FREDO & PAULSON: STUCK ON STUPID

Both are still mired in voodoo economics:


[Sec. of the Treasury] Paulson said making permanent the tax reductions Bush implemented in 2001 and 2003 would ``provide great relief'' to investors. SOURCE: Bloomberg

Pres. Fredo, 1/7/2008:

I had a New Year's resolution, and it was to make sure that Congress keeps the taxes low and to make sure that when we spend your money, we do it wisely or not at all. And it's a resolution I intend to keep. (Applause.)

But most importantly the smartest thing we can do is to keep taxes low. In a time of economic uncertainty, we don't need to be taking money out of your pocket. In a time of economic uncertainty, we ought to be sending a clear signal that taxes will remain low. Now, I've worked with Congress to cut taxes, and pro-growth economic policies work. When you cut taxes, it means that people have more money to save, spend or invest; more money in your pocket; more money where you can do -- you can support your family; or if you're a small business owner, you can reinvest to create more job opportunity in the community in which you live.

It turns out tax cuts have helped our economy overcome uncertainties.

In times of uncertainty it's very important to make sure that the people on the front lines of job growth -- that would be the entrepreneur -- knows taxes are going to remain low. And so one of the first basic principles that I'll be talking to Congress about is this administration will use its authorities to keep taxes low.

I don't think there are many folks who believe that Washington really needs more of your money -- I certainly don't. Unfortunately, Americans could be facing higher taxes unless Congress takes action to stop it. You see, in less than three years, the tax cuts that we passed are set to expire. That creates uncertainty. If you're an entrepreneur thinking about investing, and all of a sudden you're looking at a horizon where you taxes may be going up, it creates uncertainty. We don't need more uncertainty in an uncertain market. If Congress allows this to happen we'll see an end to the measures that have helped our economy grow, including the 10 percent individual income tax bracket, the reductions in the marriage tax penalty, and reduced rates on regular income, capital gains, and dividends.

And one of the interesting things that happens if taxes go up -- people say, well, we're just going to tax the rich. The problem is, many small businesses pay taxes at the individual income tax rate because they're Subchapter-Ss, or limited partnerships. We don't need to be running up taxes on small business owners. After all, 70 percent of new jobs are created by small businesses in America. Increasing the tax burden on small businesses will make it less likely people will be willing to create new jobs.

And so I will strongly urge that the Congress keep taxes low. One way to do it is to make sure that all the tax cuts we passed are made permanent. If you're interested in taking uncertainty -- (applause.) One of the other taxes that's going to return will be the death tax, which is being phased out, and in 2011 it kicks back in, which means it's going to be hard on estate planning, let me put it to you that way. I hope a lot of people don't decide to move on just because of the tax cut. (Laughter.) I'm absolutely convinced we can do a better job of having the estate tax put on the road to extinction and then let it pop back up. It makes no sense.

Listen, the estate tax is a lousy deal, particularly for farmers and small business owners. I mean, you get taxed twice: You get taxed when you build your business, and then they tax you when you die. I'm absolutely convinced that there is a deal to be done, and get rid of the estate tax once and for all, for the sake of economic vitality and growth and fairness.