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	<title>Big Government &#187; Flat Tax</title>
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		<title>Gingrich Eschews Rhetoric for Substance in CPAC Address</title>
		<link>http://biggovernment.com/driehl/2012/02/10/gingrich-eschews-rhetoric-for-substance-in-cpac-address/</link>
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		<pubDate>Sat, 11 Feb 2012 03:42:36 +0000</pubDate>
		<dc:creator>Dan  Riehl</dc:creator>
				<category><![CDATA[2012 Election]]></category>
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		<guid isPermaLink="false">http://biggovernment.com/?p=427128</guid>
		<description><![CDATA[If one was looking for fiery, crowd pleasing, political rhetoric from former Speaker Newt Gingrich as he addressed CPAC today, they were likely disappointed. What Gingrich did do was run through a litany of policy solutions he claimed he has committed to implement immediately upon taking office in January of 2013.

Contrasting an America that can [...]]]></description>
			<content:encoded><![CDATA[<p>If one was looking for fiery, crowd pleasing, political rhetoric from former Speaker Newt Gingrich as he addressed CPAC today, they were likely disappointed. What Gingrich did do was run through a litany of policy solutions he claimed he has committed to implement immediately upon taking office in January of 2013.</p>
<p><a href="http://biggovernment.com/files/2012/02/gingrich-cpac.png"><img class="aligncenter size-full wp-image-427164" title="gingrich cpac" src="http://biggovernment.com/files/2012/02/gingrich-cpac.png" alt="" width="418" height="314" /></a></p>
<p>Contrasting an America that can versus an America that can&#8217;t, Gingrich compared America&#8217;s speed and might in winning WWII versus her current inability to seal its own border. In a lighter moment, the former Speaker contrasted the efficiency of package tracking by Federal Express with the government&#8217;s inability to track illegal immigrants, suggesting sending each one a package may be the best way to apprehend the latter.</p>
<p>He also mentioned repealing Obamacare, Dodd Frank, and Sarbanes Oxley on his first day in office. He stated his desire to be a &#8220;paycheck president&#8221; versus a &#8220;food stamp president,&#8221; a term he used to denigrate Barack Obama.</p>
<p>Calling for a Fall campaign focused on substance, Gingrich also mentioned eliminating the Capital Gains tax and implementing 100% expensing for all new equipment written off in one year to help get the economy growing. Additionally, he called for a modernization of the workforce, proposing that unemployment compensation be linked to business training programs to avoid paying people for 99 weeks &#8220;for doing nothing.&#8221;<span id="more-427128"></span></p>
<p>The solutions were bold but would obviously involve more than giving one speech. He called for the elimination of the EPA, replacing it with a new agency that would take economics and business interests into account in all decision-making. On tax policy, Gingrich called for a 12.5% corporate tax rate, abolishing the death tax, and the option of a 15% flat tax for individuals he called a tax cut.</p>
<p>Citing the need to shrink spending to meet revenue levels and the replacement of the current Civil Service system with a new modern personnel management system, his remarks appeared to be well received. Gingrich also cited abolishing the Dept of Energy (DOE) and a task forced to be headed by Texas Governor Rick Perry focused on the 10th amendment to return power to the states, as appropriate.</p>
<p>Gingrich also called for an audit of the Federal Reserve and an end to Ben Bernanke&#8217;s term as Chair of the Federal Reserve. The former Speaker also called for a more honest foreign policy, one acknowledging the dangers of radical Islamists intent on doing America and Americans harm.</p>
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		<title>New Academic Study Confirms that Lower Tax Rates Are the Best Way to Reduce Tax Evasion</title>
		<link>http://biggovernment.com/dmitchell/2012/01/30/new-academic-study-confirms-that-lower-tax-rates-are-the-best-way-to-reduce-tax-evasion/</link>
		<comments>http://biggovernment.com/dmitchell/2012/01/30/new-academic-study-confirms-that-lower-tax-rates-are-the-best-way-to-reduce-tax-evasion/#comments</comments>
		<pubDate>Mon, 30 Jan 2012 18:57:42 +0000</pubDate>
		<dc:creator>Dan Mitchell</dc:creator>
				<category><![CDATA[2012 Budget]]></category>
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		<guid isPermaLink="false">http://biggovernment.com/?p=418948</guid>
		<description><![CDATA[Leftists want higher tax rates and they want greater tax compliance. But they have a hard time understanding that those goals are inconsistent.

Simply stated, people respond to incentives. When tax rates are punitive, folks earn and report less taxable income, and vice-versa.

When tax rates increase, sometimes they engage in tax avoidance, lowering their tax liabilities [...]]]></description>
			<content:encoded><![CDATA[<p>Leftists want <a href="http://danieljmitchell.wordpress.com/2009/06/15/obamas-tax-policy-threatens-americas-economy/">higher tax rates</a> and they want <a href="http://danieljmitchell.wordpress.com/2009/12/13/more-power-for-the-irs/">greater tax compliance</a>. But they have a hard time understanding that those goals are inconsistent.</p>
<p style="text-align: center;"><a href="http://danieljmitchell.files.wordpress.com/2012/01/irs-thuggery.jpg"><img class="aligncenter" title="IRS Thuggery" src="http://danieljmitchell.files.wordpress.com/2012/01/irs-thuggery.jpg" alt="" width="292" height="300" /></a></p>
<p>Simply stated, people respond to incentives. When tax rates are punitive, folks earn and report less taxable income, and vice-versa.</p>
<ul>
<li>When tax rates increase, sometimes they <a href="http://danieljmitchell.wordpress.com/2011/09/19/one-simple-reason-and-two-easy-steps-to-show-why-obamas-soak-the-rich-tax-hikes-wont-work/">engage in tax avoidance</a>, lowering their tax liabilities legally.</li>
<li>When tax rates change, sometimes they choose to <a href="http://danieljmitchell.wordpress.com/2011/11/06/a-lesson-on-the-laffer-curve-for-barack-obama/">alter their levels of work, saving, and investment</a>.</li>
<li>And when tax rates go up, sometimes they resort to illegal steps to protect themselves from the tax authority.</li>
</ul>
<p>In a previous post, <a href="http://danieljmitchell.wordpress.com/2010/05/02/greeces-problem-is-high-tax-rates-not-tax-evasion/">I quoted an article from the International Monetary Fund</a>, which unambiguously concluded that high tax burdens are the main reason people don&#8217;t fully comply with tax regimes:<br />
<span id="more-418948"></span></p>
