing Americans for engaging or investing in the production of a commodity, the availability and affordability of which we're ostensibly trying to increase.

The thought that the U.S. Senate is as few as 6 votes from a filibuster-proof desire to aim this gun at our own heads again is more than a little alarming.  To review:

In reaction to the rise of energy prices during the late 1970s and the removal of price controls on the energy industry, President Jimmy Carter signed the Crude Oil Windfall Profits Tax Act into effect on April 2, 1980.
...
[The Congressional Research Service] found the windfall profits tax had the effect of decreasing domestic production by 3 percent to 6 percent, thereby increasing American dependence on foreign oil sources by 8 percent to 16 percent. A side effect was declining, not increasing, tax collections.
...
The 1980 windfall profits tax was also found to be highly burdensome for the industry to comply with and for the Internal Revenue Service to administer, especially in years when no revenue was raised. It seems unlikely that a new tax could be designed in a less burdensome fashion. Tax Foundation economists estimate that U.S. companies currently spend nearly $150 billion annually to comply with the federal income tax alone. Enacting a new windfall profits tax would add an additional layer of complexity to the federal tax system.

Joining the unanimous Democratic caucus were three Republican Senators - Olympia Snowe (ME), Bob Corker (TN), and Gordon Smith (OR).

I must confess I struggle to conceive of what might account for so many objectively asinine votes.  A certain percentage can presumably be chalked up to old-fashioned stupidity - a genuine inability among some either to suss out the economic causality or to learn from the disastrous consequences of this precise mistake from the last go-round.  But skulls that numb - even in the upper chamber - couldn't number more than 10%.  At least a few others are likely all too willing to vote in favor of what they do recognize as dreadful policy, on the assumption that their constituents will laud the bill out of a knee-jerk hatred of oil companies and that it's far easier to pick up a torch and join that lynch mob than to 1) try to convince their colleagues and constituents that the policy is dreadful via their vast rhetorical and parliamentary prowess, or 2) make a principled vote if they're unable to sway the mob.  These basest of political animals might number another 25%.  Add in another 8% for the Freshman Democrats who can be expected to do as their told and 3% for a few wild RINOs and you still don't get to a simple majority (even before adjusting for the significant overlap among those groups), much less 54%.

Which legislative genus am I undercounting?

(HT: Power Line)

A Neighborly Blog Grapple

On Tuesday, I put up an unminced rebuttal to a post entitled "The official word on whether capital gains tax cuts increase revenue (it's no)" written by Justin Fox at Time .  Fox's argument, which was based on an odd interpretation of a new Congressional Budget Office publication, I declared the "Worst Argument Of the Day".

Today, Fox has put up a counter-counterargument, one only modestly less unsound than the original, in which he claims not to have made the claim I claim he made.  My critique, it turns out, had amounted to the "Worst Reading Comprehension of the Day" (hoist by my own zinger).

I dunno.  I've re-read everything for double negatives I might've taken as singles and wiped my monitor off with my sleeve, in case the specific arrangement of dust and smudges had caused certain words in Fox's post to resemble other, roughly antonymous words.

No such luck.  On reflection, I'm confident I managed to grasp the case he presented (the subtle clues in the title of the post were a helpful starting point).  The original argument (along with its natural policy extensions involving the efficacy of capital gains tax cuts) remains so deficient as to be irresponsible, particularly for a financial journalist of Fox's pedigree.

I won't heave it on you here, but for sake of posterity, I offered a counter-counter-counterargument over at Fox's place this morning, in response to the "Worst Reading Comprehension" post.

Some of the points of contention begin treading into esoterica, but this issue is one of very high significance over the next several months.  The major capital gains tax reform enacted in 2003 will expire in 2010 if it isn't extended/made permanent and the results of November's elections (Presidential and Congressional) will likely determine that outcome.

As I've discussed here in the past, those tax cuts (which followed up the first Bush tax cuts in 2001) almost immediately ushered in the longest period of consecutive job growth on record and added fuel to a brilliant recovery from the mild recession Bush inherited from Clinton, despite the economic shock of 9/11 having occurred just as the recession was ending.

Given the economic stage that had been set, the economic growth (3% per year, with not a single negative quarter), unbroken job creation (52 months, 19 longer than Clinton's longest stretch), and stock market appreciation (the S&P gaining more than 50%) that we've seen since the capital gains tax cuts have been staggering.

No, it doesn't deductively prove that capital gains tax cuts were the cause (or a necessary condition) of the unlikely expansion.  Nor does the fact that tax revenues from individuals soared 44% since those capital gains tax cuts deductively prove that such cuts generally do - when rates are high - increase tax revenues (we have to make do with sound economic theory, common sense, and the preponderance of empirical data if we want to swallow that one).  But there's also no data out there definitively debunking that proposition (or even, as far as I'm concerned, refuting it in a remotely credible way).

In this case, supply-side theory and empiricism (while both inexact) tend to support the same conclusion.  And given the high significance of the policy choices such conclusions inform, these are points that warrant belaboring (and occasional grappling).

