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Thursday, December 16, 2010

CHUCK ROGÉR: NEW AMERICA FOUNDATION PRESIDENT PUSHES CARBON TAX AND ‘GREEN’ ECONOMIC FALLACIES

Republicans seem poised to get the Bush tax cuts extended. This has contributed to a "dismal two weeks for [Obama's] economic policy," says Ted Halstead in a Financial Times commentary. Halstead is founder and president of the New America Foundation.

When you see "New America" in the name of an organization, you know that you're not dealing with people who value traditional America. Indeed, Mr. Halstead seems to have little use for traditional America.

Halstead clings to the repeatedly and soundly disproved notion that government can create jobs. He is unhappy that a resurgent GOP "preclude[s] any sizeable government outlays on jobs over the next two years." Halstead launches into a shrill, unsupportable allegation, claiming that America's tax system "penalise[s] [sic] labour [sic], while either ignoring or subsidising [sic] pollution, resulting in fewer jobs and more environmental degradation."

What is Halstead talking about? No way to tell, really. For in true progressive fashion, Mr. Halstead offers zero proof for wild contentions. But considering the fact that America's wealthy (top 1% of earners) pay almost 40% of all income taxes and fund the creation of a huge proportion of America's jobs, while the other 99% of taxpayers pay only 60% of taxes and provide the labor for those jobs, Halstead's claim is immediately seen as false.

But truth is the last thing on the mind of an ideologue. And truth never even enters the mind of a "green technology" zealot.

Halstead engages in a one-sided discussion aimed at slamming the Obama-Republican agreement to keep income tax rates flat for at least two more years and cut payroll taxes. Halstead tries to make it appear that Obama has caved to GOP irresponsibility and laments the revenue shortfall that the scenario produces. But Halstead never acknowledges that the main reason for revenue shortage has been and will continue to be out-of-control spending--which is not being cut.

Mr. Halstead's solution to the revenue shortfall?

The best way to replace this revenue would be a carbon tax (and possibly other environmental fees) which could raise hundreds of billions of dollars, while reducing America’s carbon footprint and oil dependence, and supporting green jobs.


Amazing.

Here are the economic equations (principles) at work.

1) When spending = income, "balanced budget."
2) When spending < income, "surplus."
3) When spending > income, "deficit."

The federal government's income consists of many components, but the lion's share is comprised by revenue generated from taxation. So let's simplify. America's situation is represented by equation 3) above, which becomes:

spending > tax revenues

Obama, the Dems, and Mr. Halstead pretend that the left side of the equation is sacrosanct. The one and only hard and fast "progressive" economic principle is that spending must rise. Social engineering costs money. Success is always a mere gazillion dollars down the road.

Halstead complains of the tax revenue shortfall under the plan pushed by the GOP and reluctantly backed by Obama--a plan which would keep the Bush tax cuts in place and reduce payroll taxes by two percentage points. Halstead's solution is quintessential progressive nonsense: Institute an entirely new tax.

Not just any tax, but a tax that will kill American business, the economy, and long-term prosperity dead, dead, dead. Halstead wants to tax carbon emissions.

The man has the flat-out gall to then suggest that the carbon tax, which would raise the cost of doing business across every segment of the economy, would "pave the way for a rapprochement between the Obama administration and business."

A good shafting will mend hard feelings between shafter and shaftees? To call Mr. Halstead's proposal idiotic would be kind.

Halstead then foists another fallacy.

Yet, sooner or later, America must raise new taxes to reduce its deficit, and Republicans too must shift their philosophical objections to all tax increases.


As Cato Institute's Dan Mitchell has shown, and economic blogger Scott Grannis recently confirmed, Halstead's claim is simply not true. But to realize this, Halstead would have to acknowledge the equations above. And it never occurs to dogma pushers like Halstead that government could actually shrink, that spending should drop.

Halstead crowns his incoherent analysis with an irrational conclusion.

In short, Mr. Obama should put such a plan before Congress. And if it fails, he should make it a central pillar of his re-election campaign too.


Yeah, go for it, Barack. Promise the American people that if they vote for you again, then you'll explode the cost of living and murder American prosperity.

Progressives are amazing creatures. They don't live in our world. They live in a world in which the laws of science, human nature, and economics defer to brilliant theories. Perfection dwells in the minds of the enlightened ones who choose to live an alternative reality.

But progressives in general and greenies in particular are now being exposed for the deceitful preachers that they have always been. Americans are refusing to follow starry-eyed zealots into the poor house.

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© 2010 Chuck Rogér

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