<blockquote><p>Macroeconomic and microeconomic modeling studies based on data for several countries suggest that the major driving forces behind the size and growth of the shadow economy are an increasing burden of tax and social security payments… The bigger the difference between the total cost of labor in the official economy and the after-tax earnings from work, the greater the incentive for employers and employees to avoid this difference and participate in the shadow economy. …Several studies have found strong evidence that the tax regime influences the shadow economy.</p></blockquote>
<p>Indeed, it&#8217;s worth noting that international studies find that the jurisdictions with the highest rates of tax compliance are the ones with reasonable tax systems, such as <a href="http://danieljmitchell.wordpress.com/2010/10/31/would-you-rather-your-country-grow-like-france-or-hong-kong/">Hong Kong</a>, <a href="http://danieljmitchell.wordpress.com/2011/03/14/five-reasons-why-switzerland-is-better-than-the-united-states-but-five-reasons-why-ill-stay-in-america/">Switzerland</a>, and <a href="http://danieljmitchell.wordpress.com/2009/10/17/thoughts-about-singapore/">Singapore</a>.</p>
<p>Now there&#8217;s a new study confirming these findings. Authored by two economists, one from the University of Wisconsin and the other from Jacksonville University, the new research cites the impact of tax burdens as well as other key variables.</p>
<p>Here are some <a href="http://www.ssc.wisc.edu/econ/archive/wp2011-1.pdf">key findings from the study</a>.</p>
<blockquote><p>According to the results provided in Table 2, the coefficient on the average effective federal income tax variable (AET) is positive in all three estimates and statistically significant for the overall study periods (1960-2008) at beyond the five percent level and statistically significant at the one percent level for the two sub-periods (1970-2007 and 1980-2008). Thus, as expected, the higher the average effective federal income tax rate, the greater the expected benefits of tax evasion may be and hence the greater the extent of that income tax evasion. This finding is consistent with most previous studies of income tax evasion using official data&#8230; In all three estimates, [the audit variable] exhibits the expected negative sign; however, in all three estimates it fails to be statistically significant at the five percent level. Indeed, these three coefficients are statistically significant at barely the 10 percent level. Thus it appears the audit rate (AUDIT) variable, of an in itself, may not be viewed as a strong deterrent to federal personal income taxation [evasion].</p></blockquote>
<p>Translating from economic jargon, the study concludes that higher tax burdens lead to more evasion. Statists usually claim that this can be addressed by <a href="http://danieljmitchell.wordpress.com/2011/03/05/republicans-are-right-to-cut-the-irs-budget/">giving the IRS more power</a>, but the researchers found that audit rates have a very weak effect.</p>
<p>The obvious conclusion, as <a href="http://danieljmitchell.wordpress.com/2010/01/11/clueless-english-government-raises-tax-rates-then-wonders-why-compliance-is-a-problem/">I&#8217;ve noted before</a>, is that lower tax rates and tax reform are the best way to improve tax compliance &#8211; not more power for the IRS.</p>
<p>Incidentally, this new study also finds that evasion increases when the unemployment rate increases. Given his proposals for higher tax rates and <a href="http://danieljmitchell.wordpress.com/2011/09/05/obamas-failure-on-jobs-four-damning-charts/">his poor track record on jobs</a>, it almost makes one think Obama is trying to set a record for tax evasion.</p>
<p>The study also finds that dissatisfaction with government is correlated with tax evasion. And since Obama&#8217;s White House has been wasting money on corrupt green energy programs and a failed stimulus, that also suggests that the Administration wants more tax evasion.</p>
<p>Indeed, this last finding is consistent with some <a href="http://danieljmitchell.wordpress.com/2010/05/21/greetings-from-austria/">research from the Bank of Italy that I cited in 2010</a>.</p>
<blockquote><p>&#8230;the coefficient of public spending inefficiency remains negative and highly significant. …We find that tax morale is higher when the taxpayer perceives and observes that the government is efficient; that is, it provides a fair output with respect to the revenues.</p></blockquote>
<p>And I imagine that &#8220;tax morale&#8221; in the United States is further undermined by an internal revenue code that has <a href="http://danieljmitchell.wordpress.com/2011/05/23/a-very-depressing-picture-of-tax-complexity-and-political-corruption/">metastasized into a 72,000-page monstrosity of corruption and sleaze</a>.</p>
<p>On the other hand, tax evasion apparently is correlated with real per-capita gross domestic product. And since the economy has suffered from anemic performance over the past three years, that blows a hole in the conspiratorial theory that Obama wants more evasion.</p>
<p>All joking aside, I&#8217;m sure the President wants more tax compliance and more prosperity. And since I&#8217;m a nice guy, I&#8217;m going to help him out. Mr. President, this video outlines a plan that would achieve both of those goals.</p>
<p style="text-align: center;"><a target="_blank" href="http://www.youtube.com/watch?v=nhUOpNve1bY"><img src="http://img.youtube.com/vi/nhUOpNve1bY/default.jpg"/></a></p>
<p>Given <a href="http://danieljmitchell.wordpress.com/2011/10/08/is-this-the-worst-thing-obama-has-ever-said/">his class-warfare rhetoric</a>, I&#8217;m not holding my breath in anticipation that he will follow my sage advice.</p>
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		<slash:comments>182</slash:comments>
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		<title>Obama Has United the World&#8230;in Opposition to Bad U.S. Tax Policy</title>
		<link>http://biggovernment.com/dmitchell/2011/12/30/obama-has-united-the-world-in-opposition-to-bad-u-s-tax-policy/</link>
		<comments>http://biggovernment.com/dmitchell/2011/12/30/obama-has-united-the-world-in-opposition-to-bad-u-s-tax-policy/#comments</comments>
		<pubDate>Fri, 30 Dec 2011 17:11:28 +0000</pubDate>
		<dc:creator>Dan Mitchell</dc:creator>
				<category><![CDATA[2012 Budget]]></category>
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		<guid isPermaLink="false">http://biggovernment.com/?p=399124</guid>
		<description><![CDATA[Last year, I came up with a saying that &#8220;Bad Government Policy Begets More Bad Government Policy&#8221; and labeled it &#8220;Mitchell&#8217;s Law&#8221; during a bout of narcissism.

There are lots of examples of this phenomenon, such as the misguided War on Drugs being a precursor to intrusive, costly, and ineffective money laundering policies.