Clinton [Sneakily] Introduces Windfall Profit Tax Bill

Don't be fooled by the sunshiney "tax holiday" language or her pandering to us beleaguered commoners who yearn for cheaper oil, if only our leaders would decree it.  The woefully misnomered "gas-tax holiday bill" is just the candy coating around Hillary's poison pill.  Or - if you prefer - the caramel coating around her poison apple.
 

The bill, which is to be co-sponsored by Sen. Robert Menendez (D., N.J.), would essentially implement the break in the gas tax on consumers while imposing a tax on oil companies to make up for lost revenue. Hattaway said it is unclear when the bill would come up for a vote, but added that the goal is to have the policy in place in time for the summer driving season, which is traditionally viewed as opening on Memorial Day.

Happily...

There’s virtually no chance Congress will approve a gas tax holiday before then–or at all. House Speaker Nancy Pelosi said Thursday that she, like Sen. Barack Obama, does not support the moratorium.

So we can take solace in the fact that this official business she's bringing before the U.S. Senate is just a feckless gambit in her Presidential campaign.  Which is nice.  A wholly inappropriate use of her office, yes, but nicer than the prospect of windfall profit taxes actually being enacted.

Hillary's been upping her oil company trash talk lately, too.  In her  two-night  O'Reilly Factor interview this week, she said:

"Unless we tax the oil companies, they will reap huge and undeserved windfall profits."

Ah... no, wait.  That was Jimmy Carter, shortly before the enactment of the 1980 windfall profit tax (a gross misnomer in itself, as it's actually a simple excise tax), which had the very predictable consequences of driving down production levels, lowering supply, and increasing prices.  It also yielded $300 billion less in revenues than had been forecasted (likely because the forecasters of record shared Senator Clinton's impressively fleeting grasp of tax policy that blithely ignores the effect of major behavioral incentives, including punishing those who engage in the refinement and distribution of petroleum products)).  But that relatively straightforward relationship between taxing oil production and forcing supply down and prices up doesn't hold a candle to the stump value of beating up on a perceived enemy, in this case, the evil oil companies, who reap "huge and undeserved" profits.

Back to Hillary's Fox News interview.  What she actually said was:

In the short term, I do want a gas tax holiday, but to pay for it by putting a windfall profits tax on the oil companies. ... Now look, what it means is that the oil companies have made out like bandits. ... And there is no basis for them to have these huge profits. They're not inventing anything new. ... You set a baseline, and above that baseline you begin to tax their profits.

(And by "begin to tax their profits" we can assume she meant to say "tax them above and beyond the 40%+ they already pay, in Exxon Mobil's case a record $30 billion in 2007 alone.")

You can see why I confused the quotes.  The scapegoating of the global condition of high oil prices down to the very personal level of a far-off boardroom full of wealthy jerks is a pleasant fantasy, especially if you've got a candidate who's willing to smack them around, strap them down, and bleed them a bit.

The bizarre presumption that Carter and Clinton share, of passing moral judgment on the size and appropriateness of companies' profit levels (and of wield federal taxing authority to redistribute those profits as they see fit) is a bold step in a very bad direction.

Happily, you don't need to follow the economic causality, and you don't even need to have an opinion on the rightful duties of government.  All you need is a history book that goes back 30 years to assure yourself that Clinton's lust for oil company profits is a sickly and dangerous one.

Maybe that's why she's tucking it away inside the (mostly vacuous, but ultimately harmless) "gas-tax holiday" bill.  Maybe she's learned to hide, if not suppress, these deviant fiscal urges.

The Clinton-Menendez bill may be a toothless one, but if it's any indicator of her prospective domestic policy agenda, get psyched for a return to "growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation."

---

Update: Captain Ed's got more on this.

Tax Freedom Day

Congratulations, America.  It's April 23 - you now have permission to start working for yourself.

Tax Freedom Day® will fall on April 23 in 2008, according to the Tax Foundation's annual calculation using the latest government data on income and taxes.
...
“Government continues to dominate the American taxpayer’s budget,” said Tax Foundation president Scott Hodge. “Americans will still spend more on taxes in 2008 than they will spend on food, clothing and housing combined.”

In 2008, Americans will work 74 days to afford their federal taxes and 39 more days to pay state and local taxes. Meanwhile, buying food requires 35 days of work, clothing 13 days, and housing 60 days. Other major categories are health and medical care (50 days), transportation (29 days), and recreation (21 days).

If you live in the NY/NJ/CT tri-state area, please disregard.  You've got a couple weeks of servitude left.

Here's a fun fact.  Under President Clinton, Tax Freedom Day shifted from April 20 to May 3 (+13 days).  Under President Bush, it's moved up from May 3 to April 23 (-10 days).  Those were the biggest jumps forward and back in more than 60 years.  Only 4 Presidents of the last 11 managed to avoid delaying Tax Freedom (all hailing from the same party).

I know what you're going to ask.  And yes, there is a music video.

The Ugliest Chart You'll See All Day

In a Wall Street Journal opinion piece, Reaganite John Cogan and Glenn Hubbard (architect of the 2003 investment income tax cuts) ponder the coming tax bomb, waiting to detonate should one of the Presidential candidates who don't support extending such cuts (hint: there are two of them) be elected in November.

Letting the Bush tax cuts expire will drive the personal income tax burden up by 25% – to its highest point relative to GDP in history.

