I can see why those who believe they will never succeed on their own and want to punish those who do would back this ticket. I also love how Kerry paints his ticket as backing those 'struggling to get by'.
Taxes and torts: That's the ticket
John Kerry's choice of John Edwards as his running mate sets in motion a classic assault on the free market principles that have made the American economy the most prosperous of any industrialized nation over the past 25 years.
Edwards may be an attractive personality and an effective communicator, but on policy substance — torts, trade and taxes — he's resoundingly anti-growth and prosperity (just like Kerry).
In a January primary speech, Edwards said, “There are two Americas — one for the powerful insiders, and another for everyone else. … One America that is struggling to get by, another America that can buy anything it wants — even a Congress and a president.”
Or a political party. After all, with Edwards on the ticket, the takeover of the Democratic Party by the Association of Trial Lawyers of America is now complete.
Through aggressive venue shopping, tort lawyers like Edwards bring national cases to favored local courts and squeeze out ridiculous settlements, making millions for their firms and frequently providing little or nothing to consumers.
In a settlement of a class action suit filed in Texas against the Blockbuster movie rental company, plaintiff lawyers received $9.25 million, while each class-action member received two coupons for movie rentals and one $1 off coupon. The case was about late movie return charges. The lawyers made enough money to produce their own movie, but Blockbuster customers couldn't even use their coupons to buy a bag of popcorn. Their coupons were for nonfood items.
Edwards is also a devout protectionist. During the Iowa primary debate last January, he proclaimed: “I didn't vote for NAFTA. I campaigned against NAFTA.”
Both Edwards and Kerry are more than happy to buck the world tide and go it alone on trade — even though steep tariffs will hurt ordinary Americans who shop for low-cost imports at the giant chain stores. By protecting a handful of unionized and inefficient companies, trade protectionism undermines the living standards of the nearly 135 million Americans who shop at Wal-Mart, Kmart, Costco, Target, Home Depot and Best Buy.
On taxes, Edwards is a strong class warrior. Criticizing President Bush during the primaries, he said, “By the time he's done, the only people who pay taxes in America will be the millions of middle class and poor Americans who do all the work.”
Here, the North Carolinian runs into some factual problems. The top 1 percent of taxpayers pay more than one-third of income tax collections. The top 10 percent pay two-thirds. The bottom 50 percent pay only 4 percent of income taxes. And those making less than $30,000 a year essentially pay no income taxes.
Of course, Edwards' sort of thinking argues that successful earners and investors are never entitled to reap the fruits of their labor. But higher tax rates on success blunt incentives for the nonrich who are working hard to climb the American ladder of prosperity. Study after study shows that the middle class is shrinking — not because more are becoming poor, but because more are getting richer.
Repealing tax cuts on investment would also do great damage to economic recovery. The Kerry-Edwards tax-the-rich proposals would in effect prevent the investment seed corn from reinvigorating the very businesses that create jobs in the first place. The so-called rich won't suffer. Instead, the middle class will face a higher tollgate barrier as they try to move up the ladder.
The Kerry-Edwards vision will do enormous damage to the welfare of consumers and businesses. Opposing tort reform, raising taxes, erecting new trade barriers and confiscating the rewards for personal effort and investment is a prescription for economic demoralization — not growth.
A big question remains, however. Will George Bush and Dick Cheney be successful in making this case?
Larry Kudlow is co-host of CNBC's “Kudlow & Cramer.”
The latest budget numbers show a $19.1 billion surplus for June, $3 billion higher than the $16 billion Wall Street expectation. It seems that a flood of new tax collections, spurred by fatter employment payrolls and corporate profits, is rapidly reducing the federal budget gap. Tax receipts from businesses rose an astonishing 38 percent over the past twelve months and personal income-tax collections increased almost 9 percent. What’s happening? Could it be that stronger economic growth from lower tax rates is producing more tax receipts? I believe it’s called supply-side economics.
Economic forecasting firm Global Insight forecasts the election: Bush will win with 56%. It's model is based on per capita after-tax income, unemployment, incumbency and party affiliation. Unemployment, 5.6% now, would have to hit 7 % and income growth would have to plummet for Kerry to triumph, the firm says.