There’s been a lot of heated discussion about various preferences, deductions, credits, shelters, and other loopholes in the tax code. Some of this debate has revolved around whether it is legitimate to refer to these provisions as “tax expenditures” or “subsidies.”

My Cato colleague Michael Cannon vociferously argues that subsidies and expenditures only occur when the government takes money from person A and gives it to person B. On the other side of the debate are people like Josh Barro of the Manhattan Institute, who argues that tax preferences are akin to subsidies or expenditures since they can be just as damaging as government spending programs when looking at whether resources are efficiently allocated.

Since I’m a can’t-we-all-get-along, uniter-not-divider kind of person, allow me to suggest that this debate should be set aside. After all, we all agree that tax preferences can lead to inefficient outcomes. So let’s call them “tax distortions” and focus on the real issue, which is how best to eliminate them.

This is an important issue because both the Domenici-Rivlin Task Force and the Chairmen of the Simpson-Bowles Commission have unveiled plans that would reduce or eliminate many of these tax distortions and also lower marginal tax rates. That’s the good news.

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Today, in 1981, Ronald Reagan signed a secret directive authorizing the CIA to recruit and support the Contra rebels, fighting for freedom in Nicaragua. It marked a new seriousness in our prosecution of the Cold War.

From The Brownsville Herald:

U.S. Rep. Solomon P. Ortiz conceded late Monday to Congressman-elect Blake Farenthold.

Noting that the recount of more than 106,000 votes had been completed in the district, Ortiz said: “Therefore, with great respect and admiration in the Democratic process, I congratulate my opponent, Mr. R. Blake Farenthold, in his election to the 27th Congressional District of Texas in the U.S. House of Representatives.”

Cameron County, the last county in the district that includes San Patricio, Nueces, Kleberg, Kenedy, and Willacy counties, concluded its recount Monday, although the results were not available at press time.

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Yes, I’m serious.

Why is Mitt Romney even in the running, when healthcare played such an important role in the mid-term elections as noted by Rasmussen:

Fifty-nine percent (59%) of those who voted in today’s elections nationwide favor repeal of the national health care bill passed by congressional Democrats in March, including 48% who Strongly Favor it.

Rasmussen Reports telephone surveying nationwide after the polls closed found that 40% are opposed to repeal, with 32% who Strongly Oppose it.

This mirrors what we have found every week in surveys since March.

Romney, as most know, is the one-term governor of Massachusetts and the creator of RomneyCare.  With two Massachusetts’s miracles for the state, a trifecta may be a tall order when presented on the national stage for the presidency–especially when Republican Senator Scott Brown, also from MA, has some questionable leanings.

But, then again, maybe not.

Quinnipiac released its latest poll showing Romney, ahead of former Governor Mike Huckabee, and edging out President Obama in 2012:

In trial heats for 2012, former Massachusetts Gov. Romney receives 45 percent to 44 percent for Obama, while the president gets 46 percent to 44 percent for Mr. Huckabee. Matched against Indiana Gov. Mitch Daniels, a virtual unknown to most voters, the president leads 45 – 36 percent.

Romney and Obama do matchup well, but maybe on the same side of the aisle as Romney is quite RINOish.  In addition to their love of government-run healthcare, Obama and Romney do have some other public relations commonality; they play to the ignorance of the people by capitalizing on their popularity.

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As Epstein told Reason in a 1995 interview, “I took some pride in the fact that [Sen.] Joe Biden (D-Del.) held a copy of Takings up to a hapless Clarence Thomas back in 1991 and said that anyone who believes what’s in this book is certifiably unqualified to sit in on the Supreme Court. That’s a compliment of sorts…. But I took even more pride in the fact that, during the Breyer hearings [in 199X], there were no such theatrics, even as the nominee was constantly questioned on whether he agreed with the Epstein position on deregulation as if that position could not be held by responsible people.”

Born in New York in 1943, Epstein splits faculty appointments at the University of Chicago and New York University; he’s also a senior fellow at Stanford’s Hoover Institution, an adjunct scholar at the Cato Institute, and a contributor to Reason. In books such as Forbidden Grounds: The Case Against Employment Discrimination Laws (1992) to Simple Rules for a Complex World (1995), and Skepticism and Freedom: A Modern Case for Classical Liberalism (2003), Epstein pushes his ideas and preconceptions to their limits and takes his readers along for the ride. A die-hard libertarian who believes the state should be limited and individual freedom expanded, he is nonetheless the consummate intellectual who first and foremost demands he offer up ironclad proofs for his characteristically counterintuitive insights into law and social theory.