This would be the largest increase in personal income taxes since World War II. It would be more than twice as large as President Lyndon Johnson's surcharge to finance the war in Vietnam and the war on poverty. It would be more than twice the combined personal income tax increases under Presidents George H. W. Bush and Bill Clinton. The increase would push total federal government revenues relative to GDP to 20%.

Why this large tax increase? The tax code changes enacted in 2001 and 2003 are scheduled to expire at the end of 2010. If they do, statutory marginal tax rates will rise across the board; ranging from a 13% increase for the highest income households to a 50% increase in tax rates faced by lower-income households. The marriage penalty will be reimposed and the child credit cut by $500 per child. The long-term capital gains tax rate will rise by one-third (to 20% from 15%) and the top tax rate on dividends will nearly triple (to 39.6% from 15%). The estate tax will roar back from extinction at the same time, with a top rate of 55% and an exempt amount of only $600,000. Finally, the Alternative Minimum Tax will reach far deeper into the middle class, ensnaring 25 million tax filers in its web.

Much more here, where Hubbard and Cogan make the case that growth, not redistribution, is the best way not only to weather economic storms, but to invite long-term prosperity throughout the economic spectrum.

(Well-timed too, a week before April 15th and two weeks before Tax Freedom Day.)

Bar Stool Economics

A friend of mine emailed me this today.  Any of these complaints sound familiar?

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

‘Since you are all such good customers, he said, 'I'm going to reduce the cost of your daily beer by $20.’ Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men, the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings) .
The seventh now pay $5 instead of $7 (28%savings) .
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to  drink for free. But once outside the restaurant, the men began to compare their savings.

'I only got a dollar out of the $20,' declared the sixth man. He pointed to the tenth man,' but he got $10!'

'Yeah, that's right,' exclaimed the fifth man. ' I only saved a dollar, too. It's unfair that he got ten times more than I!'

'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!'

'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!'

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important, They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore.

In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia

At Texas Debate, Hillary's So Wrong, She's Accidentally Right

Hillary Clinton attempted to take an economic swipe at John McCain's fiscal policy tonight by attacking his position on the Bush tax cuts.  By blatantly mischaracterizing his initial position on those tax cuts (claiming he supported them, whereas he was one of two Republicans who did not) and wrongly maligning the cuts as "wasteful", she pulled off an impressive double fallacy which inadvertently landed her on the correct side of the argument - one of opposition to McCain's initial stance on the Bush tax cuts.

Congratulations, Senator!

Stephen Spruiell put it well.

Fact Error + Oxymoron = ...

... Hillary claiming that John McCain supported Bush's "wasteful tax cuts." (McCain opposed them at the time but supports making them permanent now.)

That Hillary would call tax cuts "wasteful" is incredibly revealing. Why let taxpayers "waste" their own money when the she can think of so many wonderful ways to spend it?

2004: Global Test, 2008: Global Tax!

A few days ago, when rookie change-talker Barack Obama began to open his ideological Kimono, I quickly realized life had been sweeter before we saw what was underneath.

Today, the faint-of-heart are advised to look away from another hair-raising glimpse of what the silver-tongued changeling has in store.

A nice-sounding bill called the “Global Poverty Act,” sponsored by Democratic presidential candidate and Senator Barack Obama, is up for a Senate vote on Thursday and could result in the imposition of a global tax on the United States. The bill, which has the support of many liberal religious groups, makes levels of U.S. foreign aid spending subservient to the dictates of the United Nations.

Senator Joe Biden, chairman of the Senate Foreign Relations Committee, has not endorsed either Senator Barack Obama or Hillary Clinton in the presidential race. But on Thursday, February 14, he is trying to rush Obama’s “Global Poverty Act” (S.2433) through his committee. The legislation would commit the U.S. to spending 0.7 percent of gross national product on foreign aid, which amounts to a phenomenal 13-year total of $845 billion over and above what the U.S. already spends. ...

The bill defines the term “Millennium Development Goals” as the goals set out in the United Nations Millennium Declaration, General Assembly Resolution 55/2 (2000).

The U.N. says that “The commitment to provide 0.7% of gross national product (GNP) as official development assistance was first made 35 years ago in a General Assembly resolution, but it has been reaffirmed repeatedly over the years, including at the 2002 global Financing for Development conference in Monterrey, Mexico. However, in 2004, total aid from the industrialized countries totaled just $78.6 billion—or about 0.25% of their collective GNP.”

Perhaps... but that doesn't mean we need to enact a law that surrenders this sovereign power over to the U.N.  Never mind the fact that the U.S. is already far and away the world's largest donor of foreign aid - public and private - shelling out well over $100 billion per year (more than $1,000 per household).  Turning your own purse strings over to the U.N. (arguably the least financially responsible organization since the dawn of man), when the purse has nearly a trillion dollars in it, shows flabbergastingly bad judgment.  I suspect Americans will continue to decide what to do with those hundreds of billions of dollars, Senator.  Whether and to whom a country decides to donate these gargantuan sums of money is not a prerogative to be surrendered in a fit of global sycophancy in the name of "restoring our standing."