Or how about government healthcare subsidies [...]]]></description>
			<content:encoded><![CDATA[<p>Last year, <a href="http://danieljmitchell.wordpress.com/2010/07/25/another-sad-example-of-mitchells-law/">I came up with a saying</a> that &#8220;Bad Government Policy Begets More Bad Government Policy&#8221; and labeled it &#8220;Mitchell&#8217;s Law&#8221; during a bout of narcissism.</p>
<p style="text-align: center;"><a href="http://biggovernment.com/files/2011/12/Mitchells-Law.jpg"><img class="size-medium wp-image-399132 aligncenter" title="Mitchell's Law" src="http://biggovernment.com/files/2011/12/Mitchells-Law-300x173.jpg" alt="" width="300" height="173" /></a></p>
<p style="text-align: left;">There are lots of examples of this phenomenon, such as the <a href="http://danieljmitchell.wordpress.com/2010/08/02/mitchells-law-strikes-again/">misguided War on Drugs</a> being a precursor to <a href="http://danieljmitchell.wordpress.com/2010/12/14/take-your-stinking-paws-off-my-benjamins-you-damn-dirty-statist/">intrusive, costly, and ineffective money laundering policies</a>.</p>
<p>Or how about <a href="http://danieljmitchell.wordpress.com/2011/06/07/if-we-want-to-fix-the-healthcare-mess-we-better-understand-the-real-problem/">government healthcare subsidies driving up the price of healthcare</a>, which then leads <a href="http://danieljmitchell.wordpress.com/2010/08/10/government-created-third-party-payer-is-the-number-one-problem-in-americas-health-care-system/">politicians to decide that there should be even more subsidies</a> because healthcare has become more expensive.</p>
<p>But if you want a really stark example of Mitchell&#8217;s Law, the internal revenue code is littered with examples.</p>
<p>The politicians created a<a href="http://danieljmitchell.wordpress.com/2011/05/23/a-very-depressing-picture-of-tax-complexity-and-political-corruption/"> nightmarishly complex tax system</a>, for instance, and then decided that enforcing the wretched system <a href="http://danieljmitchell.wordpress.com/2011/12/19/federal-court-ruling-ignores-the-constitution-and-gives-more-power-to-the-irs/">required the erosion of civil liberties and constitutional freedoms</a>.</p>
<p>The latest example of this process involves <a href="http://danieljmitchell.wordpress.com/2011/06/20/fatca-law-is-an-international-version-of-obamacares-1099-provision-a-nightmare-for-cross-border-economic-activity-that-is-undermining-investment-in-america/">the Foreign Account Tax Compliance Act</a>, a piece of legislation that was imposed in 2010 because politicians assumed they could collect lots of tax revenue every single year by getting money from so-called tax havens.</p>
<p><span id="more-399124"></span></p>
<p>This FATCA law basically imposes a huge regulatory burden on all companies that have international transactions involving the United States, and all foreign financial institutions that want to invest in the United States. It is such a disaster that even the New York Times has taken notice, <a href="http://www.nytimes.com/2011/12/27/business/law-to-find-tax-evaders-denounced.html">recently reporting</a> that:</p>
<blockquote><p>&#8230;the Foreign Account Tax Compliance Act, or Fatca, as it is known, is now causing alarm among businesses outside the United States that fear they will have to spend billions of dollars a year to meet the greatly increased reporting burdens, starting in 2013. American expatriates also say the new filing demands are daunting and overblown. &#8230;The law demands that virtually every financial firm outside the United States and any foreign company in which Americans are beneficial owners must register with the Internal Revenue Service, check existing accounts in search of Americans and annually declare their compliance. Noncompliance would be punished with a withholding charge of up to 30 percent on any income and capital payments the company gets from the United States. &#8230;The I.R.S., under pressure from angry and confused financial officials abroad, has extended the deadline for registration until June 30, 2013, and is struggling to provide more detailed guidance by the end of this year. But beginning in 2012, many American expatriates — already the only developed-nation citizens subject to double taxation from their home government — must furnish the I.R.S. with detailed personal information on their overseas assets. &#8230;He said his sense was that Fatca required companies “to prove your innocence.” &#8230;Then there is a question of reciprocity: Would the United States accept the same demands for information from the tax authorities in other countries — say Russia or China?</p></blockquote>
<p>It&#8217;s worth noting at this point that FATCA only exists because of bad tax law. If the United States had a <a href="http://danieljmitchell.wordpress.com/2010/03/29/the-flat-tax-good-for-america-bad-for-washington/">simple and fair flat tax</a>, there would be no <a href="http://danieljmitchell.wordpress.com/2011/09/26/explaining-the-perverse-impact-of-double-taxation-with-a-chart/">double taxation of income that is saved and invested</a>. As such, the IRS wouldn&#8217;t have any reason to care whether Americans had bank accounts and/or investments in places such as London, Hong Kong, and Panama.</p>
<p>But as is so often the case with politicians, they choose not to fix bad policy and instead decide to impose one bad policy on top of another. Hence, the crowd in Washington enacting FATCA and sending the IRS on a jihad.</p>
<p>By the way, the New York Times was late to the party. Many other news outlets already have noticed that the United States is about to suffer a big self-inflicted economic wound.</p>
<p>Indeed, what&#8217;s remarkable about Obama&#8217;s FATCA policy is that the world in now united. But it&#8217;s not united for something big and noble, such as peace, commerce, prosperity, or human rights. Instead, it&#8217;s united in opposition to intrusive, misguided, and foolish American tax law.</p>
<p>Let&#8217;s look at some examples.</p>
<p style="padding-left: 30px;">o From the United Kingdom, a <a href="http://www.ft.com/intl/cms/s/0/4e6e31a6-95e4-11e0-ba20-00144feab49a.html#axzz1PC969jEs">Financial Times column warns</a> that, &#8220;This summer, the senior management of one of Asia’s largest financial groups is quietly mulling a potentially explosive question: could it organise some of its subsidiaries so that they could stop handling all US Treasury bonds? &#8230;what is worrying this particular Asian financial group is&#8230;a new law called the Foreign Account Tax Compliance Act&#8230;the new rules leave some financial officials fuming in places such as Australia, Canada, Germany, Hong Kong and Singapore. Little wonder. Never mind the fact that implementing these measures is likely to be costly. &#8230;Hence the fact that some non-US asset managers and banking groups are debating whether they could simply ignore Fatca by creating subsidiaries that never touch US assets at all. “This is complete madness for the US – America needs global investors to buy its bonds,” fumes one bank manager. “But not holding US assets might turn out to be the easiest thing for us to do.”</p>
