The revelations of the Baker Campaign's interactions with Cahill's top aides will hurt Charlie Baker's candidacy (Cahill accuses ex-aides of plot to help Baker, Boston Globe, October 8th. 2010: A1).
He positioned himself as an ethical outsider who would go up to Beacon Hill and eliminate all the unsavory deals that lurk in the halls of the State House.
He is now implicated in one of the least savory deals of the past decade. To whom will his adherents turn?
Sent to Boston Globe
Friday, October 15, 2010
Friday, October 1, 2010
What are we fighting about? The impact of the Bush tax increases on the small business owner
What are we fighting about? The impact of the Bush tax increases on the small business owner.
The Republicans are claiming that allowing the Bush tax cuts to elapse will have an adverse impact on small business owners who do not incorporate; so they enter their business income on their personal 1040 Tax Form. The critics of the Administration's plan claim that it will reduce the small business owner's propensity to hire new employees and reduce their propensity to invest in new equipment.
These claims are false.
What is taxed is income. A firm's income is calculated after wages have have been paid to employees and after deductions have been taken for investments in equipment, land, and buildings. So taxes come after these deductions, so an increased tax (on net income) can have absolutely no direct impact on an owner's propensity to hire or to plow money back into the firm.
There is however a modest indirect impact. According to the National Association of Manufacturers, the average small business makes a profit of $600,000.
Under the present tax regime with 33% and 35% as the top two rates, if the owner filed jointly with a spouse and there was no other income, the tax owed would be $180,293.81. Under the new tax regime with a 36% rate for income over $250,000 and a top rate of 39.6%, the owner would pay $194,415.33, an increase of about $14,000.
If the owner wanted to maintain his or her current level of after-tax income, he or she would have to increase the firm's profit to about $620,000. In a firm that generates these levels of profit, $20,000 dollars is not going to have much impact on hiring and investment decisions.
For firm's below the average, the impact would be even smaller. It is only when firms get to make profits above $2,000,000 that we get into serious money: to maintain that lifestyle, the owner would need to increase profits by $100,000.0 so this might impact hiring or investment decisions.
So the truth is, allowing the tax cuts on incomes over $250,000 to expire will have little impact on most small businesses only on highly profitable firms and very rich owners will the impact be even noticeable!
Letter in Cambridge Chronicle, Sept 30, 2010.
Monday, September 20, 2010
Tuesday, August 24, 2010
Grow Jobs ... Shrink Government
In his op-ed "Grow Jobs, Shrink Government" (Boston Globe, August 18, 2010) Mitt Romney claims that the Republicans have other ideas apart from the "cut taxes" mantra.
A careful examination of the nine items in the brief agenda laid out by Mitt Romney show that three were revenue neutral (negotiate trade agreements, those these might result in tariff reductions; adopting an energy policy that reduces dependence on middle east oil, though Romney gives no indication of what such a policy might be and whether it would be acceptable to other Republicans; preserve our balanced labor and management rules and regulators), one would increase taxes (eliminate lobbyist inspired loopholes), one is ambiguous on the effect on taxes (align corporate taxes with other developed economies, but I assume he expects a reduction), while four unequivically involve reductions in taxes (preserve the Bush tax cuts, that will be a cut from the anticipated 20011 rates; accelerated write-offs for corporate investments; eliminate tax on dividends; eliminate tax on capital gains and interest).
It is clear that the more specific parts of Romney's program involve tax cuts. He never makes clear which government programs should be curtailed to avoid an increase in the National Debt.
Saddest of course is Romney's failure to note that policies similar to these were what the Republicans followed during eight of the last ten years that Romney deplores.
Sent to Boston Globe
A careful examination of the nine items in the brief agenda laid out by Mitt Romney show that three were revenue neutral (negotiate trade agreements, those these might result in tariff reductions; adopting an energy policy that reduces dependence on middle east oil, though Romney gives no indication of what such a policy might be and whether it would be acceptable to other Republicans; preserve our balanced labor and management rules and regulators), one would increase taxes (eliminate lobbyist inspired loopholes), one is ambiguous on the effect on taxes (align corporate taxes with other developed economies, but I assume he expects a reduction), while four unequivically involve reductions in taxes (preserve the Bush tax cuts, that will be a cut from the anticipated 20011 rates; accelerated write-offs for corporate investments; eliminate tax on dividends; eliminate tax on capital gains and interest).
It is clear that the more specific parts of Romney's program involve tax cuts. He never makes clear which government programs should be curtailed to avoid an increase in the National Debt.
Saddest of course is Romney's failure to note that policies similar to these were what the Republicans followed during eight of the last ten years that Romney deplores.
Sent to Boston Globe
Tuesday, August 17, 2010
Foreclosure Crisis
A recent news story (US Plans more aid for jobless homeowners, August 11, 2010) and John Carney's Op-Ed on Fannie Mae and Freddie Mac (Too big not to fail, August 11, 2010) contain the seeds of a good idea for the solution to the foreclosure crisis. Mr. Carney notes that overlooked suggestions for reform include encouraging banks to partner with homeowners in shared appreciation mortgages. Included in the additional aid are funds to enable "local aid groups to provide [interest free] bridge loans of up to $50,000 to eligible borrowers to help them pay mortgage principal, interest, insurance, and taxes for up to 24 months.
Let us combine these two ideas into a government financed and administered program. Our experience going through middle men for the government guaranteed student loan program was an expensive mistake.
Let the government absorb Fannie Mae and Freddie MAc and give them a new role. Entering into shared appreciation mortgages with distressed homeowners. With this version of a shared appreciation mortgage, the homeowner would pay what he or she could, the government would pay the rest.
With such a scheme there would be multiple winners:
* mortgage holders would get their promised stream of payments,
*government would finally get some traction in reducing the rate of foreclosures -- nothing has worked so far because getting multiple mortgage holders to agree on modifying the terms of a mortgage is virtually impossible; over time government might even build up some positive equity in the houses it co-owned,
* homeowners would continue to live in their homes,
*towns and cities would continue to enjoy vibrant neighborhoods.
All around it seems a sensible way to go.
Let us combine these two ideas into a government financed and administered program. Our experience going through middle men for the government guaranteed student loan program was an expensive mistake.
Let the government absorb Fannie Mae and Freddie MAc and give them a new role. Entering into shared appreciation mortgages with distressed homeowners. With this version of a shared appreciation mortgage, the homeowner would pay what he or she could, the government would pay the rest.
With such a scheme there would be multiple winners:
* mortgage holders would get their promised stream of payments,
*government would finally get some traction in reducing the rate of foreclosures -- nothing has worked so far because getting multiple mortgage holders to agree on modifying the terms of a mortgage is virtually impossible; over time government might even build up some positive equity in the houses it co-owned,
* homeowners would continue to live in their homes,
*towns and cities would continue to enjoy vibrant neighborhoods.
All around it seems a sensible way to go.
Bureaucratic Failure in the case of Shirley Sherrod
The indecent haste with which the Department of Agriculture engineered Ms. Sherrod's
resignation suggests a major failure in the bureaucratic protections that the Federal
Government has in place for its employees.
To be fired without any attempt to hear her side of the story, without a full
consideration of all the facts suggests gross incompetence in senior management of the
agency.
They should be disciplined.
--
resignation suggests a major failure in the bureaucratic protections that the Federal
Government has in place for its employees.
To be fired without any attempt to hear her side of the story, without a full
consideration of all the facts suggests gross incompetence in senior management of the
agency.
They should be disciplined.
--
Subscribe to:
Posts (Atom)