But that hasn't stopped eight of Obama's Senatorial colleagues (Joe Biden, Maria Cantwell, Chris Dodd, Richard Durbin, Russ Feingold, Dianne Feinstein, Chuck Hagel, Richard Lugar, and Bob Menendez) from putting their own names to this legislative lickspittle.

(HT: LGF)

McCain Neatly Sums Up His Lack Of Credibility On Tax Cuts

This may come as a terrible shock, but the only non-Lincoln Chafee Republican Senator to vote against the Bush tax cuts is running for President (as a Republican, no less).  Now that the tax cuts have to be recognized as being irrefutably and wildly beneficial to our economy, Senator McCain would like to settle any ambiguity about his fiscal disposition.

SEN. MCCAIN: "I've been involved in all of these issues.  I know how to stop the irresponsible spending. I've always been for tax cuts.  I have always... er, uh... although I voted against the first tax cuts, but these tax cuts have to be made permanent..."

Want Population Growth? Lower All Taxes (Except Sales)

A couple weeks ago, The Wall Street Journal published an interactive feature on state-by-state population data, as compiled by the Census Bureau.  The study looks at the net population growth for each state during the twelve months ended July 1, 2007 and offers some insights into domestic migration trends.  While the U.S. population increased 1.0% during the observed period, the growth rate at the state level ranged from -0.4% to 2.9%.

Generally, the trends were familiar.  The fastest growing states were in the interior west (Nevada, Arizona, Utah, Idaho), while the slowest growing (or even contracting) populations tended to be in the midwest and northeast (Michigan, Ohio, Rhode Island, Vermont, New York).  But there's such great disparity among the growth rates (even among neighboring states) that macro-regional conditions don't seem to fully account for it.

Turns out there's a whole class of population growth drivers that can shed additional light.  A hint?  It rhymes with "facts is" (according to Steve Miller).

The good people at the Tax Foundation publish an annual scorecard of state business tax climates, ranking each on an overall basis and specifically on corporate taxes, individual income taxes, sales taxes, unemployment taxes, and property taxes.  In their words:

States with the best tax systems will be most competitive in attracting new busi­nesses and be the most effective at generating economic and employment growth.

Although the market is now global, the Department of Labor reports that most mass job relocations are from one U.S. state to another rather than to an overseas location. This means that state lawmakers must be aware of how their states' business climates stack up to others in their region and nationwide.

I compared the Tax Foundation business tax environment data with the Census Bureau population growth data to see if anything useful would pop out (my hypothesis being that more punitive states would lag national population growth and more competitive, lower-tax states would thrive).

Just by comparing the 50 states' tax climate ranks with their population ranks, a general correlation emerges.  Broadly speaking (as any Sim City mayor can attest), states with harsher tax climates see a drain on their population (versus the national average), while more accommodating states see faster growth.

Some edge cases and other notables are highlighted and labeled.

Admittedly, the fit is far from perfect.  Relative tax rates certainly aren't the only (or even dominant) driver of migration decisions.  But given that few people probably give it meaningful conscious thought when considering a move (relative to lifestyle, family, and broader regional factors, anyway), it's notable that there is a discernible correlation at all.  The R-squared value for the linear regression of the data is 0.33, meaning fully one third of the variability in a population growth rank is explained by the states' tax ranks.

The degree to which people are deliberately fleeing punitive states in favor of lower tax environments is harder to gauge, but my guess would be that the correlation owes more to a differential in job creation (i.e. states with less punitive tax schemes not only attract new business, but enable those businesses to be more profitable, create more jobs, pay their employees better, etc., which in turn drives migration at the individual level).

As noted, the Tax Foundation rankings consider 5 tax categories (corporate, individual, sales, unemployment, and property).  They also rank the states according to each of these categories in isolation.  4 of the 5 tax classes showed similar correlations with the population growth data (higher taxes yield lower growth).  The most significant relationship was between property taxes and population growth.  Despite the relationship breaking down somewhat in the middle of the pack, at the extremes (particularly among the highest-tax states), the correlation is easily visible.  With an R-squared of 0.26, more than one fourth of the variability in population growth rate is explained by property taxes alone.

Of the 14 states with the highest property taxes, all saw slower (or even negative) growth, relative to the country on the whole.

Only one tax category showed a negative correlation between tax climate rank and population growth.  While the effect was minor, states with higher sales taxes tended to have higher population growth.  This isn't terribly surprising, as consumption taxes tend to be the least "progressive" (i.e. flattest) and thus least punitive taxes, relative to income.  Moreover, states with higher sales tax rates tended to be less punitive across other tax classes and to have better overall tax climate ranks, so it stands to reason they'd enjoy better population growth.

I'll take a look at re-running the analysis using more granular data from the Tax Foundation study.  Using the rankings as correlation data is illustrative, but it ignores the magnitude of the differentials among the states, which might yield stronger correlations and better insights within the individual tax categories.

Even in this relatively crude fashion though, the comparison seems to offer a fairly clear roadmap for states that want to stem population declines and become more competitive.  Even during a year when housing turmoil and widely disparate regional economic conditions likely played an unusually large role in shaping migration trends, state tax policy remained a powerful economic lever.

