Newt Gingrich and I go a long way back to the beginning of the Reagan supply-side revival of free market capitalism. I thought we shared that philosophy. But his attacks on Bain Capital using the class envy language of the left against capitalist success is a great disappointment to me. Newt resumed that Bain attack when he said in Florida that Mitt “lives in a world of Swiss bank accounts and Cayman Island accounts and automatic $20 million income for no work.”
Romney’s success earned his income. And his successful investments all represent market opportunities. However, once again I fear that Newt is all too willing to sacrifice his principles for political expediency in the heat of the campaign. Here is the interview with my criticisms and Newt’s responses (in two parts):
Thursday, January 26, 2012
President Obama's proposal to increase taxes on the rich is "designed to come at me," GOP presidential contender Mitt Romney told me in an exclusive interview yesterday.
In his State of the Union speech Tuesday night, Obama proposed a minimum 30 percent tax rate on Americans earning more than $1 million a year.
The proposal—known as the "Buffett Tax" after Warren Buffett famously said his secretary pays a higher tax rate than he does— was a key part of the president's populist push for "fairness" in his speech to the nation.
The plan is "designed to come at me if I'm the nominee," Romney said in a taped interview. "If I happen not to be the nominee, he'll still take the 99-versus-one attack. He's really trying to divide America."
Romney, who gave a glimpse inside his personal fortune on Tuesday by releasing his U.S. tax returns, paid an effective tax rate of 13.9 percent in 2010 and expects to pay a 15.4 percent effective rate when he files his return for 2011.
Those rates are far below the top income tax rate on wages, which is 35 percent, because the U.S. tax code favors capital gains and other investment income by taxing them at 15 percent.
"The question is whether we're going to eliminate the capital gains tax break," Romney said. "So if you say we're going to raise that dramatically, you're going to choke off a lot of the capital that goes into creating new enterprises and creating jobs. It's the wrong way to go."
Romney said Republicans are not all about the rich. "I'm fighting to help middle class Americans get better jobs and better incomes. People who have been successful understand the path to success — we want everyone to enjoy success in America."
Tuesday, January 24, 2012
When President Obama outlines his goals for 2012 during Tuesday’s State of the Union address, he shouldn’t expect a lot of cooperation from Republicans, senate Minority Leader Mitch McConnell (R-Ky.) told “The Kudlow Report” Monday.
“With the Obama economy established now … unemployment is still at 8 ½ percent,” McConnell said. “It didn’t work, and we’re not interested in doing more of the things that don’t work.”
Obama will use his State of the Union address to outline a lasting economic recovery that will “work for everyone, not just a wealthy few.” He is expected to call for higher taxes on the rich, among other things.
While it sounds like more gridlock ahead in Washington, McConnell put the blame squarely on the president.
He said Obama was “AWOL” last year on his bus tour when Republicans wanted to tackle tax reform and entitlements, and he expects more of the same this year.
“He was not involved whatsoever,” McConnell said. “So I’m not optimistic, frankly, that in an election year that he’s likely to be any more engaged than he was last year.”
What’s more, he thinks the logjam in the nation’s capital is part of Obama’s agenda.
“That’s his strategy … to demonize Congress, to complain because he can’t continue to get everything he wants, like he did the first two years,” he said. “It’s all about his re-election and not about the country.”
One thing that McConnell thinks will get done is the payroll tax cut extension, which was extended for only two months in December when Congress couldn’t come to an agreement.
“We’ll be back at trying to figure out how to do that for the balance of the year and how to pay for it,” he said. “We don’t want to add to the deficit.”
Thursday, January 19, 2012
Might a strong Newt Gingrich debate performance tonight trump the ABC Nightline interview with Newt’s ex-wife Marianne? Remember, the debate comes before Nightline. And the roughly five million to six million people who watch the debate will be a lot more than the roughly two million folks who turn on Nightline. Plus, the Nightline crowd is largely liberal, and these viewers are not going to favor Newt Gingrich.
I’m not saying the ABC Brian Ross interview with Marianne isn’t something. But I’m not sure how important it really is.
Here’s what’s more important: Newt has opportunities in the debate tonight to push his Reagan 2.0 supply-side tax-reform plan. If he stays on message about growth, jobs, and prosperity, he can point to Mitt Romney’s more timid tax-reform plan.
Plus, Newt needs to explain how the numbers work both for his 15 percent flat tax and his plan for Social Security personal accounts. Growth is great, but we also have this problem called the budget deficit. Newt needs to explain.
Mitt Romney has opportunities tonight also. He needs to announce an early release of his tax returns. He also should explain that his investment income, which is taxed at a 15 percent effective rate, is also taxed at the corporate level. So in fact, Mitt is paying a combined 45 percent tax rate on his income.
And while he’s at it, Mitt should unveil (unleash?) his own bolder tax-reform plan. Most people agree that Mitt has the business experience and the better understanding of how the economy works. But he needs a bolder solution. Tonight could be the night.
And while he’s at it, Mitt should give a more detailed defense of both the successes and failures of Bain Capital. Details matter. And perhaps he can aggressively tell folks how a Bain-turnaround approach is exactly what’s needed for that troubled and near-bankrupt company, U.S. Government, Inc.
Finally, both Newt and Mitt should take on the cronyism in Washington. They should describe how they would end corporate welfare; how they would remove the costly and unnecessary deductions, exemptions, and carve outs in the tax code; and how they would get rid of all the government subsidies to big business for energy, exports, and agriculture (and ethanol). Changing Washington’s culture of cronyism is a key path to tax reform, deep spending cuts, and deficit reduction -- along with growth.
In other words, in a dead-heat race in South Carolina, both Newt and Mitt have big opportunities in tonight’s debate.
Wednesday, January 18, 2012
Tuesday, January 10, 2012
Republican presidential hopeful Jon Huntsman took aim at front-runner Mitt Romney on the eve of the New Hampshire primary, and told Larry Kudlow he’s the best candidate to unseat President Obama in November.
Huntsman, former governor of Utah and U.S. ambassador to China, said Romney is making himself “completely unelectable” when he makes statements like the one he made earlier Monday about firing people. During a speech to business leaders, the former Massachusetts governor said, “I like being able to fire people who provide services to me” when talking about how people should be able to chose their own health insurance.
“Words and statements matter and when you are in a heated campaign,” Huntsman said. “I just want to make sure we can get somebody who can go up against Barack Obama and not be chewed up by the political machine that’s going to have a billion dollars to spend on it.”
To take on Obama, the candidate has to be able to get more than just Republican votes, and Huntsman said he’s the man who can deliver.
“In order for someone to beat Barack Obama this year, they’re going to actually have to convince people who supported Barack Obama last time to support them,” he said. “If you can’t come out of New Hampshire or any other primary state with the Republicans and also a whole lot of independents, than we’re not going to have an electable candidate at the end of the exercise.”
Huntsman, who skipped the Iowa caucuses last week to focus on New Hampshire, is pinning his hopes on a strong showing in the Granite State's first-in-the-nation primary Tuesday. While he lags far behind Romney, some polls show him moving into third place. According to Monday's Suffolk University tracking poll, Huntsman has 13 percent of likely voters supporting him. Romney has 33 percent, down from 43 percent one week ago, and Rep. Ron Paul is at 20 percent.
Huntsman also took issue with Romney’s criticism of his service as ambassador to China under President Obama. During Saturday’s debate, Romney reprimanded Huntsman for implementing the policies of the Obama administration instead of helping Republicans across the country get elected. But Huntsman said his dedication to his former job should win him favor with voters.
“People want a leader who actually believes in putting their country first,” Huntsman told Kudlow. “And Governor Romney made it very clear yesterday that he believes in putting politics first.”
He also disagrees with Romney's stance on penalizing China for currency manipulation.
“If he imposes a tariff the first day he’s in office, as he has threatened to do, you will have retaliation immediately on the part of the Chinese and it will result in a trade war,” he said. “That is an absolutely nonsensical approach to doing business.”
While the Chinese aren’t appreciating their currency at a speed he’d like, he said the solutions need to be found during negotiations.
But he wouldn't join in the chorus of Republican candidates attacking Romney for his work as a venture capitalist. Instead, he thinks the front-runner’s record as governor is the bigger issue.
“They placed 47th in job growth in this country,” Huntsman said. “He didn’t put forward any big bold tax cut proposals, he didn’t put forward any tax cut offerings to his legislator, he didn’t do anything big, bold and courageous.”
Utah, on the other hand, was number one in job growth, delivered a flat tax, and reformed health care and education during his tenure, Huntsman said.
"What's most germane here is our records as governor," he said.
Friday, January 06, 2012
A new video from Scott Hodge, president of the Tax Foundation, shows how our current "worldwide" tax system of taxing foreign profits is a toll charge for investing cash back in the U.S. and why moving to a "territorial" tax system will boost U.S. competitiveness, jobs, and domestic investment.
Blue-Collar Workers, Santorum, Kudlow
By Tim Carney, The Washington Examiner Senior Political Columnist
January 5, 2012
Tonight on CNBC, host Larry Kudlow had some forceful objections to my column today on Rick Santorum's popullsm, and the resistance that meets in Republican and conservative circles.
My column quoted Kudlow calling Santorum's economic plan "terrible," because it favors manufacturers by lowering their corporate income tax rate to 0%, while not doing the same for non-manufacturers. Kudlow says I accused him in the column of being anti-blue-collar. I certainly wrote that many Republicans are, but I don't agree that my column leveled this accusation specifically at Kudlow.
In fact, Kudlow wrote a column recently which sticks up for blue-collar workers.
He wrote: The Keystone opposition coming out of the White House is completely alienating all these people, the folks who work with their hands. And it’s these workers who have been decimated in the recession far more than any other group in the economy.
Kudlow and I have our disagreements about bailouts and taxes (and the meaning of my latest column), but on these points, we agree: (1) Santorum is wrong to pick winners & losers, and (2) many economy-distorting policies need to be fixed, but the policies that hurt blue-collar workers impose unique costs.
Thursday, January 05, 2012
A day after coming in third in the Iowa Republican presidential caucuses, Rep. Ron Paul (R-Texas) set his sights on New Hampshire and took aim at Rick Santorum. He also declared he had no intention of leaving the Republican party.
Santorum is a typical “big government Republican” who is not really conservative, Paul told Larry Kudlow Wednesday.
Paul said he’s the true fiscal conservative, who believes in free market economics—a concept that both Santorum and Newt Gingrich don’t understand.
“I think they think in terms of patching up things, and maintaining the status quo, and don’t rock the boat and you can’t cut anything,” Paul said.
However, former Massachusetts governor Mitt Romney deserved a “little bit of credit” for working in the private sector, he said.
Santorum, a former U.S. senator, finished just eight points behind Romney during Iowa’s caucuses Tuesday. The presidential battle has now shifted to New Hampshire, which hosts the first in the nation primary next week.
The congressman from Texas, who did well among independents and younger voters during Tuesday’s caucuses, told Kudlow he’s candidate who can bring those votes to the GOP. He also slammed those who tried to vilify his supporters throughout the campaign.
“I thought the party was a broad tent, a big tent, [that] brings people in … but aren’t young people pretty important?” Paul said. “I get real energized when I go to the campuses and talk about economic policy and talk about gold standards and things like this, but they don’t want to invite these people in.”
But while his libertarian views may have brought in independent voters, Paul dismissed the idea of running of an independent.
“Right now I’m doing so well, why would I think about it?” he said. “I was raised in a Republican family. I was elected twelve times to Congress as a Republican.”