<p style="padding-left: 30px;">o From India, the <a href="http://economictimes.indiatimes.com/news/international-business/private-bank-clients-urged-to-avoid-u-s-securities/articleshow/10247625.cms">Economic Times reports</a> that, &#8220;FATCA, or the Foreign Account Tax Compliance Act, will require overseas banks to report U.S. clients to the Internal Revenue Service, but its loose definition of who is a U.S. citizen will create a huge administrative burden and could push non-residents to slash their U.S. exposure, some bankers say. &#8230;Bankers say the scheme will be extremely costly to implement, and some say that as the legislation stands, any bank with a client judged to be a U.S. citizen will be also obliged to supply documentation on all other clients. &#8220;FATCA will cost 10 times to the banks than it will generate for the IRS. It is going to be extremely complicated,&#8221; said Yves Mirabaud, managing partner at Mirabaud &amp; Cie and Swiss Bankers Association board member.&#8221;</p>
<p style="padding-left: 30px;">o Discussing the impact in Canada, <a href="http://www.reuters.com/article/2011/10/05/canada-usa-taxes-idUSN1E7941R120111005">Reuters notes</a>, &#8220;The new regulation has drawn criticism from the world&#8217;s banks and business people about its reach and costs. ..&#8221;Hundreds of millions of dollars spent on developing compliance processes to target Canadian citizens would not be a useful exercise, and they are, for the most part, people who actually have no tax liabilities because they do not earn income in the United States,&#8221; [Canadian Finance Minister] Flaherty said.&#8221;</p>
<p style="padding-left: 30px;">o A <a href="http://news.cens.com/cens/html/en/news/news_inner_38247.html">Taiwan news outlet said</a>, &#8220;Taiwan’s domestic banks will reportedly reduce holdings of American bonds worth an estimated NT$100 billion (US$3.33 billion) due to the U.S. government’s recent decision to impose 30% tax on foreign-investment income in U.S. securities as bonds. Taiwan’s eight government-linked banks reportedly hold U.S. financial products worth over US$2 billion&#8230; On April 8, 2011, the U.S. government issued a notice advising foreign financial institutions to meet certain obligations under the Foreign Account Tax Compliance Act (FATCA), under which foreign financial institutions are subject to complex reporting rules related to their U.S. accounts.&#8221;</p>
<p style="padding-left: 30px;">o From the Persian Gulf, the <a href="http://www.gulf-daily-news.com/source/XXXIV/153/pdf/page18.pdf">Bahrain Daily News noted</a>, &#8220;A US law&#8230;has drawn the criticism of the world’s banks and business people, who dismiss it as imperialist and “the neutron bomb of the global financial system.” The unusually broad regulation, known as FATCA, or the Foreign Account Tax Compliance Act, makes the world’s financial institutions something of an extension of the tax-collecting Internal Revenue Service &#8211; something no other country does for its tax regime. &#8230;Even the European Commission has objected, and experts say other countries may create their own FATCA-style regimes for US banks or withdraw from US capital markets. In a barrage of letters to the Treasury, IRS and Congress, opponents from Australia to Switzerland to Hong Kong assail FATCA’s application to a broad swath of institutions and entities.&#8221;</p>
<p style="padding-left: 30px;">o A <a href="http://www.todayonline.com/Commentary/EDC111213-0000009/An-American-law-that-will-hit-investors-here">story from Singapore finds</a>, &#8220;For many years, thousands of foreign investors have put their money into American shares or other investments. Now, however, a somewhat obscure law called the Foreign Account Tax Compliance Act (FATCA) may make investments in the United States for everyone, from billionaires to the man on the street, here in Singapore far less attractive. &#8230;some banks or investment managers may advise customers not to invest in the US. &#8230; &#8220;private bankers are publicly advising their clients to clear their portfolios of all US securities&#8221;. A fund manager here told me his company is also advising clients to avoid US investments, and other companies may similarly start telling large clients as well as smaller ones the same story. Investors could then see recommendations not to invest in the US, and they may put their money elsewhere. &#8230;As consulting firm PwC said, &#8220;some institutions could decide that complying with the due diligence and verification provisions may not be cost effective&#8221; so they may stop making investments in the US. Banks or other asset managers may similarly decide it is easier not to offer US investments than to try and comply with the FATCA.&#8221;</p>
<p style="padding-left: 30px;">o <a href="http://www.swissinfo.ch/eng/politics/foreign_affairs/Tax_law_pushes_US_expats_to_give_up_passport.html?cid=31643032">From Switzerland</a>, a story &#8220;about the backlash from United States expats and the financial sector to the Foreign Account Tax Compliance Act (FATCA)&#8221; reports that, &#8220;Growing numbers of American expatriates are renouncing their US citizenship over a controversial new tax law and ever more burdensome fiscal and reporting obligations. &#8230;banks and business people who are supposed to enforce it on behalf of the US tax man are worried about its costly administrative burden&#8230; it’s just too expensive. The consequence will be that they cut out US clients and stop investing in the US. &#8230;Three or four years ago no one talked about renouncing nationality – now it’s an open discussion. That’s a major shift in mentality.</p>
<p style="padding-left: 30px;">o Writing about the reaction from Europe, <a href="http://www.businessinsider.com/why-foreign-banks-will-shun-american-business-2011-10">one columnist noted</a>, &#8220;FATCA encourages foreign financial institutions to limit their exposure to U.S. assets. In a joint letter to the Treasury and the IRS, the European Banking Federation and the Institute of International Bankers, which together represent most of the non-U.S. banks and securities firms that would be affected by FATCA, warned that “many [foreign financial institutions], particularly smaller ones or those with minimal U.S. investments or U.S. customers, will opt out of U.S. securities rather than enter into a direct contractual agreement with a foreign tax authority (the IRS) that imposes substantial new obligations and the significant reputational, regulatory, and financial risks of potentially failing those obligations.” A widespread divestment of U.S. securities by institutions seeking to avoid the burdens of FATCA could have real and harmful effects on the U.S. economy.&#8221;</p>
<p>These press excerpts help demonstrate the costs of FATCA, but what about the benefits? After all, maybe the law will lead to lots of good results that offset the high regulatory costs and lost investment for the American economy.</p>
<p>Well, the only &#8220;benefit&#8221; anybody had identified is that FATCA will transfer more money from the productive sector of the economy to the government. Indeed, <a href="http://danieljmitchell.wordpress.com/2009/07/21/president-obamas-dishonest-demagoguery/">Obama argued during the 2008 campaign</a> that cracking down on &#8220;tax havens&#8221; with proposals such as FATCA would give politicians lots of additional money to spend.</p>
<p>But when the legislation was approved in 2010, the Joint Committee on Taxation estimated that the new law would raise only $8.7 billion over 10 years, not the $100 billion that Obama claimed could be collected every single year. This video has some of the damning details.</p>