The implication isn't complicated, but it's nonetheless too narrowly recognized and embraced.  Clobbering businesses drives people away, while encouraging wealth creation by punishing it less invites people in.

McMaverick Gets Snippy Over Taxes As Second NH Debate Looms [Video Added: Mitt Wins Huge]

I suggested on Thursday that Romney ought to spend the weekend (and the debates) doing little other than bashing McCain on this issue, and McCain's discomfort in discussing it only lays barer his vulnerability here.

McCain's tax record is the perfect specimen of the arbitrarily ankle-biting maverickdom that makes him so far out of the Republican mainstream and such a frequent party pariah.  And his double-speak about standing by his opposition to the 2003 tax cuts, while simultaneously supporting their extension, becalms whatever wind he had in his "Mitt's a flip-flopper" sails.

John McCain forgot to take his debate game face off when he testily engaged a New Hampshire voter at a campaign event today.

The voter, a registered independent who didn’t identify himself, asked McCain why the Arizona senator changed his position on President Bush’s first-term tax cuts and said McCain was in “purgatory” with independents for not being fiscally responsible enough. McCain voted against the tax cuts when they were passed in 2001 and 2003, but now thinks they should not be rolled back. “I don’t believe increasing taxes is anything that we can do for the American economy right now,” he said.

The senator then bristled at the notion that he changed his position — a charge he zinged at Mitt Romney at Saturday’s debate. McCain interrupted the questioner at least twice.

The soft-spoken man, who said he has supported McCain since the senator was “at 3% in the polls” said, “it was just a huge disappointment to see you change your position. I’m just,” then the senator cut him off.

“First of all I didn’t change my position,” McCain said. “But go ahead. You can say it, but it’s not true. But go ahead.”

I'll be watching (but not live-blogging) tonight, so I'll point you to the usual haunts.  Michelle's debate thread is up and running and Hot Air will likely have a series of video posts in addition to the primary thread.  And I presume that Mary Katharine Ham will once again be blogging at the scene.

Update:  That's the stuff.  Highly effective contrast offered by Romney tonight, not only on the tax issue, but executive leadership and general class warfare, all of which served him well against Huckabee and McCain.  The post-debate segment with pollster Frank Luntz and a roomful of New Hampshire undecided voters suggests Mitt hit it out of the park.  The overwhelming majority of them changed from undecideds to eager Romney supporters by the end of the night.

Voo Doo Doo Doo, Voo Da Da Da...

Rudy's latest radio spot is a pro-growth toe-tapper.

"There's no question.  Taxes go down, revenues go up."
...
He'll cut taxes:  lower incomes taxes, reduce business taxes, and do away with the marraige penalty and the death tax for good.

It's almost enough to sway one's affections from the thus far most convincingly growth-friendly Mitt Romney.  "Make the investment income tax cuts permanent" (or, better still, "Drop rates to 0%," as the dreamy Romney proposes) is curiously absent from the list, the only thing standing between this ad and supply-side perfection.

(HT: The Hill)

GOP Ways and Means Delegation Continues To Crumble

Bad news, methinks.  With such a thoroughly unserious lawmaker as Charlie Rangel in the chairman's seat, these departures couldn't come at a worse time.

Rep. Jim McCrery of Louisiana, the ranking Republican on the Ways and Means Committee, will not run for re-election next year. McCrery is the highest ranking Republican to announce his retirement since Democrats took control of the chamber. A congressional source who spoke on the condition of anonymity said family pressures coupled with increasingly low expectations that Republicans will win control of the chamber next year contributed to McCrery’s decision to leave.

McCrery was not rumored to retire, so his surprise exit will surely prompt maneuvering among lawmakers on the powerful tax writing panel for the top slot. Rep. Wally Herger (R., Calif.) is next in seniority, but Republicans do not follow strict seniority rules to dole out committee assignments. McCrery is the third member of the committee, along with Reps. Jim Ramstad (Minn.) and Jerry Weller (Ill.) to announce their retirement this year. McCrery was known for a gentler style than his predecessor Rep. Bill Thomas (R., Calif.). McCrery was poised to take the gavel before Republicans were swept into the minority in both chambers in the 2006 elections.

Rangel's recently proposed trillion-dollar "mother of all tax" hikes and his unambiguous intent to allow the 2003 tax cuts to expire in 2010 leaves the health of the U.S. economy hinging on this peculiar man's ability to push his peculiar ideas through to the Senate floor.  If Republicans are unable to recapture the House majority next year, we'll need to have as many powerful and persuasive minority members on Ways and Means as possible if we want to keep Charlie from going completely off the rails.

McCrery's farewell is a disappointing step backward on that front.  He does tend to vote with the porkers, but he's rock solid on taxes and I'll take that combination over the inverse in a heartbeat.

Pretty Soon, You're Talking About Real Money

For the last few months, Nancy Pelosi and Harry Reid have been fighting with the President over $450 billion in additional spending the Congressional leaders want to use to further swell the federal bureaucracy over the next ten years.  Both Reid and Pelosi have both dismissed this gap as "very small", suggesting Bush's veto threat is petty and purely partisan if it hinges on such an insignificant amount of money.

