Obama Might Not Repeal “Bush Tax Cuts”

I’d be thrilled to see Obama renege on this promise.

WASHINGTON – An economic crisis, rising joblessness and a credit squeeze can make a president-elect refine his words. Today’s word is “repeal.” During his presidential campaign, Barack Obama promised to repeal President George W. Bush’s tax cuts for the wealthy ahead of their scheduled expiration in 2011.

It was part of how Obama would pay for an overall net tax cut aimed at low- and middle-income taxpayers, and an effort to bring what he called “fairness” to the tax system.

No one is talking tax hikes now.

Over the weekend, Obama said he has charged his new economic team with devising a plan that would create or preserve 2.5 million jobs over two years. He said the plan would include broad spending plans as well as the middle- and low-income tax cuts he described during the campaign.

Aides later said the plan would not include any of the tax increases Obama, as a candidate, had said he would impose on taxpayers who make more than $250,000.

We don’t need a tax hike right now.  And lest you think that the so-called “Bush tax cuts” were just for the rich, remember these points:

- a new 10% bracket was created for single filers with taxable income up to $6,000, joint filers up to $12,000, and heads of households up to $10,000.

- the 15% bracket’s lower threshold was indexed to the new 10% bracket

- the 28% bracket would be lowered to 25% by 2006.

- the 31% bracket would be lowered to 28% by 2006

- the 36% bracket would be lowered to 33% by 2006

- the 39.6% bracket would be lowered to 35% by 2006

- The EGTRRA in many cases lowered the taxes on married couples filing jointly by increasing the standard deduction for joint filers to between 174% and 200% of the deduction for single filers.

- Additionally, it changed the rate of tax on dividend income starting in 2003 to 5% for those in the 0% or 15% brackets, falling to 0% in 2008. It was lowered to 15% for all other brackets.

- Additionally, EGTRRA increased the per-child tax credit and the amount eligible for credit spent on dependent child care, phased out limits on itemized deductions and personal exemptions for higher income taxpayers, and increased the exemption for the Alternative Minimum Tax, and created a new depreciation deduction for qualified property owners.

Are any of you benefiting from any of these provisions?  I thought so.  Do you consider yourself rich?  Obama apparently does. 

On a related note, this is going to get old:

Asked Monday when those hikes might go into effect, Obama said, “Whether that’s done through repeal, or whether that’s done because the Bush tax cuts are not renewed, is something that my economic team will be providing me a recommendation on.”

It’s good to get advice from people, but what the heck has Obama been doing for the past few months?  Presumably he advocated repealing the tax cuts because he thought it would improve the economy and Americans’ lives.  Is that not the case?  Was he advocating something that he knew would hurt the economy?  Is he capable of making a decision without a panel of prestigious advisers for cover?  Like I said… this is going to get old. 

In any case, Obama should make the tax cuts permanent.  It would do more for the economy than any of these bailouts. 

Unemployment in Wisconsin

Hmmmm…. here’s an interesting thread.  First, there’s this story.

MADISON — Unemployed Wisconsin workers are being encouraged to go online to file claims for benefits.

A swelling number of claims played a big part in the public request, which came from the state Department of Workforce Development on Wednesday.

“Clearly we have an increase in claims. The claim numbers have risen 30 percent above the same week a year ago,” said Dick Jones, DWD agency liaison.

But then there’s this:

Department of Workforce Development (DWD) Secretary Roberta Gassman announced today that Wisconsin’s unemployment rate for October was 4.4 percent, unchanged from September. The rate was 0.2 percentage points up from the rate in October of 2007.

What happened to the 30% increase?  Looks like a very modest increase (thank goodness).

It sure seems like the moaning about overworked bureaucrats is a bit premature.

MMAC Sues Over Sick Pay Ordinance

Good luck.

The Metropolitan Milwaukee Association of Commerce’s board of directors voted unanimously today to proceed with a lawsuit to challenge the paid sick days ordinance that was overwhelmingly approved by voters in the city of Milwaukee on Nov. 4.

At the same time, 9to5, National Association of Working Women said it is confident that the ordinance will withstand a legal challenge.

Layoffs at NASCAR

Nobody is immune (except Wisconsin government employees, apparently).

Mass layoffs are expected throughout the NASCAR this week, as team owners from all three national series adjust to the economic crisis. It’s difficult to say how many will be put out of work, but some guess as many as 1,000 will lose their jobs.

