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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Ryan Ellis to discuss Herman Cain’s 9-9-9 Plan and Rick Perry’s Cut, Balance and Grow proposal. We’ll talk about which one of these has a better chance of making it through Congress, the impact they’ll have on your bottom line, and whether they will be able to restart America’s failing economy.

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:

9-9-9: A Discussion with Herman Cain
Governor Rick Perry’s Tax Reform Plan
ATR Summary of Perry Tax Plan
Cain’s Responses on 9-9-9 Answered
Herman Cain Was Against a VAT Before He Was For It
Perry tax plan would raise either $4.7 trillion or $1.7 trillion less than CBO baseline through 2020
On second glance, Perry flat tax scores better on revenue and growth
A Slow-Growth America Can’t Lead the World
Herman Cain’s 9-9-9 Plan
Rick Perry’s Cut, Balance and Grow

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Follow Ryan on Twitter

The hosts and guests of Coffee and Markets speak only for ourselves, not any clients or employers.

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Kelly Cobb, Government Affairs Manager for Americans for Tax Reform to discuss the section of the Dodd-Frank bill that institutes price-controls on debit card transactions, how this new law is effecting banks and how the changes mean a worse, not better environment for consumers.

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:

Little saved from lower debit fees
Like your free checking account? Prepare to say goodbye
ATR Will Rate a Vote on Tester Interchange Fee Amendment
Kelly Cobb at ATR

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The hosts and guests of Coffee and Markets speak only for ourselves, not any clients or employers.

So we got ourselves a Super Congress…hopefully, Boehner will put himself, Paul Ryan, and Joe Walsh on it.  I want the imperfect Tea Party freshman who allegedly owes child support to have a voice.   They are all likely imperfect; I prefer one who has already been sullied, and argues well on MSNBC.    But if not Joe Walsh, then tap Ron Paul.

Job #1 of the Super-Congress is Tax Reform.  This is our best chance to simplify American tax policy so a second grader can explain it.

Grover must pledge: Cutting the Tea Party's taxes matters most!

Crucial point: Grover Norquist is a good guy, but my main concern is not do taxes go up overall?

What I care about is: Do the Tea Party’s taxes go down a lot?

If we see overall tax revenues increase because GE is not getting green dollars, while all the small business owners are paying MUCH MUCH less – we have a winner.   You hear that Pelosi?  I just gave you some solace; render unto the patriots their due, and at least you can show your team some Fortune 1000 scalps.  Of course they won’t donate to your team any longer, but you should only get donations from the lower classes anyway.

Let’s be straight forward about what we want to see in a new tax policy:

1. The bottom half of America must pay at least as much as they pay now.
2. The Wall Street investor class and the Fortune 1000 management can pay more.
3. The owners of small businesses across the US, the savers, the scrimpers, the Tea Party faithful pay MUCH LESS.

Because when we say “broaden the base, end the loopholes, and lower the tax rates” – the above is exactly what we really mean.    And we can’t let Grover Norquist’s Tax Pledge screw us up.

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Republicans are fighting about taxes. But they’re fighting with each other, not Democrats. I’ve already written about this topic once, but the issue has become more heated, and the stakes have become much larger. And this time I’m going to focus on the political implications.

First, some background. One side of this battle is led by Grover Norquist of Americans for Tax Reform, who is the organizer of the no-tax-increase pledge. Grover argues that America’s fiscal problem is too much spending and that higher taxes are economically and politically foolish.

The other side of the conflict is led by Senator Tom Coburn of Oklahoma, who argues that America’s fiscal problem is too much red ink and that higher taxes are a necessary price to strike a deal with Democrats that supposedly will reduce budget deficits.

The first  skirmish in this fight involved ethanol tax credits. Senator Coburn wanted to get rid of the credit, which everyone agrees is economically destructive and fundamentally corrupt.

But there’s a catch. when you get rid a tax preference, even an odious one, that means the government gets more money. In other words a tax increase. Senator Coburn has no problem with that outcome.

Grover Norquist says that all of the arguments against ethanol are correct, but he says that any proposal to get rid of the credit should be accompanied by a tax cut of equal magnitude.

If the ethanol credit is worth about $6 billion per year, as Senator Coburn’s office states, then find a tax cut of similar size, pair it with the ethanol credit, and kill two birds with one stone. Seems like the best of all possible outcomes, which is why Grover is correct from a policy perspective.

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There’s a significant debate now taking place in Washington – largely behind closed doors, but sometimes covered by the media – on whether fiscal conservatives should maintain a rigid no-tax-increase position. One side of the debate features Grover Norquist of Americans for Tax Reform, which is the organization that maintains the no-tax increase pledge. The other side features Senator Coburn of Oklahoma, who is part of a small group of GOP Senators who might be willing to increase the tax burden as part of a deal that supposedly reduces deficits.

I’m a huge fan of Senator Coburn, who was in favor of cutting wasteful spending before it became fashionable. His office, for instance, releases a “Pork Report” every couple of days. But you shouldn’t read it if you have high blood pressure, because it will confirm (and reconfirm, and reconfirm, ad nauseum) your worst fears about tax dollars getting wasted.

Nonetheless, I’m on Grover’s side on this tax debate for two reasons.

First, we have a spending problem, not a revenue problem or a deficit/debt problem. Red ink is undesirable, to be sure, but it is a symptom of the underlying problem of a government that is too big and spending too much.