Indeed, Epstein’s enduring value may not be any particular legal or policy prescription he’s offered over the years but rather his methodology. He believes in robust and unfettered argument and debate as a way of gaining knowledge. If you don’t put your ideas out in the arena, you can’t be doing your best work, he argues. “The problem when you keep to yourself is you don’t get to hear strong ideas articulated by people who disagree with you,” he says.

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Chicago parents are fed up with the shoddy education many of their kids are receiving in Chicago Public Schools and they’re no longer being silent.

As a part of the DoneWaiting.org coalition – a collection of hundreds of organizations that joined together after the release of the unflinching documentary film “Waiting for ‘Superman,’” parents protested outside the school board meeting last week.

Parents are fed up with the ineffective teachers, violence and adult-first attitude that is pervasive in many public schools.  But instead of demanding more money be spent, they’ll calling for options.  Instead of fixing it with money, they want out alltogether.

Father Michael Pfleger, who, as a Barack Obama ally, gained notoriety during the last presidential election for saying some eyebrow-raising defenses of Jeremiah Wright and Louis Farrakhan, is leading the call for parental choice.

This shows this is an issue that cuts across partisan and ideological divides.

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To paraphrase an old saying, you can learn a lot about a man by seeing how he acts when no one is paying attention. A corollary to this works for Congressmen. In any given year there are, at most, three or four “big” issues that dominate Congressional debate and culminate in dramatic floor votes that will define future reelection campaigns. For example, the current Congress can be distilled to essentially four votes; stimulus, cap and trade, Obamacare and the bank bailout. The next Congress will likely be defined by tax policy, federal spending and repeal of parts of Obamacare and the banking bill.

How a Congressman votes on these “big” issues will tell you a lot about his basic philosophy of government. But, it is an imperfect snapshot. The overwhelming majority of lawmakers will line up with their parties on the “big” votes. These few votes don’t tell you a lot about the individual lawmaker’s comprehensive philosophy nor their specific views on the powers and limitations of their office. For that, you have to look at their work on the thousands of bills that wind their way through the legislative process every year and, more importantly, their own specific legislative proposals.  In other words, we have to look at the work they do when no one else is looking.

It is on this that the bids of both Rep. Joe Barton and Rep. Fred Upton to chair the powerful Energy and Commerce Committee fail. Each has promoted specific and personal legislative proposals which are impossible to square with any belief in restrained, limited government. Worse, their initiatives betray the absence of what is perhaps the most important quality in a lawmaker, humility. Not personal humility, but rather an appreciation that there are limits to what Congress or the federal government can or should do. Both Barton and Upton seem convinced that absolutely every problem, perceived problem or general annoyance can, and should, be addressed by Congress.

This should disqualify them from the Chairman’s gavel. Should either of them be entrusted by their colleagues with the gavel, then the meaning of the midterms will be greatly diminished. The great tea party wave will have finally crashed on the rocks of the go-along-get-along DC GOP establishment.

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On today’s edition of Coffee and Markets, Brad Jackson and Francis Cianfrocca discuss the fiscal status of states, and the Irish bailout.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Ailing Ireland Accepts Bailout
State Tests Limits of Spending Cuts

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What drives an entrepreneur to start a business?  Is it solely about money?  Or is there something more?  I argue that often it is the  same creative drive that compels an artist to paint, a musician to compose, or a sculptor to look at a piece of rough marble and see an angel inside.  And those who understand the mind of the small business owner know why the proposed tax increase in 2011 will do more harm than good to the very people this economy needs most to create jobs.

On FBN’s Bulls & Bears recently Democratic strategist Jehmu Greene, the token liberal steak tossed into the wolf den of laissez faire commentators, uttered words to the effect that if we allow the Bush tax cuts to remain, the “rich” (I guess that’s me?) will not put the money into the economy but rather just squirrel it away “in their banks…It would not go into job creation or creating capital for small business.”

My first thought  was: “In my bank? Really?  How many businesses have you owned?” (To be fair she did co-found some internet venture called Urban Hang Suite which shuttered in 2003).  But then I reminded myself that, like Ms. Greene herself who has been in non-profit and/or government almost her entire career,  very few people in the  Obama administration, from the president on down, have ever started a business.  Thus they cannot understand what drives entrepreneurs to succeed.  They think it is just about take-home pay.