Today, the Republican Study Committee put out a press release pondering the number 450,000,000,000, noting (among other things):

• $450 billion amounts to a six-year repeal of the AMT,
  ...
• $450 billion is twice the amount needed to make the capital gains and dividend tax relief permanent,
• $450 billion is nearly the same amount needed to protect the non-interest portion of the Social Security surplus over the next five years.

Next year alone, the Reid/Pelosi plan would inflict $23 billion of extra federal government on us, enough currency (per the RSC's calculations) to stretch to the moon and back 5.5 times.

Unfathomably large numbers can be difficult to fathom, which is something big spenders count on.  After all, if $450 billion is a forgettably small fraction of some other, truly unwieldy figure (in this case, all federal spending over the next ten years), then why concern ourselves with it?

Given the enormity of the aggregate tax revenues the federal government plans to wring from the citizenry over the next decade, would anyone even feel another $450 billion?

Here are some more fun facts that enable us to return from the land beyond fathom to more meaningful numbers.  There are roughly 100 million households in the U.S.  So the "very small" amount that Reid and Pelosi believe to be so trivial as to be worth less than the time it takes to quibble over it comes to about $4,500 per household.

What does $4,500 mean to a typical American household?

• A year's worth of groceries
• Three years' worth of gasoline
• Two Christmases
• One child's orthodontia
• Three months of mortgage payments
• Five months of rent

It's not "very small".  It's huge.  And its impact on American families will be meaningful.  Legislators, you're paid arguers.  Stay late and hash it out on the merits, but don't try to scuttle it past us without bothering to support it, on the theory that it's an insignificant amount of money that's not worth arguing over.

Universal Health Scare

Maryland's Democratic Governor Martin O'Malley has signed into law $1.3 billion in new taxes.  The law will increase [bracketed percentages are mine]:

The state sales tax and vehicle titling taxes from 5 percent to 6 percent [20%], raise the corporate income tax from 7 percent to 8.25 percent [18%], increase the state income tax rates for high earners [5-16%], and double the tobacco tax to $2 [100%] per pack of cigarettes.

The new taxes will fund a $600 million health care plan, which will cover 100,000 residents, about 12% of the state's uninsured population.  At $6,000 per uninsured resident, this is a notable data point when considering the array of universal (that is, socialized) health care proposals of the major Democratic Presidential candidates.  With 47 million uninsured Americans, we should expect the costs of these universal health care plans to approach $300 billion, three times the size of Senators Clinton and Edwards' plans.

The candidates plan to pay for their health care plans by eliminating many of President Bush's tax cuts.  I'm doubtful this would cover the entire costs of their programs, but that's likely a second-order concern to the loss of the economy-stimulating tax cuts.  Universal health care would weigh down the economy on its own but offsetting it with the tax cuts is a pending economic disaster.

Update [Flip]:  Further to Gindu's point, "paying for" socialized healthcare benefits by "rolling back tax cuts" (read: raising taxes) is at best a temporary reality.  Gindu noted the anti-growth impact of raising taxes.  When that inevitably curtails output/income growth, it will likewise curtail tax receipts.  As Art Laffer accurately predicted, pro-growth tax cuts actually serve to increase tax revenues when established tax rates are high enough (which they are).  Just as inevitably, "rolling back" those tax cuts will serve to lower associated tax revenues in the medium- and long-term, leaving fewer tax dollars available for funding soft-socialist policies.  It's lose-lose, pareto-inefficient, bad for everyone.

Die hard socialized medicine proponents will tell you that the inevitable decline of prosperity throughout the economic spectrum is worthwhile, given the universal access to quality medical care that all Americans will enjoy under socialized healthcare.  What that already problematic claim ignores is the unavoidable decline in the quality and availability of that care.  There's a reason well-heeled Canadians and Europeans (with their utopian healthcare systems) come to the United States when they need vital healthcare procedures.  Our system (while imperfect) produces the best, most innovative, most available tapestry of healthcare services in the world.

It's no coincidence that the only industrialized country without socialized medicine (another truism lamented by socialized medicine fans) is the country with by far the greatest life-saving, life-extending, life-improving healthcare capacity in the world.

Despite overwhelming evidence confirming the robust efficacy of the free market, socialized healthcare proponents like to say that healthcare is too important to be subjected to market forces.  Conscientious students of economics, history, and comparative government, however, know it's too important not to be left to the market.

Not Buying Huckabee's Fiscal Bona Fides?

I know he's not Club For Growth's favorite and his fiscal record in Arkansas is mixed, but back in March I noted that Mike Huckabee became the sixth Republican Presidential candidate to sign the Americans for Tax Reform's "Taxpayer Protection Pledge", the gold standard in counter-tax assurances.

Sixth, you say?  How unexceptional.

Perhaps.  But it's worth pointing out that four of the other signers were Gilmore, Brownback, Tancredo, and Hunter - the first two of whom have withdrawn, the other two of whom are barely blips on the polls.  Among the five serious contenders (Romney, Giuliani, Huckabee, Thompson, and McCain), to date, only Mitt Romney joins Huckabee in signing the pledge.

Three Republican presidential candidates have not signed the pledge, which one strategist said might hurt them during the primaries.