<p><a target="_blank" href="http://www.youtube.com/watch?v=i4NfocHluh8"><img src="http://img.youtube.com/vi/i4NfocHluh8/default.jpg"/></a></p>
<p>One final point demands attention.</p>
<p>While it appears that the rest of the world is against FATCA, that&#8217;s not completely true. Some international bureaucrats in Paris, <a href="http://danieljmitchell.wordpress.com/2010/08/02/should-american-taxpayers-subsidize-left-wing-bureaucrats-in-paris-who-get-tax-free-salaries-so-they-can-advocate-higher-taxes-in-america/">funded by American tax dollars</a>, actually want the rest of the world to adopt the same Orwellian system. Here&#8217;s a blurb from the New York Times story.</p>
<blockquote><p>Jeffrey Owens, a tax expert at the Organization for Economic Cooperation and Development, said catching tax evaders was “a concern that many member countries share.” If countries could agree to new global reporting standards for exchanging information, he said, then “maybe there’s a way forward.”</p></blockquote>
<p>In other words, the pinhead bureaucrats at the OECD think FATCA&#8217;s such a swell idea that they want to create a global network of tax police. So not only would America erode the sovereignty of other nations because of our bad tax law, but those other nations would be able to impose their bad tax law on income earned in America!</p>
<p>And just in case you think that&#8217;s just irresponsible demagoguery, it&#8217;s already beginning to happen. Check out <a href="http://danieljmitchell.wordpress.com/2011/04/11/reckless-irs-regulation-would-put-foreign-tax-law-over-american-tax-law-and-drive-investment-out-of-the-united-states/">this IRS regulation</a>, proposed by the Obama Administration, that would require American banks to put foreign law above American law.</p>
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		<title>Economist Arthur Laffer to Endorse Newt Gingrich</title>
		<link>http://biggovernment.com/sberry/2011/12/29/economist-arthur-laffer-to-endorse-newt-gingrich/</link>
		<comments>http://biggovernment.com/sberry/2011/12/29/economist-arthur-laffer-to-endorse-newt-gingrich/#comments</comments>
		<pubDate>Thu, 29 Dec 2011 17:51:11 +0000</pubDate>
		<dc:creator>Dr. Susan Berry</dc:creator>
				<category><![CDATA[2012 Election]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Flat Tax]]></category>
		<category><![CDATA[News]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Tax Reform]]></category>
		<category><![CDATA[2012 Presidential campaign]]></category>
		<category><![CDATA[Arthur Laffer]]></category>
		<category><![CDATA[Newt Gingrich]]></category>
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		<guid isPermaLink="false">http://biggovernment.com/?p=398452</guid>
		<description><![CDATA[The designer of Ronald Reagan&#8217;s economic plan is endorsing former Speaker Newt Gingrich for the Republican nomination for president. Arthur Laffer, chairman of Laffer Associates, and the Laffer Center for Supply-Side Economics, also co-authored &#8220;Return to Prosperity: How America Can Regain Its Economic Superpower Status&#8221; (Threshold, 2010) with Stephen Moore, senior economics writer for the [...]]]></description>
			<content:encoded><![CDATA[<p>The designer of Ronald Reagan&#8217;s economic plan is <a href="http://www.newsmax.com/InsideCover/Republican-Gingrich-Laffer-endorse/2011/12/28/id/422357">endorsing</a> former Speaker Newt Gingrich for the Republican nomination for president. Arthur Laffer, chairman of Laffer Associates, and the Laffer Center for Supply-Side Economics, also co-authored <em>&#8220;Return to Prosperity: How America Can Regain Its Economic Superpower Status&#8221; </em>(Threshold, 2010) with Stephen Moore, senior economics writer for the <em>Wall Street Journal</em> editorial page, and a member of the Journal&#8217;s editorial board.</p>
<p><a href="http://biggovernment.com/files/2011/12/laffer.gif"><img class="aligncenter size-full wp-image-398748" title="laffer" src="http://biggovernment.com/files/2011/12/laffer.gif" alt="" width="339" height="302" /></a></p>
<p>Mr. Laffer, who plans to join Mr. Gingrich in Iowa on Thursday for a formal announcement of his endorsement, <a href="http://politics.blogs.foxnews.com/2011/12/27/newt-gingrich-endorsed-architect-reagan-economic-plan-economist-arthur-laffer-0">said</a>, &#8220;Newt has the best plan for jobs and economic growth of any candidate in the field.”</p>
<p>Mr. Laffer added:</p>
<p style="padding-left: 30px;"><em>Like Ronald Reagan’s tax cuts and pro-growth policies, Newt’s low  individual and corporate tax rates, deregulation. and strong dollar  monetary policies will create a boom of new investment and economic  growth leading to the creation of tens of millions of new jobs over the  next decade. Plus, Newt’s record of helping Ronald  Reagan pass the Kemp Roth tax cuts and enacting the largest capital  gains tax cut in history as speaker of the House shows he can get this  plan passed and put it into action.</em></p>
<p><span id="more-398452"></span></p>
<p>Mr. Gingrich&#8217;s economic <a href="http://www.newt.org/solutions/jobs-economy">plan</a> includes an optional 15% flat tax, and a reduction in the corporate income tax to 12.5%. In October, Mr. Laffer<em>&#8217;s</em> editorial entitled, &#8220;Cain&#8217;s Stimulating &#8216;9-9-9&#8242; Tax Reform,&#8221; was <a href="http://online.wsj.com/article/SB10001424052970204346104576637310315367804.html">published</a> in the Wall Street Journal. In his supportive comments about the economic plan of then presidential candidate Herman Cain, Mr. Laffer observed that a flatter tax, similar to reforms made in the Tax Reform Act of 1986, would likely garner bipartisan support. He <a href="http://online.wsj.com/article/SB10001424052970204346104576637310315367804.html">wrote</a>:</p>
<p style="padding-left: 30px;"><em>With lower marginal tax rates (and boy will marginal tax rates be lower  with the 9-9-9 plan), both the demand for and the supply of labor and  capital will increase. Output will soar, as will jobs. Tax revenues will  also increase enormously—not because tax rates have increased, but  because marginal tax rates have decreased.</em></p>
<p><em><br />
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		<title>Alan Blinder’s Accidental Case for the Flat Tax</title>
		<link>http://biggovernment.com/dmitchell/2011/11/16/alan-blinders-accidental-case-for-the-flat-tax/</link>
		<comments>http://biggovernment.com/dmitchell/2011/11/16/alan-blinders-accidental-case-for-the-flat-tax/#comments</comments>
		<pubDate>Wed, 16 Nov 2011 13:23:12 +0000</pubDate>
		<dc:creator>Dan Mitchell</dc:creator>
				<category><![CDATA[2012 Budget]]></category>
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		<category><![CDATA[Flat Tax]]></category>
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		<category><![CDATA[Obama]]></category>
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		<category><![CDATA[supply side economics]]></category>
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		<guid isPermaLink="false">http://biggovernment.com/?p=375332</guid>
		<description><![CDATA[Alan Blinder has a distinguished resume. He&#8217;s a professor at Princeton and he served as Vice Chairman of the Federal Reserve.