The cutbacks are most evident at the top-level Sprint Cup Series, where layoffs began a mere two months into the season when BAM Racing stopped showing up at the track. Then Chip Ganassi let 71 people go when he cut down to two cars in July.

The numbers have steadily grown since, reaching all the way to the elite teams of NASCAR. Hendrick Motorsports, Roush Fenway Racing and Joe Gibbs Racing — three teams that combined to grab nine of the 12 spots in the Chase for the championship — have all gone through a round of layoffs in the past month.

It all paled to last Wednesday, when Dale Earnhardt Inc. gave pink slips to 116 employees so it could ease the way for a merger with Ganassi.

No Bonuses for Goldman Sachs Executives

This is good to see.

NEW YORK – Goldman Sachs Group Inc. CEO Lloyd Blankfein and six other top executives at the bank will not be receiving cash or stock bonuses for 2008, a spokesman said Sunday.

The decision was made by the seven executives themselves, said spokesman Lucas Van Praag, and approved Sunday by the Wall Street firm’s compensation committee. The executives made the decision “because they think it’s the right thing to do,” Van Praag said.

Congress Mulls More Power for Flailing Treasury

Does anyone get the feeling that Congress is pushing the Treasury Department to take as much action as possible in order to have a scape goat?

So says Congress: Treasury has done a terrible job of managing the bailout. That’s why Treasury should get expanded authority — for instance, to approve bank mergers.

Countries With Emerging Economies Want More Control

Looks like our friendly neighbors want more control over our economy.

Brazil’s President Luiz Inacio Lula da Silva said there was acceptance the G7 group of elite nations was no longer capable of working alone.

“It is time for a pact between governments to build a new financial architecture for the world,” he said.

“This is a global crisis and it demands global solutions.”

He said nations must “avoid temptations to take unilateral measures,” and stressed that “new universal mechanisms are needed” that have to be worked out in concert.

“The crisis gives an opportunity for real changes,” he said, adding: “We cannot, we must not and don’t have the right to fail.”

It’s inevitable that the global economy is linked - as it has been for thousands of years.  That fact does not mean that we should cede economic policy decisions to people who are not accountable to the voters and who likely don’t have the best interests of America in mind.

Oh, and they want a hand out too.

China and the Gulf states have trillions of dollars in reserves that could help the IMF help smaller countries withstand the present turmoil.

Paulson Shifts Course with Bailout

Wow. 

The government has abandoned the original centerpiece of its $700 billion rescue effort for the financial system and will not use the money to purchase troubled bank assets.

Treasury Secretary Henry Paulson said Wednesday that the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending. He also announced that the administration was looking at a major expansion of the program into the markets that provide support for credit card debt, auto loans and student loans.

[...]

The administration decided that using billions of dollars to buy troubled assets of financial institutions at the current time was “not the most effective way” to use the $700 billion bailout package, he said.

The announcement marked a major shift for the administration which had talked only about purchasing troubled assets as it lobbied Congress to pass the massive bailout bill.

The bailout money also should be used to support efforts to keep mortgage borrowers from losing their homes because of soaring default levels, he said.

From a good government perspective, this decision underlines the complete abandonment of our system of checks and balances.  The Congress ceded so much power to the Secretary of the Treasury that he can unilaterally decide how to spend hundreds of billions of taxpayer dollars.  That much power in the hand of a single, unelected member of the Executive branch would have been unthinkable to our Founding Fathers.

From a policy standpoint, this is a better plan than the taxpayers buying up a bunch of bad debt.  I still oppose the bailout, but if we’re going to do it, this is a better way.  Of course, the devil is always in the details, which are few and far between right now.

Why Bailout a Company With Bloated Compensation?

Mark Perry makes a great point.

Should U.S. taxpayers really be providing billions of dollars to bailout companies (GM, Ford and Chrysler) that compensate their workers 52.5% more than the market (assuming Toyota wages and benefits are market), 54% more than management and professional workers, 132% more than the average manufacturing wage, and 157% more than the average compensation of all American workers?

Maybe the country would be better off in the long run if we let the Big Three fail, and in the process break the UAW labor monopoly, and then let Toyota, Honda and Volkswagen take over the U.S. auto industry, and restore realistic, competitive, market wages to the industry. It might be the best long-run solution.

Hat tip Tom McMahon.

I don’t support sending any taxpayer money to the Big 3 without major structural changes in their organizations.  Heck, changing their compensation packages might make a bailout unnecessary.

