Tag Archives: supply side economics

“But I’m not that kind of Republican”

Every time I talk with a Vermont Republican (which is happening more frequently now, by design), I hear a variation on the same tune: “I’m not that kind of Republican.” Meaning, I’m not like those extreme conservatives on the national level; I’m a moderate, Vermont kind of partisan.

Well, maybe, but what do they mean by that?

It seems to be roughly this: they don’t share national Republicans’ extreme views on social issues, which is a no-brainer; espousing the creeds of the Christian Right is a sure loser in Vermont. They don’t deserve much credit for tolerance on reproductive rights or marriage equality.

Things get fuzzier when it comes to fiscal issues.

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Lost in the weeds

Sue Minter seems to be spending a lot of time lately trying to out-ethics Phil Scott. After he announced he would sell his stake in Dubois Construction if elected governor, she continued to pound on potential conflicts of interest. Now, she’s returning campaign donations from a lawyer connected to the scandal-plagued EB-5 developments ni the Northeast Kingdom.

Maybe it’s just me, but I think this is a waste of time and unlikely to resonate with voters. It’s the kind of stuff that political insiders (and us outsiders who obsess about politics) care about, but I seriously question whether the voters do.

Besides which, trying to blacken Scott’s reputation is a mug’s game. He’s such a familiar figure with such a positive image; you’re not likely to change people’s minds unless there’s an October Surprise lurking in Scott’s closet.

Better, in my mind, to focus on the issues, where Scott is weakest.

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Phil Scott Makes Tax Cut Plan Somewhat Less Awful

It hasn’t been that long since Phil Scott unveiled his glossy 39-page economic plan, but he’s already acknowledging one major mistake.

As the Vermont Press Bureau’s Neal Goswami reported over the weekend, Scott’s plan to cut capital gains taxes was based on Vermont’s old tax formula. As a result, the Scott campaign has watered down its cap-gains proposal.

Details in a moment. But first, let’s just put this out there:

[Cutting the capital gains tax] would spur tax shelters, generate little new saving, give a windfall to the wealthy, and make long-term budget problems even worse.

That’s from the commie-pinkos at the Brookings Institution. There’s plenty where that came from; the consensus among experts (not employed by the Cato Institute and other right-wing policy shops) is that capital gains tax cuts are, at best, a grossly inefficient way to spur economic growth. At worst, they’re a pointless squandering of resources.

But let’s return to Phil Scott’s plan, before and after. This will get into the weeds of tax policy, so my apologies in advance. I’ll try to keep things simple.

Vermont used to allow taxpayers to exclude 40 percent of their capital gains. That was killed in 2009, in favor of an exclusion for the first $2,500 in capital gains. The change was designed to concentrate the tax benefits at lower income levels; whether you got $2,500 in capital gains or $2,500,000, you got the same tax break.

Scott’s original plan would have restored the 40 percent exclusion.

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Win Smith’s 47% Moment

What’s this in my inbox? Why, it’s a heart-rending tale from the desk of Win Smith, co-owner of the Sugarbush ski resort and president of the Vermont Business Roundtable. And former Merrill Lynch executive. And reportedly a member of a secret Wall Street society described as “‘”a sort of one-percenter’s Friars Club’ whose annual dinners are filled with elitist, sexist and homophobic humor.”

(Bruce Lisman’s also a member, but I digress.)

Smith’s business partner in Sugarbush is, of course, State Rep. Adam Greshin, who wrote and lobbied for an amendment that forestalls a significant increase in Sugarbush’s sizable utility bills. And was, dubiously and privately, cleared by the House Ethics Panel.

Smith’s essay is being distributed to Vermont news outlets; I’m sure it will shortly be cluttering up your local paper’s content-hungry Op-Ed page. It’s a pretty amazing piece of work, managing to be both politically and literarily obnoxious. It’s a subtle retelling of stale conservative myths about poverty and government. You know the stuff: welfare mothers with Cadillacs, poor folks lulled into dependency by public-sector largesse, and the myth that “47% of Americans pay no taxes” and therefore have no stake in responsible government.

Smith begins with the sad story of “a childhood friend of mine” whose mother expressed her love by serving “large portions of tasty food.”

Unfortunately, Mom’s generosity had deadly results.

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Nobody’s figured out how to make this economy work

Vermont Republicans are fond of slamming the Shumlin Economy, cherrypicking statistics that make the Governor’s record look bad. They criticize his policies as crippling to economic growth and middle-class prosperity. (And now that Bernie Sanders is running for President, they try to blame all the ills of the last three decades on him, even though he hasn’t been running the place and would clearly have adopted very different policies if he had been. Protip to Republicans: correlation is not causation.)

And yes, in spite of very low unemployment, it’s inarguable that the recovery has been slow and spotty for most Vermonters. Their purchasing power has remained stagnant. But this isn’t just a Vermont phenomenon, and if you look at other states with conservative governments, they’re failing at least as badly as we are.

Last Friday, Talking Points Memo posted a piece about how four Republican governors are seeing their presidential aspirations undercut by severe budget problems back home — problems attributable to the failure of their policies to hotwire their economies.

The basic concept is as cartoonish as when it was first sketched on a napkin by Arthur Laffer: cut taxes and the economy will flourish. Revenues will rise, as government takes a smaller slice of a growing pie. Business, freed of its public-sector shackles, will lead us into a prosperous future.

Trouble is, it doesn’t work. In Louisiana, WIsconsin, Ohio and New Jersey, Republican tax-cutting policies have failed: all four states have sluggish economies and huge budget shortfalls. It’s worse on both sides than anything Peter Shumlin has inflicted on the state of Vermont.

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