So I was interested to see he authored an attack on the flat tax &#8211; and I was happy after I read his column. Why? Well, because his arguments are rather weak. So anemic that [...]]]></description>
			<content:encoded><![CDATA[<p>Alan Blinder has a distinguished resume. He&#8217;s a professor at Princeton and he served as Vice Chairman of the Federal Reserve.</p>
<p style="text-align: left;"><a href="http://biggovernment.com/files/2011/11/taxeburden.jpg"><img class="aligncenter size-full wp-image-376340" title="taxeburden" src="http://biggovernment.com/files/2011/11/taxeburden.jpg" alt="" width="465" height="371" /></a>So I was interested to see he authored an attack on the flat tax &#8211; and I was happy after I read his column. Why? Well, because his arguments are rather weak. So anemic that it makes me think there&#8217;s actually a chance to get rid of <a href="http://danieljmitchell.wordpress.com/2011/05/23/a-very-depressing-picture-of-tax-complexity-and-political-corruption/">America&#8217;s corrupt internal revenue code</a>.</p>
<p>There are two glaring flaws in his argument. First, he demonstrates a complete lack of familiarity with the flat tax and seemingly assumes that tax reform simply means imposing one rate on the current system.</p>
<p>Here&#8217;s some of what he wrote in <a href="http://online.wsj.com/article/SB10001424052970204358004577032311610518008.html">a Wall Street Journal column</a>.</p>
<blockquote><p>Many useful steps could be taken to simplify the personal income tax. But, contrary to much misleading rhetoric, flattening the rate structure isn&#8217;t one of them. The truth is that 100% of the complexity inheres in the definition of taxable income, which takes up millions of words in the tax laws. None inheres in the progressive rate structure. If you don&#8217;t believe that, consider the fact that the corporate income tax is virtually flat once a corporation passes a paltry $75,000 in taxable income. Is it simple? Back to the personal tax. Figuring out your taxable income can be quite an effort. But once that is done, most taxpayers just look up their tax bill on an IRS-provided table. Those with incomes above $100,000 must perform a simple calculation that involves multiplying two numbers together and adding a third. A flat tax with an exemption would require precisely the same sort of calculation. The net reduction in complexity? Zero.</p></blockquote>
<p>I can understand how an average person might think the flat tax is nothing more than applying a single tax rate to the current system, but any public finance economist must know that the plan devised by Professors Hall and Rabushka completely rips up the current tax system and implements a new system based on one tax rate with no double taxation and no loopholes.</p>
<p><span id="more-375332"></span></p>
<p>Heck, the <a href="http://www.hooverpress.org/productdetails.cfm?PC=1274">Hall/Rabushka book is online and free of charge</a>. But Blinder obviously could not be bothered to understand the proposal before launching his attack.</p>
<p>What about his second mistake? This one&#8217;s a doozy. He actually assumes that taxable income is fixed, which is a remarkable error for anyone who supposedly understands economics.</p>
<blockquote><p>&#8230;flattening the rate structure won&#8217;t make the tax code any simpler. It would, however, make the tax system far less progressive. Do the math. &#8230;Someone with $20 million in taxable income pays nearly $7 million in taxes under the current rate structure, with its 35% top rate. Replace that with a 23% flat tax, and the bill drops to just under $4.6 million.</p></blockquote>
<p>In other words, he assumes that people won&#8217;t change their behavior even though incentives to engage in productive behavior are significantly altered.</p>
<p>In <a href="http://danieljmitchell.wordpress.com/2011/11/06/a-lesson-on-the-laffer-curve-for-barack-obama/">a previous post</a>, I showed how rich people dramatically increased the amount of income they were willing to earn and report after Reagan lowered the top tax rate from 70 percent to 28 percent.</p>
<p>To Blinder, this real-world evidence doesn&#8217;t matter &#8211; even though the rich paid much more tax to the IRS after Reagan slashed tax rates.</p>
<p>For more information, here&#8217;s <a href="http://danieljmitchell.wordpress.com/2010/03/29/the-flat-tax-good-for-america-bad-for-washington/">my flat tax video</a>.</p>
<p><a target="_blank" href="http://www.youtube.com/watch?v=nhUOpNve1bY"><img src="http://img.youtube.com/vi/nhUOpNve1bY/default.jpg"/></a></p>
<p>And here&#8217;s <a href="http://danieljmitchell.wordpress.com/2009/04/10/the-global-flat-tax-revolution/">the video on the global flat tax revolution</a>. Interestingly, there are now about five more flat tax jurisdictions since this video was made &#8211; though Iceland abandoned its flat tax, so there are some steps in the wrong direction.</p>
<p><a target="_blank" href="http://www.youtube.com/watch?v=qBAr0MzRFU0"><img src="http://img.youtube.com/vi/qBAr0MzRFU0/default.jpg"/></a></p>
<p>Makes you wonder. If the flat tax is such a bad idea, why are so many nations doing so well using this simple and fair approach?</p>
<p>But be careful, as<a href="http://danieljmitchell.wordpress.com/2010/12/10/the-barack-obama-tax-reform-plan/"> this cartoon demonstrates</a>, simplicity can mean bad things if the wrong people are in charge.</p>
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		<title>Will the Stupid Party Agree to Higher Taxes and More Wasteful Spending?</title>
		<link>http://biggovernment.com/dmitchell/2011/11/11/will-the-stupid-party-agree-to-higher-taxes-and-more-wasteful-spending/</link>
		<comments>http://biggovernment.com/dmitchell/2011/11/11/will-the-stupid-party-agree-to-higher-taxes-and-more-wasteful-spending/#comments</comments>
		<pubDate>Fri, 11 Nov 2011 12:48:36 +0000</pubDate>
		<dc:creator>Dan Mitchell</dc:creator>
				<category><![CDATA[2012 Budget]]></category>
		<category><![CDATA[Federal Spending]]></category>
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		<category><![CDATA[Government spending]]></category>
		<category><![CDATA[Grover Norquist]]></category>
		<category><![CDATA[higher taxes]]></category>
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		<category><![CDATA[Taxation]]></category>

		<guid isPermaLink="false">http://biggovernment.com/?p=372616</guid>
		<description><![CDATA[I&#8217;m baffled by stupid Republicans (sorry to be redundant). Some GOPers have agreed to put taxes on the table. Not surprisingly, Democrats are praising them for this preemptive surrender, patting these Republicans on the head for being good little lapdogs. The Democrats are also high-fiving each other since they openly admit that tricking Republicans into a tax [...]]]></description>
			<content:encoded><![CDATA[<p>I&#8217;m baffled by <a href="http://danieljmitchell.wordpress.com/2011/10/02/the-sun-rises-in-the-east-the-pope-is-catholic-democrats-push-for-tax-hikes-and-republicans-often-are-the-stupid-party/">stupid Republicans</a> (sorry to <a href="http://danieljmitchell.wordpress.com/2011/03/25/the-stupid-party-strikes-again-republicans-may-raise-debt-limit-in-exchange-for-symbolic-bba-vote/">be redundant</a>). Some GOPers have agreed to put taxes on the table. Not surprisingly, Democrats are praising them for this preemptive surrender, patting these Republicans on the head for being good little lapdogs. The Democrats are also high-fiving each other since they openly admit that <a style="text-align: left;" href="http://danieljmitchell.wordpress.com/2011/06/15/the-not-so-secret-left-wing-agenda-to-increase-the-burden-of-government-and-how-to-stop-it/">tricking Republicans into a tax hike has been their top political goal</a><span style="text-align: left;">, but that&#8217;s an issue for another day.</span></p>
