It seems that the Republicans have forgotten how to be Republicans. They might want to hold a mass séance with their patron saint, Ronald Reagan, who could remind them of some of the GOP’s cardinal rules—limited scope of government, the goodness of the free market, etc. The front runners among the Republican hopefuls for 2012 seem to have lost their way.
As Rick Perry hits the campaign trail, he has touted his Emerging Technology Fund (ETF) and the jobs created by start-up companies the fund has invested in. The ETF is essentially a venture capital fund operated by the State of Texas that invests in fledgling Texas
I’ve got a better question. Why does the State of Texas have a venture capital fund financed with public money in the first place? Maybe an even better question: Does Rick Perry, a Republican, not understand one of the basic tenets of his own party? I think Mr. Perry might struggle with the essay question ‘In 500 words or less, discuss the concept of limited government and the practical implications thereof.’ Oh well, he’s got good hair.
While Rick Perry touts his ETF, Michele Bachmann has promised, if elected, she’ll make sure American’s will pay $2 for a gallon gas. Now here’s someone who's publicly demonstrated their utter lack of understanding of how the free markets work. When pressed, Ms Bachmann has said she’d open up what are currently restricted public lands for oil and gas exploration. Experts differ on just how much oil and gas are trapped in public lands currently ‘off-limits’. The consensus seems to be that we have a lot of oil and gas, so opening up more public lands for production would be net-net a positive for the consumer. But for a candidate to set a very specific future price for a gallon of gas where that price is governed by so many international variables is either terribly naïve or terribly ignorant to basic economics. My guess is that Ms. Bachmann understands these forces better than her $2 per gallon promise would indicate, she's just telling us what she thinks we want to hear. Unfortunately, there's a lot of that going on these days.
As mentioned in prior postings, the Unrepentant Capitalist is neither a Republican nor a Democrat. Having said that, I expect the party that historically touts limited scope of government, the free market, and capitalism to have candidates that really understand and can articulate what those things mean.
Reading your blog for the first time and am really enjoying it. How about a post on your thoughts on the 999 tax plan?
ReplyDeleteFirst, I'm not a tax expert. I think I generally like it, but I see LOTS of problems in trying to implement 9-9-9.
ReplyDeleteFor a smooth transition, 9-9-9 would initially need to be revenue neutral meaning the amount the Feds take in today would need to be the equal under a 9-9-9 plan to minimize disruptions to government finances.
I'm not sure if Cain's plan subjects all purchases to the national sales tax or if certain 'life essentials' (food, basic clothing, etc) are exempt.
Critics are already bashing the plan as a tax break for the rich as 9-9-9 wouldn’t be as progressive as the current income tax scheme (progressive meaning higher income earners pay more in absolute terms and as a percentage of income v. lower income earners). This objection will probably ultimately kill 9-9-9 or just about any proposal with a flat tax component. New tax proposals can be negatively spun pretty quickly. To encourage job creation, Obama recently floated an idea to have lower capital gains taxes on investments in start-up companies that hire new workers. You can debate how effective that would be in creating new jobs, but it wouldn’t take long for people to spin that as another tax break for the rich as it’s more likely that the investors in question would be higher income types.
I am intrigued at the notion of getting away from income taxes and adopting consumption taxes. 9-9-9 would help that transition. There’s an old saying around public policy that says ‘you get more of what you subsidize, and less of what you tax’. For many years now, Americans have been criticized for spending too much, saving too little, and taking on too much debt. A more consumption oriented tax approach would discourage consumption and encourage (or at least not discourage) income, savings, and investment. A 9-9-9 plan or a flat tax would also mean homeowners would lose their mortgage interest deduction which currently, net-net, subsidizes debt.