Congress Spending Cuts Could Do More Harm Than Good

Jan 17, 2012, 2:44 pm EDT

Voters often respond with loud approval when the government decides to tighten its own belt, but a recent analysis suggests such cuts might be doing more harm than good.

According to the Sunlight Foundation – an organization with a stated goal to “catalyze greater government openness and transparency” – recent and future House cuts threaten the quality of work being done in Congress, and risk higher dependence by politicians on lobbyists.

In early 2011, the House of Representatives voted to cut its operating budget by 5%. That has resulted in a 7.4% cut in salaried staff (948 positions), a 62.5% cut in computer spending and a 30.7% drop in office supply spending. And the 2012 Legislative Branch Appropriations Act will cut into House pockets even deeper, with the branch set to hack off another 6.4% in spending. Read 

5 Takeaways from the South Carolina Debate

Jan 17, 2012, 2:06 pm EDT

A quick look at last night’s South Carolina debate by yields a few essential points:

1. Mitt Romney is in for a hard week.

He hemmed and hawed about releasing his tax returns in April, and even though the question was expected, Romney still seemed uncertain in his response. Read 

Why Ron Paul Is the Fix for What Ails This Country

Jan 17, 2012, 9:04 am EDT

I will grant that Ron Paul is both intelligent and wise. And yes, it is true, that he is the most effective champion of human liberty in public life and seems to know more about the U.S. Constitution than any other elected official. He does seem to be personally kind and is even patient with the most obnoxious media figures. And it’s clear from his voting record that he is a man of principle and integrity.

Still, I wouldn’t hire Ron Paul…

…to fix my car. He could be a backyard automotive tinkerer for all I know. But there is no public evidence to that effect. Read 

Buffett Toys with Republicans on Taxes

Jan 13, 2012, 10:53 am EDT

In an August 2011 op-ed piece in the New York Times, Warren Buffett declared that wealthy Americans paid too little in taxes. The response to the piece was predictably partisan, with Sen. Mitch McConnell (R-Kentucky) saying Buffett should feel free to “send in a check” to the U.S. Treasury to assuage his guilt. Sen. John Thune (R-South Dakota) followed that up by introducing the “Buffett Rule Act,” which would allow rich folks to donate more in taxes to help pay down the national debt.

For an interview published in the new issue of Time magazine, Buffett told Rana Foroohar that Thune’s proposal was “a tax policy only a Republican could come up with.” If nothing else, Republican sparring on Buffett’s tax stance seems to have inspired the CEO of Berkshire Hathaway (NYSE:BRK-A) to play along and up the ante. Buffett said would donate $1 toward paying down the national debt for every dollar donated by a Republican in Congress, and for McConnell, $3 for every $1 McConnell donates.

An aide to McConnell told Reuters that Buffett should consider expanding his matching offer to President Barack Obama and his Democrats. Read 

What the New Hampshire Primary Reveals

Jan 11, 2012, 1:19 pm EDT

Mitt Romney won an expected and decisive victory in New Hampshire’s Tuesday primary. As the GOP field pivots to South Carolina, Romney will likely clinch the nomination. Although a strong showing by Newt Gingrich or a coalescing of social conservatives around one candidate, Rick Santorum probably, could slow Romney’s momentum. Still his coronation as the Republican candidate seems inevitable.

What else did we learn from the New Hampshire primary?

First, Ron Paul is a force to be reckoned with. He won 24% of the vote yesterday, a stronger showing than was expected. Although the Republican commentariat has dismissed his candidacy from the very beginning, he has won almost a quarter of the vote in the first two states, and his views and supporters simply cannot be ignored. Read 

The Journal’s Tax Story Comes Up Short

Jan 11, 2012, 12:40 pm EDT

The Wall Street Journal recently missed a big point about the tax burdens facing millions of small businesses.

Its article More Firms Enjoy Tax-Free Status” argues that increasing numbers of businesses are organized so “they don’t pay a penny in federal corporate income tax.” That’s true, but as the American Family Business Institute notes, those business owners pay taxes on their business through their personal income taxes.

“Unfortunately, an implication of characterizations like this is that it implicitly calls for hiking individual income taxes, which ensnares more and more family businesses,” AFBI spokesman Charles Chamberlayne said in a statement to InvestorPlace. “For business owners filing via personal income taxes, their family business likely accounts for the majority of what is considered personal income and is subject to a higher marginal tax rate.” Read 

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