Wonk Room

Conservative Class Warriors, Continued

Filed Under: Taxes

by Guest at March 31st, 2008 at 10:19 am

Conservative Class Warriors, Continued»

Our guest blogger is Robert Gordon, a Senior Fellow at the Center for American Progress Action Fund.

kristol In a nice sequel to Bob Novak’s proposal that John McCain cut the payroll tax, Bill Kristol today writes that McCain might “suggest taxing ‘carried interest’* as ordinary income, if only to watch the fur fly among hedge-fund fat cats.”

This is a good idea that conservatives hated less than a year ago. Grover Norquist said “it’s crystal clear” that taxing carried interest “violates the Federal Taxpayer Protection Pledge.” Paul Weyrich called the idea “a huge tax increase.” And the Club for Growth said it was a “tax hike” and a “war on prosperity.”

John McCain has waffled on “no new taxes,” but he has regularly said that he won’t propose any tax hikes. Under the standard conservative definition, this is a tax hike. Yet Kristol is urging him to consider it…. probably because McCain’s true conservative tax plan will be spectacularly unappealing for most voters.

More gymnastics to come.

*Carried interest is the share of profits that is earned by a hedge fund manager without a corresponding ownership stake in the hedge fund. Carried interest is usually the manager’s core compensation, but it is taxed at the lower capital gains rate, not the ordinary income rate.

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Norquist: ‘More People Will Die’ Because Bush Raised CAFE Standards

Filed Under: Energy

by Brad at March 25th, 2008 at 3:10 pm

Norquist: ‘More People Will Die’ Because Bush Raised CAFE Standards»

On the David Strom Show on March 22, Americans for Tax Reform head Grover Norquist angrily attacked the Energy Independence and Security Act of 2007, signed into law in December by President Bush to slowly raise fuel economy standards to 35 MPG by 2020. Norquist alleged that these standards are killing 2,000 people each year:

The government itself has calculated that around 2000 people a year are killed because of those CAFÉ standards and our cheerful government has just voted to increase them, to make cars lighter, smaller. And more people will die. I mean 2,000 people a year die because the environmentalists think that you should be in a smaller car because it offends their sensitivities that you’re using gasoline.

Listen here:

Norquist seems to be referring to the 2002 National Academies report Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards, which states, “[A]ll but two members of the committee concluded that the downweighting and downsizing that occurred in the late 1970s and early 1980s, some of which was due to CAFE standards, probably resulted in an additional 1,300 to 2,600 traffic fatalities in 1993.” The report explains the reasoning:

Although many general indicators of motor vehicle travel safety improved during [the 1970s and early 1980s] (e.g., the fatality rate per vehicle mile traveled), the preponderance of evidence indicates that this downsizing of the vehicle fleet resulted in a hidden safety cost, namely, travel safety would have improved even more had vehicles not been downsized. . . When asked about the potential use of lighter material to allow weight reduction without safety-related size reductions, … industry representatives did not expect that they could avoid reducing vehicle size if substantial reductions in vehicle weight were made. . . The committee recognizes that automakers’ responses could be biased in this regard.

However, the blistering minority dissent in that very same report points out several fallacies in the reasoning and concludes:

The relationships between vehicle weight and safety are complex and not measurable with any reasonable degree of certainty at present. The relationship of fuel economy to safety is even more tenuous.

Evidently, Norquist is more concerned by hypothetically projected deaths in an alternate universe where Detroit adopts safety instruments like air bags and rollover standards without kicking and screaming, than he is by the very real casualties to our economy, our soldiers, our nation, and our planet caused by our addiction to fossil fuels.

The American people, regardless of party, overwhelmingly recognize that higher fuel standards spur technological innovation and improve our lives.

Transcript: Read the rest of this entry »

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NEW REPORT: McCain Adopts ‘Entire’ Norquist Agenda, Will Double The Bush Tax Cuts

Filed Under: Taxes

by Guest at March 21st, 2008 at 12:43 pm

NEW REPORT: McCain Adopts ‘Entire’ Norquist Agenda, Will Double The Bush Tax Cuts»

norquist Our guest bloggers are Robert Gordon and James Kvaal, Senior Fellow and Domestic Policy Advisor, respectively, at the Center for American Progress Action Fund.

Everyone knows that John McCain has reversed himself on the Bush tax cuts, which he once said came “at the expense of middle-class Americans.” What’s not yet well known is that McCain has offered his own massive tax cuts, mostly for corporations, that are as costly as Bush’s tax cuts and even more regressive.

McCain has won the heart of far-right tax activist Grover Norquist, who only three years ago was calling McCain “the nut-job from Arizona” and a “gun-grabbing, tax-increasing Bolshevik.” But here’s what Norquist says about McCain now:

[John McCain] campaigned on being very good on taxes in this election cycle… that he will continue to make [the Bush tax cuts] permanent, that he will veto any tax increase, period, that he wants to cut the corporate rate from 35 percent to 25 percent, that he wants to have full expensing, that he wants to abolish the AMT …. In addition to being the Americans for Tax Reform’s entire agenda, that is a very pro-growth set of policies he has put forward, and he articulates why they are important.

The McCain plan may please Norquist, but what does it mean for middle-class families? According to a new analysis released today by the Center for American Progress Action Fund, McCain’s new proposals would do the following:

– Double the size of the Bush tax cuts, costing more than $2 trillion in their first decade.

– Do virtually nothing for the middle class: only 9 percent of the tax cuts will go to the bottom 80 percent of households, while 58 percent will go to the top 1 percent of households.

– Follow Norquist’s blueprint that’s been called a “stealth approach to tax reform” – and that aims to abandon progressive taxation in favor of a wage tax imposed mainly on low- and middle-income households.

Read the full report (pdf).

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