Free Market Carnivore's Blog

In our last post, we raised the question as to how much impact voter contacts were having on members of Congress considering the monster omnibus tax bill.  Now we have an answer.

Cattlemen and voters who sent a message last month that they had had it with over spending, over regulating and over political manipulation could congratulate themselves on a great week last week, especially if they took the time to contact Congressmen over the tax bills.

Harry Reid thought he had the votes to pass the colossal omnibus spending bill at the beginning of the week but several members of Congress said it was the calls and e-mails from the countryside to Republican senators that forced them to reconsider.  Without the votes of nine Republican senators  — whom Harry railed at nastily but did not call out by name —  he couldn’t advance the bill and pulled it.  It is interesting that while the bill included $1 trillion in spending, most of the attention was focused on the earmarks.

Cagey Harry enlisted the aid of some of the biggest earmarkers from both parties in assembling the omnibus, in order to make sure both parties had some reasons to vote for the bill.  He went back to the early months of this session, reportedly without consulting members’ present positions on the requests, making sure he had earmarks from Republicans he could embarrass, including ones who have since voted for earmark bans.

All of that just served to highlight the real problem with earmarks:  it is not the amount of money that is most important but the way they serve as bargaining chips, incentives or near bribes to get dubious legislation passed.  Few of us have forgotten that Obamacare would most likely never have become law without the Cornhusker Kickback, the Louisiana Purchase, Gatoraid and other unsavory deals that literally bought the votes needed.

The tax extension bill – misnamed the tax cut bill – met a different fate but certainly accomplished things conservatives and businessmen wanted.  Both conservatives and the far left opposed the bill, for diametrically opposite reasons, but when the chips were down enough votes for both sides were there.  Republicans would put up with more unfunded spending to make sure they had the tax extension nailed down for all earners, including the higher income earners that run businesses and hire people. The Democrats did not want to be painted as the folks who raised taxes during a recession.

Perhaps most disturbing to livestock producers, farmers and small businessmen was the primary objection of many of the left’s Democrats who opposed the bill.  They reserved their most obnoxious, near hysterical vitriol for reinstating the Death Tax at what they considered unconscionably low rates of 35% on estates over $5 million.  While we consider it very possible the new Congress is likely to try to eliminate or further lower the Death Tax rates or increase the threshold, it’s obvious they will get fierce opposition from the far left Democrats that will be left in the Congress.

We also hope the new Congress will lower the capital gains tax rate, lower some income brackets and lower the corporate tax rate.  Japan’s parliament recently voted to lower their corporate tax rate, making the United States of America the most unfriendly, most tax punitive nation to corporate business in the world.  What a wonderful title to hold, for the supposedly most freedom-loving, free enterprise, capitalist nation on earth!

Of course, many of the conservative Tea Party members coming in are bolder yet, talking about real tax reform.  Perhaps it is possible that in the present tax-hating environment, there is a real chance that those who see low tax rates and fewer constricting regulations as the way to stimulate major growth and generate the amounts of revenue necessary to pay down the national debt could win out.

Now that would be reason for the nation to celebrate.  One thing we do know: the Keynesian theory of forcing growth and jobs by pumping up government spending has yet again proved itself an utter failure.  Maybe with that lesson fresh and obvious to everyone, we can get the opposite done and see real growth take off.