A Quiet Windfall For U.S. Banks

Follow this link to read the Washington Post story on the recent Tax Ruliing by Treasury Secretary Paulson that gives banks an estimated $140 billion tax break.

It is hard to know what to make of this story.  If rescinding this decision would do great harm to the economy, then maybe it was not a bad decision.  Should Congress be in the business of making laws that wreck the economy just so they can exert their authority?

If it was a bad decision, then there ought to be a way to put it right without wrecking the economy.

Until this contradiction can be answered, then I don’t think we have enough information to decide what to do.  This news story is just the beginning of what we need to know.

Any comment from the tax and economic experts reading this post?

America Has the Second-Lowest Business Taxes In the World

Follow this link to an article and video about the claim that America has the second-lowest business taxes in the world.

I looked at the page in the  the Bush Treasury Department report the author claims “admits we have the second lowest effective corporate tax rate in the industrialized world”. It does seem to say what he claims. Of course, I am the one that came up with Greenberg’s Law of the Media, “If a news story has a number in it, it is probably misleading.” See if you can find anything that is misleading about David Sirota’s claims.

Why Not Lower The Gas Tax

Here is a link to an explanation of why we shouldn’t lower the gas tax.

As I noted in my response to the proposal:

If Hillary’s plan is to recoup the taxes by charging the oil companies in a different way, why would she think that they would lower the gas prices because the way they were taxed had shifted?I know I could make a case for it, but it is hardly a sure thing.

The other problem I have with windfall profits taxes is trying to figure out how you define a windfall profit.

Wouldn’t a windfall profit tax be anti-free market? The possibility of profits and losses is one way that the market has of pricing economic risk. We should think long and hard before fooling with this market driven mechanism.

Obama’s Thoughts on Economic Matters

MSNBC’s Maria Bartiromo interviewed Barack Obama mostly focusing on economic and business matters.

If you follow the above link, you will find videos of parts of the interview and a link to the full transcript of the interview.

The interview shows why I favor Obama over Clinton on these issues. His articulate answers make me believe that he really understands how things work and how they can be made to work better. He shows that he is not dogmatic and is willing to listen to ideas other than the ones that he has settled on at this time.

Specific proposals are always good. However, they may have a limited lifetime and they may get altered as they work their way through the political process. That is why I think it is more important to know that candidates understand how the world works than it is to know that they can regurgitate a specific proposal that advisers may have come up with.

It is important to know that Obama’s aim is to make the economy work for all instead of concentrating the benefits on a few. Whatever twists and turns his proposals have to take due to shifting circumstances, knowing the underlying principal gives me something to hold onto.