But don’t believe me. Here is a chart from the House Budget Committee showing long-run projections for spending and revenues over the next 70 years. As you can see, the long-run fiscal shortfall is completely caused by higher spending. In other words, 100 percent of red ink is due to government spending. So why put taxes on the table?

But this chart actually understates the case against tax increases. It uses revenue numbers from the Congressional Budget Office’s “alternative” forecast, which shows taxes steady at 19.3 percent of GDP. That’s more than the historical average of about 18 percent of GDP, which surely indicates that revenues are not the problem.

However, that 19.3 percent estimate is completely artificial. As CBO states in its long-run forecast, “the alternative fiscal scenario also incorporates unspecified changes in tax law that would keep revenues constant as a share of GDP after 2020.”

I’ll actually be delighted if we can permanently keep federal revenues below 20 percent of GDP, but I’m not overly optimistic because the tax burden is projected to automatically increase over time. And I’m not talking about the expiration of the Bush tax cuts or the alternative minimum tax. Yes, those factors would push up tax revenues (at least based on static revenue estimates), but the tax burden also is expected to climb because even modest economic growth slowly but surely pushes more and more people into higher tax brackets.

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Governor Mitch Daniels of Indiana has triggered a spat among policy wonks with his recent comments expressing sympathy for a value-added tax (VAT). Kevin Williamson of National Review is arguing that a VAT will probably be necessary because there is no hope of restraining spending. Ryan Ellis of Americans for Tax Reform jumped on Williamson for his “apostasy,” arguing that a VAT would be bad news for taxpayers. From a policy perspective, I’m very much against a VAT because it will finance bigger government, as explained in this video.

That being said, Kevin Williamson makes a good point when he says that some supply-siders have neglected the spending side of the fiscal ledger. And it certainly is true that Republicans don’t seem very interested in curtailing the growth of government. But does this mean, as Williamson argues, but that our choices are limited to 1) a 36 percent spending cut, 2) catastrophic deficits and debt, or 3) a European-style value-added tax.

I actually think it would be a great idea to reduce the budget by 36 percent. That would bring the burden of federal spending back down to where it was in 2003. Notwithstanding the screams from various interest groups that this would generate, nobody was starving in the streets when the budget was $2.3 trillion rather than today’s $3.5 trillion. But Kevin is unfortunately correct in noting that this type of fiscal reform won’t happen.

Kevin is wrong, however, in saying that we therefore have to choose between either Greek-style deficits or a VAT.

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Conservative luminaries led by anti-abortion rights activist Phyllis Schlafly and anti-tax crusader Grover Norquist last Thursday penned a decidedly anti-Net Neutrality open letter to Members of Congress, in which they warned that the new regulations proposed by the Federal Communications Commission (FCC) would curb innovation and severely limit the ability of Internet Service Providers (ISPs) to prioritize valuable content over otherwise objectionable and obscene material.

“There is no evidence of a market failure to justify the burdensome government regulations some are proposing,” the letter read. “Unfortunately, it appears that a few FCC commissioners lack an understanding of how regulations affect investment.”

Proponents of the FCC’s proposed broadband rules note that the issue of Net Neutrality is one in which conservatives are purportedly split. The Christian Coalition of America, a social conservative advocacy group, endorsed the Left’s overtures at re-regulating the Internet.  Likewise, Gun Owners of America have also voiced support for the controversial policy.

But last week’s letter–whose signatories include the likes of American Family Association President Tim Wildmon, Tom McClusky of the Family Research Council, prominent Catholic Deal Hudson and Mrs. Schlafly–suggest the Right, as a virtually unified whole, has turned a page in the debate over a dynamic Internet, and now is staunchly and almost uniformly opposed to what some critics call “a government takeover of the Internet.”

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The Poker Players Alliance — a million-member strong grassroots organization that defends poker rights — cosponsored the Conservative Political Action Conference (CPAC) for the second consecutive year.  Poker players, still reeling over past efforts to ban online and other forms of poker, have been actively reaching out to conservatives for support for their right to play, and cosponsorship of CPAC is part of this outreach effort.  They were pleased at their reception at this year’s event and feel support for their position within the broader conservative movement will continue to increase.

Displaying the confidence that a year of solid wins on Capitol Hill has earned them, the PPA went to CPAC ready to take on the dwindling minority who would ban poker as well as those who believe poker rights ought not be a conservative concern.  They came armed with handouts on why principled conservatives ought to oppose a big government prohibition on online poker, copies of pro-poker articles by George Will, Walter Williams, and Jacob Sullum, free t-shirts, and 2004 World Poker Champion Greg Raymer, who was on hand to sign autographs.

2004 World Poker Champion Greg Raymer at CPAC

They also showed off the alliances they have with many within the conservative movement, including FreedomWorks, CPAC straw poll winner Rep. Ron Paul (video of Rep. Paul backing PPA’s position), and Americans for Tax Reform.

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President Obama has always made a pretty big deal about not working with “lobbyists”. Registered lobbyists can’t get stimulus money, can’t be White House advisors and are not allowed access to meetings and summits. So how does one get around that? It’s simple; you just don’t register as a lobbyist. That’s what Andy Stern did and it may come back to bite him.

Grover Norquist, President of Americans for Tax Reform (ATR) and me, as Executive Director of the Alliance for Worker Freedom (AWF) formally requested an investigation by the acting United States Attorney Channing D. Phillips, Esq., into the potentially illegal lobbying activities of the Service Employee International Union (SEIU) President Andy Stern.

In a letter hand delivered today to Mr. Phillips, Senate Secretary Erickson and House Clerk Miller, we wrote:

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