James Pethokoukis

Why Henry Blodget is wrong about taxes

April 6, 2010

Henry Blodget says he’s pretty confident taxes are headed higher to deal with the historic rise in federal spending  and agrees with Northern Trust’s Paul Kasriel that higher rates won’t be an economy killer. Blodget quotes Kasriel:

How America might get a VAT of its own

April 6, 2010

When will the other chaussure drop? Now that America has gone French (and German and British) with universal healthcare, expect Washington to eventually propose a European-style, value-added consumption tax to pay for it — as well as the rest of the historic rise in federal spending. But U.S. voters are in a severe anti-tax mood. It might take another financial crisis to give politicians the will and hubris to ignore them.

The other government mandate

April 1, 2010

Forget about being forced to buy health insurance. Aren’ t Americans pretty much forced  by our complex tax code to buy tax prep software or see an accountant? That is a mandate, too, notes Howard Gleckman of TaxVox:

Preventing the Great Stagnation

March 31, 2010

David Gitlitz, chief economist at High View Economics, has a thought or two about my “20-year bust” post:

7 reasons a VAT is a dicey proposition

March 29, 2010

My guy Pete Davis over at Capital Gains and Games unsheathes the katana and slices up the VAT. Not so easy to implement he says. A brief summary of his reasons (though read the whole thing, of course):

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.”

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 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:

Cutting spending vs. raising taxes

February 2, 2010

The Washington consensus is that taxes will go up sharply because there is no will to cut spending. Yet that may not be the view outside of the 202 area code.I just got back from a wing-ding at the Hoover Institution where economist Robert Hall quite matter-of-factly assumed big future spending  cuts because, in his opinion, Washington did not have the will to broadly raise taxes. Certainly, the new Obama budget sticks to the Dem pattern of only raising investment and incomes taxes on the so-called wealthy, at least transparently.