"I worked on Bob Dole's campaign in 1988 and he didn't sign and it killed his campaign in the final week," David Johnson, a Republican strategist and president of Strategic Vision. "That's how the first President Bush was able to turn around and win the New Hampshire primary."

New York Mayor Rudy Giuliani, former Tennessee Sen. Fred Thompson and Sen. John McCain (R-Ariz.) have not signed the pledge.

Those three argue that their fiscal records speak for themselves and Rudy makes the decent point that, "You take one pledge as president of the United States. It's to uphold the Constitution of the United States."

Well... actually, that's not the decent point specifically (upholding the Constitution and holding the line on taxes aren't mutually exclusive), but rather its logical extension, namely that if you start signing some pledges, then not only do you invite countless other groups to shove pledges in your face, but you might create a tacit disavowal of any pledge you then elect not to sign.

Still, Americans for Tax Reform is no fringe-dwelling, fly-by-night advocacy cult and the pledge is signed by hundreds of Senators, Representatives, state legislators, and Presidential candidates.  The unspoken extension of Rudy's point notwithstanding, none of the unsigned GOP candidates would be harmed by a boost to their fiscal credibility at this point and their refusal to sign the pledge is a legitimate issue on which they should be pressed by primary voters.

And if you're still not convinced Huckabee is someone worth considering, talk to Chuck.

Lou Dobbs Is a Boob

While I can count the minutes of CNN I've watched this year on one hand, I happened to flick through it last night during the 7th or 8th hour of "The Situation Room" and was swiftly reminded why that channel's not part of my news diet.

The panel was busy agreeing with each other that this Congress is so feckless only because it's failed to do the one thing Americans want them to do - ram through surrender in Iraq.  Lou Dobbs took a little detour to riff on the general stupidity of Congressmembers and offered this gem:

The American people are tired of being screwed, to put it quite simply. The fact is that we're watching a Congress that can't agree on the resolution of the average minimum tax. They can't agree. A Democratically led Congress can't agree to tax at an equitable rate. The executives of hedge fund operators who are putting their money offshore. We are watching public education fail in this country -- fail an entire generations of Americans. We are watching idiots in both political parties absolutely destroy the American dream.

Here's a tip: if you're not familiar with an acronym, have someone look it up for you before wielding it to club people as stupid.  In this case, AMT is "alternative minimum tax".

Laffing All the Way To the White House

Republican Presidential candidates, GOP primary voters, and the American public in general should be paying a lot more attention to Art Laffer.  For all I know, they're paying plenty of attention to Laffer, but it's hard to pay too much attention to him, so I'll stand by my assertion that everyone should be paying more.

There are few living standard bearers with more credibility, cachet, or intellectual capital in the area of sound, pro-growth  fiscal policy than Laffer, one of the principal architects of something-d-o-o economics and thus of not only our own prosperity, but that of numerous far-flung post-socialist states now more unabashedly free market capitalist than the United States.

Responding to a boldly asinine, refreshingly illogical argument by redistributionist Jonathan Chait at The New Republic, Laffer recently published a response (pdf) that not only dispenses with the foolish policy implications of Chait's soft-socialist sensibilities, but offers us a refresher course on why supply-side economics works, promoting prosperity by facilitating (or rather, simply getting out of the way of) sustainable growth, while the ostensible charity of resdistributionist strategies typically harm most immediately those they purport to help.

We are approaching the most critical presidential election in a generation, and the voice of the Left is gaining prominence. As the timeless growthist vs. redistributionist debate once again takes center stage, it will be crucial to see the truth. This paper is a first step in that direction. Then, in preparation for a potential Democratic victory in 2008, we’ll soon publish an indepth analysis of historical asset market responses—magnitude and timing—to anti-growth policies.

Summary

• This paper serves as a response to a recent The New Republic article by Jonathan Chait which criticizes the supplyside economics movement and lays out the typical redistributionist’s case for raising taxes on the rich.
• While the article refers to supply siders as “wingnuts,” the tenets of supply-side economics—low taxes, sound money, free trade, reduced regulations, etc.—have been adopted (successfully, I might add) in the U.S. and across the globe.
• The best way to help the poor is not to make the rich poorer, but to make the poor richer. All Americans as a whole have gotten richer as a result of pro-growth supply-side policies. The economic and social gains of the past 25 years—across class, race and gender lines—speak for themselves. The irony is that many of the policies promoted by the Left would hurt the very classes of people whom the Left professes to champion.

Read it, then e-mail it to your favorite Presidential candidate.

(HT: Laffer devotee Larry Kudlow)

Job Growth Turns 50, Accelerates

The Department of Labor has released its preliminary report on October's employment summary,  estimating an increase in payroll employment of 166,000 during the month.

Job creation has been not only positive, but accelerating over the last four months.  This seems like a good opportunity to check back in with Hillary Clinton in late September, when she lamented the woeful job market at a Women Impacting Public Policy meeting (the quotable comes just before the 5-minute mark in the video).

We could close this gap, create more employment at a time when our economy desperately needs more employment, and create millions of new jobs that will get us over this, you know, barrier that we're not creating jobs.  We lost 4,000 jobs in our economy last month.  We're not seeing the job creation.