It’s said that small business owners work eighteen hour days for ourselves so we don’t have to work eight hours a day for someone else.  And often our income on a dollar/hour basis is less than the established firms we may have left to go on our own. Certainly this is generally true for those few scary years at the beginning when a myriad of mistakes are made and unanticipated events occur that prompt the principals to pay ourselves only after all other obligations have been met   So why do it?  Why take such risk?

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Environmental Protection Agency officials Wednesday provided power companies and states with new guidance on EPA’s plans to regulate greenhouse gases.

A D.C. lobbyist for two major power companies told Bloomberg News that “the energy and manufacturing sectors will essentially be in a construction moratorium” as a consequence.

Here we are, with 15 million Americans unemployed and millions more underemployed, and the EPA is moving blindly ahead with new regulations that will increase dramatically the energy costs of U.S. industries, reducing their competitiveness and profitability, and making it less likely they will hire.

EPA’s action amounts to rewriting the Clean Air Act to suit its own bureaucratic and ideological objectives. At a time when the Obama administration should be focused on job creation and the nation’s economic recovery, promulgating stringent new environmental rules should be its last priority.

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Today, in 1963, President John F. Kennedy was assassinated in Dallas, TX.

George Will in today’s Washington Post:

The theory – perhaps by now it seems like a quaint anachronism – on which the nation was founded is, or was: Government is instituted to protect preexisting natural rights essential to the pursuit of happiness. Today, that pursuit often requires flying, which sometimes involves the wanding of 3-year-olds and their equally suspect teddy bears.

What the TSA is doing is mostly security theater, a pageant to reassure passengers that flying is safe. Reassurance is necessary if commerce is going to flourish and if we are going to get to grandma’s house on Thursday to give thanks for the Pilgrims and for freedom. If grandma is coming to our house, she may be wanded while barefoot at the airport because democracy – or the equal protection clause of the 14th Amendment; anyway, something – requires the amiable nonsense of pretending that no one has the foggiest idea what an actual potential terrorist might look like.

But enough, already.

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Too many elected officials are far too comfortable spending taxpayer dollars without knowing where that money will actually end up. This was proven once again by the Senate’s vote to fund the Pigford Settlements, even though serious claims of fraud exist.

In September, I joined my colleagues Congressmen Steve King (IA-05) and Bob Goodlatte (VA-06) to call for a full investigation into the Pigford Settlement Case. As a constant advocate for careful use of taxpayer dollars, I was concerned when I learned that this Settlement has 94,000 claims of discrimination, even though only approximately 33,000 black farmers exist in the United States.

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Charlie Rangel, convicted of eleven ethics violations – the most ever found against any member of Congress – was resoundingly re-elected, getting 80% of his district’s vote.

After 40 years representing these folks, you can’t conclude he was an unknown commodity.  Granted, the conviction occurred after the election, but the charges were well publicized.

Has Charlie Rangel’s leadership produced life so grand in Harlem that flagrant and persistent unethical behavior by their Congressman means nothing to its residents?

The national poverty rate is around 14%.  In the 15^th district of New York, Charlie Rangel’s district, it’s 24.3%.  The child poverty rate is 30.9%.

Whatever it is that Harlem voters find so attractive about Mr. Rangel, it’s hard to conclude that quality of life is something they feel they owe to him.

But let’s think about this in a broader context.

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It’s one of the most beautiful times of the year in the lovely Pocono Mountains of Pennsylvania, when the trees are gorgeous hues of crimson and gold, and the sweet smell of hot apple cider is in the brisk autumn air.  As you walk in and out of little village colonials and saltbox houses donning  fall mums and pumpkins on their porches, you’re hit with that waft of burning fireplace aroma – the sort of scene that gives you that comfy feeling of peace and contentment.

But turn the corner and that picturesque scene is disrupted by a tiny sea of purple t-shirts and angry faces.  Yep, you got it – it’s the SEIU!   And they’re not in the holiday spirit, apparently.

Pocono Medical Center, a mid-sized, not-for-profit community hospital nestled in the Pocono Mountains near East Stroudsburg University, has been in SEIU’s crosshairs for months.  The union has been demanding a closed shop at the hospital, despite the desires of other workers, and has since made it the crux of its contract negotiations. They were out protesting last week, making their demands known.  (Not many from Pocono Medical Center participated in the protest, so they resorted to recruiting some nearby friends to join them).

