Immigration can speed economic recovery
– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. –
It’s welcome news that President Obama will turn his attention to immigration reform this year, as was announced on Wednesday by Deputy Assistant to the President Cecilia Muñoz. Economic recovery will happen more quickly if both high- and low-skill immigrants are permitted to enter the United States and work legally.
Two years ago, when Congress was considering comprehensive immigration reform, both President Bush’s Council of Economic Advisers and the Congressional Budget Office, headed by Peter Orszag, an economist closely identified with the Democratic Party, estimated that the benefits of additional immigrants outweighed the costs. If Congress allowed more immigration, then American taxpayers would come out ahead financially.
Yet, after Congress refused to pass President Bush’s plan to allow most undocumented workers to receive work visas and wait in line for citizenship, the Bush administration’s immigration policy deteriorated into a series of arbitrary raids on different companies, rounding up undocumented workers and deporting them, in many cases separating husbands and wives, parents and children.
We can do better. Although the unemployment rate reached 8.5 percent last month, the jobs are going to come back, and, as has been the case in the past, native-born Americans will want jobs that are different from those of immigrants, according to economics professor Giovanni Peri of the University of California at Davis.
Congress needs to overhaul immigration law and create an expanded temporary worker program with a path to citizenship, along with more verification to prevent workers from working illegally, and monitoring of tourists and students so that they do not overstay their visas.
Keep the charitable tax deduction
– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. —
The economy is in a painful slump. Growing numbers of people need help, charities are facing a decline in donations and states are cutting back on services. The April employment report from the Labor Department will show a further increase in the number of unemployed. Yet, rather than harnessing the generosity of Americans to help out, President Obama has proposed to reduce the tax incentives for charitable giving. He wants Congress to limit to 28 percent the tax saving from contributions for taxpayers who itemize their deductions.
Mr. Obama proposed to use the revenue gained to fund universal health care. He would make the 28 percent cap on the tax saving for contributions take effect in 2011, when he contemplates letting the Bush 2001 tax cuts for upper-income people expire. The combination of higher rates and a 28 percent cap on the value of deductions for charitable contributions (and mortgage interest) would diminish donations to charities ranging from local churches to national opera companies. Cutbacks on charitable giving would be more pronounced among the well-to-do, not only because they have more to give, but because their tax rates would rise at the same time as their deductions would be limited.
Mr. Obama’s proposal has resulted in opposition from not only charities, but also Republicans and Democrats in Congress.
According to Senate Finance Committee Chairman Max Baucus, a Montana Democrat: “I’m a little – especially concerned about the 28 percent limitation, which has nothing to do with health care.” And Senate Republican Leader Mitch McConnell said, “Congress should preserve the full deduction for charitable donations and look for additional ways to encourage charitable giving, not discourage it.”
Under the law now, if a taxpayer in the 35 percent federal tax bracket gives $100 to charity, he can subtract the $100 from his taxable income, reducing his total tax bill by $35. The after-tax cost of his gift is $65. (Relief from state income taxes might bring the net cost still lower.) If the value of the deduction is limited to 28 percent, the after-tax cost of the gift rises to $72, and the net result would be diminished giving.
In a March 24 news conference Mr. Obama argued that his change would add fairness to the tax system because the tax saving for those in the 33, 35 or 39 percent brackets should not exceed the saving for people taxed at 28 percent.
THE TRUTH ABOUT TAXES
As taxes go up the rich have less money to invest with. Less money to invest with results in less jobs created and increases the incentive for businessmen in America to send jobs overseas. I know being one of them. If my whole business goes over there what does that do for America?
The “smart” government knows that they must give the wealthy incentives to keep business growing in their respective countries. To do that the government offers tax-breaks to them as a reward for producing jobs. In this case the charity donations tax deduction. Reducing the charity donation tax deduction will force me to give less to charity thereby forcing me to seek other tax shelters and reduce costs of doing business.
The working man however is affected by emotion and rightfully so since employees are heavily taxed. This is because sadly our tax laws are written in the favor of those who are rich and that is because the rich produce jobs. Therefore you have people saying the rich shouldn’t get tax-breaks and people shouldn’t base their charitable giving based on tax deductions.
The only way to solve the tax problem in america is to go back to a national sales tax. This is how we got of out debt (thanks to the wisdom of Alexander Hamilton) before and if only the right people would listen we do so again.
May the Lord bless all who read this comment
Does it really matter whether the wall against the much much less affluent is built territorially? The pressure to reduce our standard of living, what a vaguely defined idea – is still there. This country doesn’t live on another planet. If the presure doesn’t come from within -it will come from without. Won’t it!
IT doesnt matter what side of the political spectrum describes the problem, the medical bills seem to doom any fix. I haven’t been able to afford it in years and at $1500/year and climbing I never will again. I called it quits when it passed $1500/year over 15 years ago.
I know people who hate illegal immagrants because they are themselves less productive, due to old age and ill health, and appreciate that they are in fact less valuable to the country than the able bodied and fully productive that are replacing them. They know they are not needed, are a burden on the system and were paid more their whole life than those who are replacing them. They may very well be costing the system more now than they were paid. Rather like decommsiioned old nuke plants, they cost more to dispose of then they actually were avble to produce during their working lives.
That’s where all the hatred is coming from and it do well for most of us to be more polite about the writer – she is only pointing out the situation. But it is obvious that she is proposing to write off a lot of the marginal citizen population in favor of fance jumpers and basically more ruthless but also brave and/or desperate, fresher, hungrier and more capable, illegal immagrants.
It’s such a stinking, raw and obvious statement about the tenuous grasp so many of us have on the homeland. I credit her with being somehwat “compassionate” but in a way that could well be strained to the point of raw violence as this situtauion is when seen in other countries of the world.
I think her point of view will win but the man who described the true bottom line – many of the new legals – if they ever become so, will quickly go either to the first class and the rest will still stay in steerage with a lot of native borns. Considering that productive labor in this country, both legal and illegal, is still surrounded by billions of much lower paid people whether they ever neter this country, will still pull the cost of living down and the age is driving the cost of actually being productive (profitable to the system) doesn’t look like it will ever be fixed.
The economist doesn’t mention the percentage of new immagrants destined for the upper decks and how many go down with the ballast? Rich people don’t keep many servatnst any more. They have been too expensive for almost a century.
My immigrant grandparents didn’t have health insurance. The system prospered because in many ways they were largely exploitable livestock with working brains.