<p style="text-align: center;"><a href="http://danieljmitchell.files.wordpress.com/2011/11/charlie-brown.jpg"><img class="aligncenter" title="Charlie Brown" src="http://danieljmitchell.files.wordpress.com/2011/11/charlie-brown.jpg?w=300" alt="" width="300" height="258" /></a></p>
<p>And what are Republicans getting in exchange for violating their no-tax promises? As you might suspect, they&#8217;re getting nothing. For all intents and purposes, the left is saying &#8220;that&#8217;s a good start&#8221; and waiting for GOPers to make further concessions. Needless to say, this is very irritating. And I&#8217;m not the only person who is upset. Here is a <a href="http://www.politico.com/news/stories/1111/67998.html">column that I co-authored</a> along with Grover Norquist, Mike Needham, Phil Kerpen, Al Cardenas, and Duane Parde. We explain why higher taxes are a bad idea:</p>
<p><span id="more-372616"></span></p>
<blockquote><p>Some are now suggesting that instead of addressing the real problems our nation faces — by reducing government spending — the supercommittee should recommend tax increases to meet its deficit reduction targets. Tax increases are what politicians always do when they are not willing to govern—that is, to cut and reform government spending. The problem, of course, is that tax hikes crowd out and displace spending reform. &#8230;Advocates of&#8230;raising taxes&#8230;have put forward several unserious arguments. First, they say, “let’s compromise.” Let’s be balanced, they insist, and promise to cut some spending and raise some taxes. Having pushed spending way up, they now want to pretend this spending is normal or, at least, inevitable. It isn’t. &#8230;Why should anyone be asked to pay more taxes just so Washington can continue to overspend? &#8230;What’s more, there are good reasons to be wary – we’ve been down this road before. In 1982, President Ronald Reagan was promised three dollars of spending cuts for every dollar of tax hikes. The tax hikes were real. But spending — in real dollar terms — went up, not down. In 1990, the same trick was played out — this time at the expense of President George H.W. Bush and the American people. A two-to-one promise brought higher taxes and higher spending. When tax hikes are on the table, the talk about spending cuts evaporates. Oddly enough, the tax hikes remain. The second argument is: “We won’t raise tax rates – we will just reduce deductions and credits.” Nonsense. Closing tax loopholes is all well and good. But doing so to raise revenues is just as much a tax hike as raising tax rates. The tax hike crowd is trying to confuse tax hikes with tax reform. In fact, closing tax loopholes to raise revenue is ultimately antithetical to tax reform — there would then be less revenue available to use to cut tax rates.</p></blockquote>
<p>As a long-time advocate of the flat tax, I think the second point is very powerful. If you want tax reform, the last thing you should do is <a href="http://danieljmitchell.wordpress.com/2010/11/22/tax-loopholes-are-corrupt-and-inefficient-but-they-should-only-be-eliminated-if-every-penny-of-new-revenue-is-used-to-lower-tax-rates/">le</a><a href="http://danieljmitchell.wordpress.com/2010/11/22/tax-loopholes-are-corrupt-and-inefficient-but-they-should-only-be-eliminated-if-every-penny-of-new-revenue-is-used-to-lower-tax-rates/">t the politicians take away loopholes without using the revenue to finance lower tax rates</a>. But the most important argument is the first one. Simply stated, <a href="http://danieljmitchell.wordpress.com/2011/03/11/norquist-is-right-and-coburn-is-wrong-tax-increases-will-lead-to-more-spending-not-lower-deficits/">higher taxes mean higher spending</a>. Period. End of argument.</p>
<p>If taxes increase $300 billion, that means $300 billion more spending. If taxes increase $600 billion, that means $600 billion more spending. Since America&#8217;s fiscal problem is too much spending, why should we let politicians have more money so they can make government even more bloated and wasteful?</p>
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		<title>Gingrich&#8217;s Campaign Performance Transcends His &#8216;Personal Baggage&#8217;</title>
		<link>http://biggovernment.com/sberry/2011/10/29/gingrichs-campaign-performance-transcends-his-personal-baggage/</link>
		<comments>http://biggovernment.com/sberry/2011/10/29/gingrichs-campaign-performance-transcends-his-personal-baggage/#comments</comments>
		<pubDate>Sat, 29 Oct 2011 19:37:07 +0000</pubDate>
		<dc:creator>Dr. Susan Berry</dc:creator>
				<category><![CDATA[2012 Election]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Flat Tax]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Tax Reform]]></category>
		<category><![CDATA[Uncategorized]]></category>
		<category><![CDATA[conservatives]]></category>
		<category><![CDATA[Constitution]]></category>
		<category><![CDATA[debate]]></category>
		<category><![CDATA[Newt Gingrich]]></category>
		<category><![CDATA[Presidential election 2012]]></category>
		<category><![CDATA[republican nomination]]></category>
		<category><![CDATA[Republicans]]></category>
		<category><![CDATA[Rick Perry]]></category>

		<guid isPermaLink="false">http://biggovernment.com/?p=360228</guid>
		<description><![CDATA[Mitt Romney is still flip-flopping even as he seems ever more confident of the Republican nomination. Rick Perry is breathing life into his campaign, after his poor debate showings, with his new flat tax plan, which has been fairly well received. Herman Cain, the intelligent, accomplished, and optimistic man he is, nevertheless is encountering flip-flopping [...]]]></description>
			<content:encoded><![CDATA[<p>Mitt Romney is still <a href="http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/morning-examiner-romney-looking-past-primary?utm_source=Morning%20Examiner:%20Romney%20looking%20past%20primary%20-%2010/26/2011&amp;utm_medium=email&amp;utm_campaign=Washington%20Examiner:%20Morning%20Examiner">flip-flopping</a> even as he seems ever more confident of the Republican nomination. Rick Perry is breathing life into his campaign, after his poor debate showings, with his new flat tax <a href="http://www.rickperry.org/">plan</a>, which has been fairly <a href="http://www.newsmax.com/Headline/Perry-flat-tax-plan/2011/10/25/id/415653?s=al&amp;promo_code=D55B-1">well received</a>. Herman Cain, the intelligent, accomplished, and optimistic man he is, nevertheless is encountering flip-flopping problems of his <a href="http://www.washingtonpost.com/blogs/fact-checker/post/herman-cain-and-abortion-flip-flop-flip/2011/10/24/gIQAZ16NDM_blog.html?wprss=fact-checker">own</a>, particularly around his stance on abortion and the question of the number of &#8220;9&#8217;s&#8221; in his economic plan. Ron Paul, polling the strongest he ever has over the years, still <a href="http://www.rasmussenreports.com/public_content/politics/general_politics/october_2011/voters_lukewarm_towards_eliminating_cabinet_departments_to_reduce_spending">needs</a> to convince more Americans that the elimination of major agencies of the federal government won&#8217;t make the country fall apart. Michele Bachmann may be <a href="http://nation.foxnews.com/michele-bachmann/2011/10/21/report-bachmanns-new-hampshire-campaign-staff-resigns">fizzling</a> out, despite her conviction to repeal Obamacare, and Rick Santorum, another individual of strong conservative convictions, still can pull ahead.</p>