For those not familiar with what a “closed shop” is in union terms, this means that all of those employees would be required to be a member of the union and to pay union dues as a condition of employment.

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Today starts the crush of Thanksgiving Holiday travel. In simpler times, travel over Thanksgiving was not for the faint of heart. The introduction of new, invasive policies from TSA won’t improve things.

If nothing else has proven that Republican National Committee Chair Michael Steele is not in tune with the GOP today, his recent statements on the Tea Party movement should serve as exhibit number one.

Showing that he has no clue the effect that the Tea Party movement had on the 2010 elections, in a five-page memo to committee members last week, Steele said that the GOP saved the day by stopping Tea Partiers from going third party in 2010.

Daily Caller excerpted Steele’s comments on Nov. 20. “The RNC,” Steele told the members, “welcomed the energy and limited government principles of Tea Party voters and grassroots conservatives, and worked hard to ensure that their views found expression within the Republican party, and not in a potentially ruinous third-party movement.”

Given the shambles the party was in at the end of 2008, circumstances were ripe for a new party to emerge. Encouraging those millions of disaffected conservative voters to become active Republicans was at the center of the RNC’s turnout strategy.

Steele is trying to spin the situation and make it seem as if his efforts and that of the national party corralled the Tea Party movement and led the Tea Partiers to an electoral victory. Nothing could be further from the truth.

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Political operatives connected with renamed ACORN affiliates are in position to help swing close, competitive races for left-leaning candidates in the 2012 elections, according to former insiders and policy analysts who are familiar with the network’s operations.

An ambitious rebranding scheme that began earlier this year has now accelerated to include affiliates in at least 12 states. The bankruptcy filing the organization slyly submitted on Election Day is properly viewed as “a head fake” and a “public relations gimmick” arranged to distract attention away from the partisan political activities of renamed affiliates, sources say.

It is worth recalling that the organization known in full as the Association of Community Activists for Reform Now had initially denied reports that it would be dropping its tarnished name in press statements released in the summer of 2009.  Wade Rathke, who founded ACORN in 1970, had announced on his blog that ACORN International, one of many affiliate organizations, had officially changed its name to “Community Organizations International.” Former board members who came together under the banner of ACORN 8 in response to an embezzlement scandal saw the move as a possible opener to a larger rebranding effort.

Scott Levenson, a spokesman for organization’s national leadership, issued a statement claiming that the name has not been dropped and that Rathke is no longer connected with ACORN.

“ACORN is not changing its name,” he declared. “ACORN International, is a five-year old organization from which ACORN withdrew a year ago as part of an overall restructuring process and requested that they stop using the ACORN name, which they have now done. Wade Rathke was fired as Chief Organizer of ACORN in June 2008.”

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Chilling thought for the day.  Recall the election of 1948, when the  Republican Party’s heavily-favored, moderate and uninspiring nominee lost to Truman in a race in which he was heavily favored to win.  The tragedy is not that the Chicago Tribune got the headline wrong, but that the American people lost either way given the choice between a left-leaning Republican and a slightly right-leaning Democrat.  To see how much we have learned from history, here is a pop quiz.

If you cannot answer any of the following questions, you are ill-prepared for 2012.

Leading up to the 1996 Presidential election, anytime Republicans were gathered, from Young Republicans to State Committees, anywhere in the Country, including Kansas, one candidate was the hands down favorite, usually with double the votes of the second pick.

Who was the darling of the Republican Party in 1996?

(hint: Pat Buchanan was usually second)

In 1964, Barry Goldwater won a primary victory defeating among others, Governor George Romney.

What book is credited with helping the Conservative Goldwater break the grip of the moderate wing that opposed him?

Who was the second, and only other Republican in the last century to defy the statist wing of the Republican Party and wrest the Presidential nomination?

In her book A Choice Not an Echo (1964), Phyllis Schlafly names the dates, places and attendees of the meetings as she details how the Republican Presidential nominees are always hand-picked by a small, elite cadre’ thus relegating loyal Republican activists to “echoing” the pre-selection rather than exercising their birthright “choice”.   The housewife-turned-activist Schlafly, was horrified to see the kingmakers actively manipulating the process in an attempt to steal the nomination away from the legitimate Republican popular candidate, Barry Goldwater.  She rushed tens of thousands of copies of her book to Convention delegates who then stood with Goldwater to win the battle, if not the war.

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