The cherry-picked -4,000 anomaly turned out to be an inaccurate estimate, later revised upward to an increase of 93,000.

Today's report represents something of a milestone for the economy, as it marks the 50th consecutive month of positive job growth, a feat unequaled since the dawn of nonfarm payroll record-keeping (Reagan/Bush 41 came closest with their 48 month streak).

How we've managed to maintain a healthy economic footing for such an unprecedented length of time is of course anyone's guess.

Previously:
It's Official: Bush Economy Achieves Longest Period Of Job Creation On Record
D'oh! Economy Fumbles At the 1 Yard Line
47th Consecutive Month of Job Growth, 1 Away From Record
46th Consecutive Month of Job Growth
45th Consecutive Month of Job Growth
43rd Consecutive Month of Job Growth

Ron Paul: Closet Porker?

Viewed through the Club for Growth lens, GOP crazy man Ron Paul can actually be mistaken for a stable individual.  One with a generally admirable fiscal policy record.

• Voted for a resolution proposing a constitutional amendment requiring a two-thirds majority vote in both chambers to raise taxes
• Voted for a capital gains tax cut
• Voted for a bill to require Congress to replace the tax code with a simple and fair tax system
• Voted to cut taxes by $80 billion over five years
• Voted to override Clinton's veto and repeal the Death Tax
• Voted to override Clinton's veto and alleviate the marriage penalty
• Voted to repeal the tax on Social Security benefits
• Voted for the Bush tax cuts in 2001 and 2003
• Voted to permanently repeal the Death Tax
• Voted to extend the Bush tax cuts

Paul's also got a long history of voting against expansionary government spending, in keeping with his opinion that we ought to disband everything from the IRS to the military.  But the Club's new study of the radically pennywise Congressman's recent record reveals some curiously spendthrift moments.

Ron Paul's history contains some curious indiscretions, including a vote for $232 million for federally mandated election reform (only 1 of 21 Republicans to vote for it) and a vote against the line-item veto -even after it was modified to pass constitutional muster. Paul's record on pork was outstanding in 2006, voting for all 19 of Jeff Flake's anti-pork amendments in 2006, but his record took a stark turn for the worse in 2007, in which Paul received an embarrassing 29% on the Club for Growth's RePORK Card, voting for only 12 of the 50 anti-pork amendments.

Some of the outrageous pork projects Paul voted to keep include $231,000 for the San Francisco Planning and Urban Research Association's Urban Center; $129,000 for the "perfect Christmas tree project;" $300,000 for the On Location Entertainment Industry Craft Technician Training Project in California; $150,000 for the South Carolina Aquarium; and $500,000 for the National Mule and Packers Museum in California. This year, Ron Paul requested more than sixty earmarks "worth tens of millions of dollars for causes as diverse as rebuilding a Texas theater, funding a local trolley, and helping his state's shrimp industry."

In defense of his support for earmarks, Rep. Paul took the if you can't beat 'em, join 'em position, arguing that "I don't think they should take our money in the first place. But if they take it, I think we should ask for it back." This is a contradiction of Paul's self-proclaimed "opposition to appropriations not authorized within the enumerated powers of the Constitution."

It's Official: Bush Economy Achieves Longest Period Of Job Creation On Record

Redemption.

I lamented last month that the 47-month streak of consecutive job creation had apparently finally snapped.  According to the Labor Department's preliminary August reading, the economy lost 4,000 jobs that month, the first decline since August 2003.  This meant the duration of the economic boom (as measured by job creation) that followed Bush's 2003 investment income tax cuts had fallen just shy of the record-setting 48-month  streak that followed Reagan's 1986 tax cuts.

Today, however, not only does the Labor Department show a September payroll increase of 110,000, but it revised the August estimate from a decrease of 4,000 to an increase of 89,000.  At 49 months (assuming future revisions don't reverse September's gains), the Bush streak now stands alone as the longest unbroken period of job creation since we started tracking it in 1939.

Goldilocks is alive and well and she's the economic love child of George Bush and Glenn Hubbard.

Previously:
D'oh! Economy Fumbles At the 1 Yard Line
47th Consecutive Month of Job Growth, 1 Away From Record
46th Consecutive Month of Job Growth
45th Consecutive Month of Job Growth
43rd Consecutive Month of Job Growth

---

Update:   Here's Hillary, two weeks ago, speaking at the Women Impacting Public Policy's annual meeting, cherrypicking September's preliminary estimate to suggest the economy is not creating jobs.  (Skip ahead to 4:55)

We could close this gap, create more employment at a time when our economy desperately needs more employment, and create millions of new jobs that will get us over this, you know, barrier that we're not creating jobs.  We lost 4,000 jobs in our economy last month.  We're not seeing the job creation.

I'm seeing it.  I see 8.4 million jobs created since the tax cuts went into effect.  Even if the 4,000 decline in August had been accurate, it would've been the first month of negative job creation in four years (and a miniscule one at that, equal to 0.05% of the jobs created so far in this economic boom).

If an isolated decline of 4,000 in a single month was indicative of a desperate job market, I assume we'll shortly find the Senator publicly celebrating the dazzling grandeur that must accompany the revised increase of 89,000.