Today’s Brew 11-20-10

Alan Reynolds is in today’s Investor’s Business Daily:

Zero In On 2011’s Tax Time Bomb And Leave 10-Year Plans For Later

Personally, I’d prefer individual tax rates of 15%, 20%, 25% and 30% with a low flat rate on dividends, capital gains and estates and a 25% rate on corporate profits. But even such a modest move in the right direction would be ruled out if current law could somehow be made permanent.

By partially co-opting the banal Republican talking point about “making the Bush tax cuts permanent” Obama is really trying to cram through his own tax policy proposals from the moribund 2011 budget. He is belatedly pushing the same proposals from the same budget that Obama and a Democrat-controlled Congress have totally ignored since February.

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After the dividend tax rate came down, average dividends among the top 1% surged to $52,814 in 2004 and $83,072 by 2007. Reported dividends of the top 1% in 2007 were twice as large as the previous peak in 2000. That can’t be coincidence.

Since 15% of $83,072 is larger than 38.6% of $30,673, even that drastically reduced tax rate on dividends did not significantly reduce average revenues collected from the top 1.4 million taxpayers. But the lower dividend tax clearly did result in high-income taxpayers holding more dividend-paying stocks than ever before in taxable accounts.

Today’s Brew 11-10-10

Ralph Benko appears at the Washington Examiner today:

Schramm’s Law reveals key to restoring America’s economic growth

Economist Dr. Arthur Laffer’s famous curve provided an earlier era with the recipe for prosperity. It was a simple, irrefutable, axiom, showing that too high tax rates, by throttling economic activity, would stifle government revenue. (President Kennedy made the identical point.)

The Laffer Curve powered America out of the horrible stagflation of the 1970’s—an economy even worse than today’s.

We now enter a new political epoch. It demands a fresh axiom, Schramm’s Law: “The single most important contributor to a nation’s economic growth is the number of startups that grow to a billion dollars in revenue within 20 years.”

We seek to emerge from the Great Recession while the incumbent administration flounders about with ineffectual and counterproductive remedies.  President Obama squandered so much political capital that the voters gave his entire party a “shellacking” (his word).Voters gave the Republicans a new and massive majority in the House — the constitutional source of taxing and spending.