Tories Announce Funded Tax Cut In Face of Recession

No, we won’t be seeing this in America. 

David Cameron is determined to get his party on to the front foot over tax after clear signs that the Government is planning its own reductions to be unveiled in the forthcoming Pre-Budget Report.

A senior party source said the new “funded” Tory tax cut, which could be announced within days, would be aimed at staving off unemployment. It would be a “recession-alleviating measure” and would be paid for by cutting government spending elsewhere, he added.

MillerCoors Cutting Milwaukee Jobs

This is the cost of headquarters leaving town.

MillerCoors LLC has cut around 270 jobs throughout the newly formed joint venture, including 100 positions in Milwaukee, as part of its goal of achieving $500 million in cost savings over three years, a company spokesman said Wednesday.

The 100 positions at the Milwaukee offices on W. Highland Blvd. were cut recently, MillerCoors spokesman Julian Green said. That leaves around 800 jobs at those offices, with 35 to 50 additional positions to be cut within the next six months, he said.

Wisconsin Businesses Worried About Democrat Domination

Yeah, I’m worried too. 

The biggest concern of many business leaders is that Democrats would be more inclined than Republicans to raise taxes to reduce the state’s $3 billion-plus budget deficit.

“We’ll see increases in every kind of state tax you can imagine,” said Brad Briney, president of the Independent Business Association of Wisconsin.

Wisconsin Manufacturers and Commerce, which has been at odds with Democrats for years, still hopes to pursue an agenda of improving the state’s economy, said president James Haney.

“We have an interest in creating jobs and getting the economy back on track,” Haney said. “Those aren’t partisan issues.”

The Metropolitan Milwaukee Association of Commerce expects to be “playing defense” on a number of its key issues, including school choice, said the association’s lobbyist Steve Baas. On the other hand, Democrats are more likely to support the MMAC’s efforts to establish a regional transit authority to run bus systems and the proposed Kenosha-Racine-Milwaukee commuter rail line, he said.

On health care, business and hospital executives expect Democrats to revive a hospital assessment that was proposed by Doyle and failed in the State Assembly last year. The Wisconsin Hospital Association supports the proposal that could bring about $400 million in additional federal money to the state.

Mayor Barrett Supports Increasing Mortgage Costs for Responsible People

No.

Milwaukee Mayor Tom Barrett has asked for a 60-day moratorium on foreclosures in a letter to Chief Circuit Judge Jeffrey Kremers.

A 60-day moratorium on foreclosures will result in people staying in homes that they can’t afford for an additional two months.  Guess who pays the cost of that?  The banks and mortgage companies.  Guess how they recoup those costs?  By passing on the costs to new mortgages in the form of higher interest rates.  In the end, the folks who can afford their mortgages will have to pick up the slack for this moratorium.  Everything has a cost.  

Delta Airlines Finishes Acquisition of Northwest Airlines

You have been assimilated.

Delta Air Lines completed its $2.8 billion acquisition of Northwest Airlines on Wednesday, turning two of America’s most storied airlines into the world’s biggest carrier.

Delta and Northwest closed the deal just hours after the Justice Department said it had no antitrust objections.

The company will keep Delta’s name, Atlanta headquarters, and chief executive Richard Anderson, who used to run Northwest. Delta executives said travelers will see no differences right away. New uniforms will be phased in next year, and Northwest’s fleet with its signature red tail will be repainted over the next two years, the companies said.

“I will tell you from a customer perspective and a frequent-flier perspective it is business as usual,” Anderson said.

The combined airline would carry more traffic than either Air France-KLM (currently the world’s largest) or American Airlines, the biggest U.S. carrier. But antitrust regulators rejected worries that the new Delta would hurt consumers, or competition.

Sell Your NFL Team Before Obama’s Capital Gains Tax Kicks In

Smart people make plans for the future. 

Dolphins owner H. Wayne Huizenga said Sunday no date has been set for selling up to 45 percent more of the team to Stephen Ross, but the presidential election is among the issues weighing on his decision.

That’s because a Barack Obama administration is expected to mean higher capital-gains taxes.

“He wants to double the capital gains tax, or almost double it,” Huizenga said. “I’d rather give it to charity than to him.”

Ross purchased 50 percent of the team and Dolphin Stadium for $550 million earlier this year with the intention he would eventually become majority owner. NFL owners approved the eventual transfer this month, meaning it can take place anytime.

“If you do it this year or you do it next year, the difference is humongous because of the taxes,” Huizenga said.