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The Baucus-Grassley Bill

Bulldog Pundit has a post at Ankle Biting Pundits about the Baucus-Grassley bill. BDP explains the bill to those of us who are "economically challenged."

It must be heartwarming to those in Washington that there is a new spirit of bipartisanship that is going to cure all that ails the country. What am I talking about? A bill currently being sponsored in the Senate by Iowa Republican Chuck Grassley and Democrat Max Baucus, which more than doubles the tax rate on private equity firms.

In typical Washington fashion Grassley and Baucus want to tax the bejessus out of these private equity firms, but don't have the guts to simply raise the tax on their profits. Instead they play the too-cute-by-half-game of basically treating partnerships as corporations and reclassifying their profits as regular income, rather than capital gains...

He quotes Larry Kudlow who says the bill punishes risk-takers and plays on class envy. Kudlow also talks about the irony of attempts such as this one being made when those around the world are moving toward supply-side tax cutting.
We better do something. Indeed, a tax-cut war is spreading across Europe, where lower levies on corporate profits in Spain, Germany, France, and Great Britain are aimed at better competing with America in the global race for capital. The successful supply-side experiment in Ireland has become a Euro-wide model. Average EU corporate tax rates have dropped to 25%, compared to America's federal, state, and local average of 40%. Newly elected French president Nicolas Sarkozy intends to cut his country's corporate tax, as does the prime minister of Spain, Jose Zapatero, as does Italian premiere Romano Prodi. All this would follow large business tax reductions in Poland, Slovakia, and Hungary.

Aren't the Democrats watching?

Out on the campaign trail, leading Democrats Clinton, Obama, and Edwards are all talking tax hikes. Senator Clinton says, "The president's irresponsible tax breaks for high-income Americans" must be allowed to expire. She then claims that the percent of taxes paid by corporations has fallen as corporate profits have skyrocketed. That's backwards. During the Bush boom, business tax collections as a share of overall tax revenues have skyrocketed -- well above levels witnessed during the Clinton 1990s.

Democrats are really fond of praising Europeans, and suggesting we follow their example, but when they do something actually worthy of praise Democrats want to do the opposite. Could it be that Democrats love taxes even more than they love Europeans?


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Comments (8)

I don't know much about Bau... (Below threshold)
Colorado KnightOwl:

I don't know much about Baucus, but Grassley is another reason that RINOs should be voted out of office asap.
When Harriet Meiers was announced for SCOTUS...Grassley appeared in front of a news camera and declared that Republicans were better than Democrats, because Republicans "don't listen to what their base is saying..." Thats why we vote Republican...so they can ignore us.

There is no doubt in my min... (Below threshold)
Cousin Dave:

There is no doubt in my mind that Democrats love taxes more than they love their own mothers.

I can't buy a chandelier (o... (Below threshold)

I can't buy a chandelier (or much of anything else for that matter) that's made in the U.S. We can thank the liberals for taxing almost everyone out of business - except the lawyers....

Democrats love taxes more t... (Below threshold)
That's a keeper:

Democrats love taxes more than they love their own mothers.
Posted by: Cousin Dave


Dems love the poor.<p... (Below threshold)

Dems love the poor.

That's why they try so hard to make more of them.

Larry Kudlow is to economic... (Below threshold)

Larry Kudlow is to economics, what Michael Moore is to the documentary feature. He's a fucking partisan shill. Numbers bounce off of his skull.

To be more concrete in my d... (Below threshold)

To be more concrete in my dismissal of this asshole: how many Fortune 500 companies pay any taxes whatsoever? None? Almost none? It's fair to tax the people that benefit from the exploitation of ginormous loopholes in the current system, until those loopholes are fixed. Then it might make sense to start comparing the United States to Ireland.

Actually, only eighty-two o... (Below threshold)

Actually, only eighty-two of the Fortune 500 companies showing profits in each year of the study you are citing - by the leftist Citizens for Tax Justice - paid no federal corporate income tax in at least one year of the three studied. The main complaint of the study was that most of those companies (only 275 of the 500 showed profits in every year from 2003-05) didn't pay the full 35% on their profits.

Naturally, this shows ignorance of the tax laws. Other deductions, credits, and deferrals, such as depreciation, have always served to lower the effective tax rate on corporations - just as deductions and credits lower the effective rate on individuals.

Slamming Kudlow, who has probably forgotten more about economics than you ever knew or will know, only underscores the vacuity of your bogus contentions.

Maybe you will go to school when you grow up. Do stop by again then. Write if you get work.






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