Throw Out Incompetent Jeff Flake
Jeff Flake wrote a letter to the President which he summarizes on his House web site.
Mesa, Arizona, Oct 28 – Republican Congressman Jeff Flake, who represents Arizona’s Sixth District, today sent a letter to President Bush regarding reports that the Treasury Department may use funds from the bank bailout to assist struggling automotive companies.
News reports have also indicated that General Motors and Chrysler would use bailout funds to complete a merger, with the federal government receiving an equity stake in the new company.
“Many of us feared that the nationalization of the financial sector would spread to other industries,” said Flake. “Today it’s the automakers asking for a bailout; tomorrow we can expect the airline industry and other struggling industries to be next in line.”
“If liquidity is the issue, measures such as cutting the corporate tax rate, suspending the tax on capital gains, and removing penalties for the repatriation of foreign assets are far better options than putting the federal government in the position of choosing winners and losers in the economy.”
First, let me say that I agree that government money should not be poured into failing companies. That’s where our agreement ends though. I am not familiar with the foreign asset repatriation penalties, I will instead focus on the other points.
“If liquidity is the issue, measures such as cutting the corporate tax rate, suspending the tax on capital gains,
Why is it that the answer to everything for Republicans is to cut taxes and reduce government oversight? If a corporation is losing money they are not paying taxes. Period. The tax rate on -$1million is $0. The government doesn’t send corporations a check if they don’t make any money this year. Corporations don’t get the “earned income credit” or the “per child tax credit”. Instead, they get to apply those losses to future earnings.
Suspending the tax rate of capital gains? That only makes Warren Buffet rich. Correction, Warren Buffet doesn’t sell things – he buys them to hold them. A suspension of the capital gains rate will set the stock market up to go to zero. Anyone holding onto gains for because they didn’t want the tax consequence will dump their remaining stocks and bonds. And they will do it now out of fear that the market is going lower and the prospect that the suspension is temporary. It will start a selling spree that would not be limited to the stock market, homes could start hitting the selling block driving prices down even further. Additionally, the middle class will again get the shaft on their 401(k), Traditional IRA and other tax deferred retirement plans. The lower capital gains rate doesn’t apply to capital gains held in your retirement plan – instead you pay the highest rate, just like you would if you were still working.
At first glance, this appears to be complete and utter disregard for the middle class (anyone who makes less than $5 million/yr according to McCain) perhaps, I should heed Hanlon’s Razor, “Never attribute to malice that which can be adequately explained by stupidity.” Jeff, you are either an idiot or else you think we are, or you are maliciously attempting to cut the life out of the middle class. Jeff, if it weren’t for the middle class you would have to pay more taxes and clean your own toilet.