<p><a href="http://biggovernment.com/files/2011/10/newt-gingrich.jpg"><img class="aligncenter size-full wp-image-362660" title="newt gingrich" src="http://biggovernment.com/files/2011/10/newt-gingrich.jpg" alt="" width="448" height="332" /></a></p>
<p>And from the shadows of what is called his &#8220;personal baggage,&#8221; former House Speaker Newt Gingrich is gradually <a href="http://www.washingtonpost.com/blogs/the-fix/post/the-re-rise-of-newt-gingrich/2011/10/25/gIQAIuUzIM_blog.html">rising</a>. Turns out Mr. Gingrich had a flat tax <a href="http://qctimes.com/news/opinion/editorial/columnists/optional-flat-tax-will-launch-recovery/article_1df5aeba-fcea-11e0-8b42-001cc4c03286.html#ixzz1biet4S22">plan</a> way before Mr. Perry, one that is favored by many conservatives/libertarians because of its flat 15% tax rate, as opposed to Mr. Perry&#8217;s 20%. Speaker Gingrich provides a comparison of both his and Rick Perry&#8217;s plans on his <a href="http://www.newt.org/news/lets-bump-plans-comparison-gingrich-and-perrys-flat-tax-plans">website</a>.</p>
<p>An informal poll taken at <a href="http://hotair.com/archives/2011/10/25/gingrich-hey-what-about-my-flat-tax-plan/">Hot Air</a> on Tuesday shows that Ron Paul&#8217;s economic plan garners 56% of voters&#8217; support, followed by Newt Gingrich&#8217;s plan at about 25%. Rick Perry&#8217;s plan received about 9% of the vote, and Herman Cain came in with about 7%. Mitt Romney&#8217;s more complicated plan received under 2% of the vote.</p>
<p>We are now coming to terms with the fact that none of the Republican candidates for President are perfect. Many of us like different qualities in each of them and would like to &#8220;build&#8221; our own candidates from various components. We soothe ourselves a bit by considering the matrix of presidential/vice-presidential ticket possibilities. Perhaps if we pair them up, we can get the best qualities of at least two of them? But really, there can only be one President.<span id="more-360228"></span></p>
<p>By vetting the candidates in as many venues as possible we can make the best decision. Over the weekend, C-SPAN covered the Iowa Faith and Freedom Fall Banquet, which included short speeches by many of the Republican candidates, and- something that is missing in the traditional debates- <em>the same questions posed to each of them</em>.</p>
<p style="text-align: center;"><a target="_blank" href="http://www.youtube.com/watch?v=fBfTtFHZtwg"><img src="http://img.youtube.com/vi/fBfTtFHZtwg/default.jpg"/></a></p>
<p>Newt Gingrich brought the house down. Yes, the same Newt Gingrich who has <a href="http://michellemalkin.com/2007/03/08/gingrichs-baggage-gotten-on-my-knees/">&#8220;personal baggage.&#8221;</a> He had an affair of his own during the Clinton/Lewinsky scandal. He did a climate control ad with Nancy Pelosi. He may have reached too far over the aisle. He slammed Paul Ryan&#8217;s budget, then clumsily <a href="http://www.politico.com/news/stories/0511/55171.html">apologized</a>. True, some conservatives have declared his candidacy null and void, but given the imperfections we are discovering in each of the candidates, Mr. Gingrich is a steady contender.</p>
<p>For one thing, Newt Gingrich, like Ron Paul, is an accomplished Constitutional historian. Conservatives and libertarians who want to get the country back on the track of the founders&#8217; principles can trust his understanding of the documents they drafted. Second, Mr. Gingrich is a highly competent debater, fully able to spar on the details without losing sight of the main point, as evidenced by his continued <a href="http://qctimes.com/news/opinion/editorial/columnists/optional-flat-tax-will-launch-recovery/article_1df5aeba-fcea-11e0-8b42-001cc4c03286.html#ixzz1biet4S22">theme</a>:</p>
<p style="padding-left: 30px;"><strong><em>The coming economic boom will begin the minute the television networks announce the defeat of President Obama’s reelection bid on Election Day 2012.</em></strong></p>
<p>In contrast, Rick Perry has <a href="http://blog.chron.com/rickperry/2011/10/perry-tells-bill-oreilly-that-romney-will-say-whatever-i-need-to-say-to-win/">decided</a> that, since he is not skillful at debating, Americans should not pay attention to his performance during these events. &#8220;It&#8217;s not like he&#8217;s going to have to debate anyone when he&#8217;s President&#8221; seems to be the line taken by his campaign. A few things contradict that:  first, the Republican nominee<strong><em> </em></strong>will have to debate President Obama. Does Mr. Perry plan to decline those invitations? If he and the president agree to debate, shouldn&#8217;t Republicans want their nominee to be able to <em>articulate</em> his positions? Remember the smooth-talking Barack Obama of 2008? Shouldn&#8217;t Mr. Perry hope to gain the votes of any independents watching those debates? Assuming Mr. Perry wins the general election, shouldn&#8217;t Americans want their President to clearly <em>articulate</em> the issues the nation is facing, particularly when he is likely to be put through the liberal media meat grinder? We have just been through three years of a President and administration who care little about the mixed messages they give to the American people. Perhaps we could expect our next president to make clear communication a priority.</p>
<p>In addition, the ability to debate cannot be written off as small potatoes. It involves critical thinking skills and requires one to assess statements quickly and coherently, usually under the pressure of time. The Presidency requires all of these skills, especially in the role of Commander-in-Chief. Rick Perry may have been a very effective governor for the past decade, but whether he will simply dismiss skills he does not have as inconsequential for the presidency begs the question of whether he is, in fact, ready to be President.</p>
<p>Newt Gingrich also appears to have purposefully avoided serious arguments with the other candidates, keeping the focus, instead, on the current President and calling out the media for its attempts to whip up hostility among the Republican candidates. On Sean Hannity&#8217;s radio <a href="http://www.hannity.com/show/2011/10/25">program</a> Tuesday, Mr. Gingrich spoke in positive terms about his opponents, mentioning only differences about policy or ideas. He is the candidate who has followed Ronald Reagan&#8217;s 11th Commandment thus far.</p>
<p>By the time Republicans choose their nominee, all of the candidates will have &#8220;baggage&#8221; of some type. It&#8217;s the human part of the vetting process. Plan to look at the candidates in as many forums as possible in order to find a) the person who can assuredly beat Barack Obama in 2012 and b) the person who can best restore constitutional authority to this nation.</p>
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