James Pethokoukis

Don’t fund healthcare by taxing capital

March 25, 2010

Washington will have difficulty producing a stranger bit of public policy than raising investment taxes to pay for healthcare reform. Remember, the consensus critique of the U.S economy is that it’s been plagued by too much consumption and debt. O.K., fine. So the answer is penalizing savings and investment? Really? Pure Bizarro economics for that and a number of other reasons:

Spreading the wealth

March 24, 2010

David Leonhardt of the NYT just noticed that tax rates are going up  and wealth is being redistributed. This makes him happy. But right now American faces a wealth creation problem. And if that isn’t working, every other problem facing America looks a lot worse. He also assumes that wealthier Americans won’t change their behavior, reducing the government’s take. Again, here is WH CEA Chair Christina Romer’s take on higher taxes when she was a econ prof at Berkeley: “Tax increases appear to have a very large, sustained, and highly significant negative impact on output … [and] that tax cuts have very large and persistent positive output effects.”

Why Washington will kill the market (or not)

March 23, 2010

The wise and wonderful Ed Yardeni gives bullish and bearish Money & Politics scenarios:

Should Obama’s econ team resign in protest?

March 10, 2010

They won’t, of course. Kind of extreme. But Cato’s Richard Rahn makes an interesting intellectual case:

The Obama Boom?

March 10, 2010

This Bloomberg story gives it the old college try with “Obama Defies Pessimists as Rising Economy Converges With Stocks.” It points out that the economy is expanding, job losses are down and stocks are up.

Where Obama’s deficit commission is headed

February 18, 2010

So, like, this thing isn’t going to work. You all know that, right? Rs pretty much have zero interest in higher taxes. Zero. And Ds pretty much have zero interest in cutting spending anywhere unless the money is shifted to some new program, as with healthcare. I read Greg Mankiw’s list of what Rs should get into turn for higher taxes

The jobs bill

February 12, 2010

1) Obama administration economists reckon the jobless rate will hover around 10 percent this year, and now say the U.S. economy will generate an average of just 95,000 jobs a month. That tallies with Team Obama’s forecast of anemic 3.0 percent GDP growth. Monthly job growth of 125,000 to 150,000 is needed to start bringing the unemployment rate down from its current 9.7 percent. That’s what would normally be expected more than two years after the onset of a recession. It’s not happening — at least not yet.

VAT Attack! Obama and middle-class tax hikes

February 11, 2010

As long-time readers know, I am convinced that the Obama administration is itching to slap the US economy with a value-added tax. Team Obama just needs to figure out how to do it politically. Listen to the POTUS in this BBW interview:

Obama bails on ‘cap-and-trade thing’

February 3, 2010

President Barack Obama is now calling the carbon trading scheme that is supposed to heal the planet a “cap-and trade-thing.” That can’t be a good sign for the concept.

Obama and middle-class tax cuts

February 3, 2010

The Tax Foundation thinks the White House is too sensitive about charges that middle-class taxes are going up: