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5/9/2008
Mark Rahmlow: Where's the recession Steve?
U.S. Rep. Steve Kagen, D-Appleton, used his incumbency last week to announce “our tax dollars are going right where they belong – in our pockets”.
Last winter, the Federal Reserve urged Congress and President Bush to enact a short-term tax relief bill to promote consumer spending. For this columnist’s family, the rebate will amount to $1,500. Kagen joined Wisconsin’s entire congressional delegation – minus Jim Sensenbrenner – in voting for the rebates. Now the novice lawmaker is hoping to cash in his vote for the Economic Stimulus Act for another term.
But Kagen’s sunny disposition on the tax relief neither matches his overall record on taxes, nor his repeated assertions that the economy is in the dumps. Kagen vowed to “address the root causes of our nation’s economic recession” in a January press release. Weeks later the representative merely said the country faced “economic troubles”. In other forums, he told reporters the country was getting closer to a recession.
Recessions are marked by two consecutive quarters of negative growth. Well, the doctor and some economists have some explaining to do given the economic performance of the first quarter. Kagen expected a decline. Instead the economy just grew at 0.6%. Consumer spending also left pundits scratching their heads by increasing by 0.4%. All of this happened even before the federal stimulus checks reached voters.
The rebates will certainly be a welcomed supplement income to families in Northeast Wisconsin. Anything that keeps money in the private sector is preferable to a government-sponsored “investment”. But it’s the 2003 tax relief that continues to deliver economic gains. “People are having a tough time keeping their heads above water, and this rebate money will give folks a lift,” Kagen said this week.
But before voters think Kagen has suddenly had a change of heart on tax cuts, his two-year record on taxes needs to be examined. “Congressman Kagen has voted with the National Taxpayers Union just 7 percent of the time,” John Gard said in April. Indeed, Kagen’s record on taxes is troubling. He’s voted with liberal Democrats to repeal most of the 2003 tax relief including the $1,000 child tax credit. If the Kagen-supported budget were to be enacted, $683 billion would be taken out of the private sector.
“All told, it’s estimated that Steve Kagen’s vote would lead to a tax increase of $1,667 for the typical taxpayer in the 8th Congressional district,” Gard continued. So this columnist might be getting $1,500 in stimulus only to watch $1,667 return to the federal government.
Kagen has given Gard an advantage on taxes. Gard is able to face voters and say, “I’ll vote like you”. When Kagen boasts of raising the minimum wage, Gard can say he’ll vote to keep the child tax credit and eliminate the marriage and death penalty taxes for good. When Kagen talks about PAYGO, Gard’s team can highlight support for a Balanced Budget Amendment and Line Item Veto.
In two years Kagen has managed to approve a budget request that exceeds the President’s. And Kagen managed to support $680 billion in higher taxes. By voting with his colleagues to enact that agenda, Northeast Wisconsin will be sending Kagen back to the allergy clinic this fall. The economy needs the 2003 tax cuts made permanent.
Kagen’s correct that tax dollars “belong – in our pockets”. Except it’s Gard that will win with that message.
Rahmlow is a former field director for Michels for Senate and briefly served as the Campaign Manager for McCormick for Congress in 2006.
COMMENTS
Wow, Kagen and the do nothing Democrats have so much power! I guess I'll have to vote for them next time.
dave allen (Fri May 09 20:17:28 2008)
“….nor his repeated assertions that the economy is in the dumps.”
Well, duh, isn’t it? I don’t follow the technical definition of a recession, but I know one when I see one. In my view we are in one and it likely will get worse before it gets better (if ever).
So we had a tax break for the wealthy in 2003, and it drove our $300 billion surplus into a $600 billion deficit. Woops! Guess we better now have a tax break for the little guy. Woops again. So much has gone wrong since then that it’ll have little or no effect.
I’m not a Kagen supporter and am behind McCain. But nothing is going to get fixed in the US until we get our jobs back, and that’s going to take major changes. Starting first by putting McCain in and giving the Dems a filibuster-proof senate. McCain’s biggest contribution will be getting major campaign reform, which Gard opposes.
Oh, I know. Maybe we need another tax break for the wealthy.... :-)
Jack Lohman (Mon May 12 07:37:16 2008)
Jack: Over 10 million jobs have been created since 2001. Unemployment has been in the 4.4 to 5.5 range for years which is considered full employment. Just reported recently, 20% of business firms throughout the country are having a tough time finding trained and qualified workers. Nursing, health industry, sales, any high tech, etc., and more keep looking. Consumer spending increased last month. How mmany straight quarters now of economic growth? Yes, Bush inherited a(on paper only) high surplus provided mostly by a Republican Congress under Clinton. Nothing much to do with Clinton. But, unfortunately Bush also inherited a recession from Clinton, immediately ran into 9-11 and then Katrina. All serious blows to the economy. But yet his tax cuts brought back a great economy that included the a 47% growth in tax revenues from Corporations. If 5% of the tax payers are paying 96% of all taxes, how can we say that the fich get all the breaks. 150 million, under $30-40,000 incomes pay no taxes at all. But the rich get all the tax breaks? Get with it!! This so-called recession is strictly media induced. All we have heard for over two years on a daily basis from the left media and Dems is "the recession is coming...the recession is here" All political.
John Hyland (Mon May 12 08:18:09 2008)
I'm glad that some liberals are reading this blog. Mark points out that democrats have endorsed an economic stimulation package recognizing that less tax results in a stimulation of the economy. The people who start businesses and invest in new ones are those who pay lots of taxes. Why not give them the ability to spend more of their money buying things and employing people. It's good for everyone including liberals. Perhaps only people who are analytical get the reality that people who pay more taxes should get more rebates. The Democrats plans to not explore for oil, not use coal, and not use nuclear power is a “lose-lose” proposition. What happens when the wind doesn’t blow, the sky is cloudy and the brownouts won’t let you charge your electric auto?
Lee Murray (Mon May 12 08:25:45 2008)
So, John, I’ve got it all wrong. Our economy is not in the tank? Gas and food prices and health care costs are not eating into household budgets. The 250,000 jobs lost since the beginning of the year are a fake? Highly skilled programmers are flipping burgers because our corporations can’t find qualified US workers, and they are seeking more visas to fill the jobs the programmers won’t take. It’s starting to sound like Americans simply don’t want to work, whether it’s programming or agriculture or meat packing. We are obviously in deep trouble as a nation.
Nursing? The for-profit hospitals have cut their nurse-to-patient ratios so much they are driving nurses out of the business. All to increase their profits further. I know; I owned an independent medical lab and I was hiring them away from the hospitals, often at lower wages. But Heaven forbid, let’s not fix the health care system.
No, we can’t blame 9-11 on Bush, but had he appointed someone other than his crony “Brownie,” perhaps Katrina would have gone a lot better.
I don’t have time to research your funny numbers, John, but Taxpayers for Common Sense would likely have big challenges. Like, many big corporations pay no taxes at all.
No, lighten up folks. Things are looking great for the future. The glass is half full, not half empty.
Jack Lohman (Mon May 12 09:03:24 2008)
“Consumer spending increased last month.”
And of course, John. Just look at where the increased spending went: Health care, gas and food prices, transportation, and, well, I think you get the picture. Try as I might, I can’t put a pretty face on this.
Jack Lohman (Mon May 12 09:31:23 2008)
You've been watching and listening to too much liberal rhetoric. I told you the joc openings are in certain areas that need training and education. Parents and the education systems afre failing us badly. Over 1 million high school drop-outs every year. 70% just in Detroit alone and near 50% in most every large city. They can't read, write or make change. Many have rings sticking out of ears, tongues, noses. Would you hire some one like that. 3% out there are not capable of holding or getting a job---not even a burger flipping job. We have to get our educations system out of the NEA hands and get back to teaching without the political correctness. The unions forced the auto makers out of Michigan with $70 an hour package. Same as they did in LaCrosse years ago with Auto-light- their largest employer. Quit listening to the Major networks and quit reading newspapers and magazines. Nearly 100% liberal. We may have reached the point of no return already.
John Hyland (Mon May 12 12:13:19 2008)
John, I'll give you that parents and schools have failed us miserably, and the NEA is much to blame. The lefties have fought off efforts to regulate dress and appearance and achievement in the schools, but the right has done nothing to help fix the problem. Oh, except for the unfunded No Child Left Behind act (which was indeed an "act.")
But that fits in with our "free market" philosophy; let them do what they want to do.
I favor either a high school diploma with good grades, or 2 years mandatory service in the Army. Too harsh? I don’t think so. Give them a choice that matters.
And yes, the unions are partly to blame: $70 an hour packages have helped to force companies out of the country. We are building more cars in Canada not because of wages but because of exorbitant health care costs in the US -- and the righties have done everything in their power to keep the system broken. $6500 per employee per year for US healthcare versus $800 per year in Canada. What do you expect?
And yes, union employees make too much money, damn them. They should give some of it back so companies can afford their yearly CEO raises of 25%. $10 million packages, and growing, are not sufficient. And the tax breaks for the wealthy simply weren’t enough. These obviously work so well, can you imagine the growth of the economy if we just gave them more? Then they (instead of the working class) could invest to make even more money!!!!
I think both the left and the right have gone too far to pad their own pockets, but I blame the wealthy for being more successful at it. What are they going to do with all of their riches when there is no longer a middle class to buy their foreign-made products?
Jack Lohman (Mon May 12 13:05:29 2008)
Jack: If the top end don't get money, they don't create jobs. And besides, near 50% of these exhorbitant salaries come back as taxes. You still don't understand that 50% at the top pay the taxes for the bottom 50%. But the rich get all the breaks!! If that makes sense to you. Good Luck!
John Hyland (Mon May 12 13:46:22 2008)
John, if what you say is true we ought not to tax the top end at all. Let them be jobs-makers and the poor slobs at the bottom can pay the bills. If we hadn't given all of the govt assets away in 2003 we wouldn't have the problems we have today.
Yes, the rich pay more taxes than the poor, but after all of their write-offs they still are at 15% of income. Just like the rest of us. Ask Warren Buffet.
Sorry, John, I think that's all right-wing blather. You've been listening to Grover too much. We'll not agree on this one.
Jack Lohman (Mon May 12 17:11:51 2008)
And John, this whole conservative philosophy seems like "I'm wealthy, so give me more money and after I buy more expensive homes and yachts, I'll trickle some of it back down to you." Some truth to that might have occurred decades ago, but today the wealthy are moving this money to foreign jobs instead. I'd rather we start building some wealth in the middle and lower levels. Our country will be better for it.
Jack Lohman (Tue May 13 02:33:25 2008)
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