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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

A Cheaper Shakedown

Even as Republicans try to blame today’s House defeat of the financial bailout legislation on Democrats, some conservatives are coming forward with suggestions on how the requisite 12 House Republicans might be induced to flip their votes.
Predictably, the first with his hand out is K Street Strategy maestro Grover Norquist, whose Americans for Tax Reform opposed the bill. Grover’s prescription is less than modest:
–allowing companies to repatriate foreign earnings to the U.S. tax-free if the money were used to purchase distressed assets in 2008 and 2009
–creating a capital gains tax holiday for 2008 and 2009; short of this, the capital gains tax rate for corporations could be temporarily cut to the individual rate of 15 percent (down from 35 percent today) in order to encourage corporations to sell assets and purchase distressed assets
–providing that current income and capital gains resulting from the purchase of distressed assets would be permanently free of taxation
–lowering the corporate income tax rate from 35 percent to 25 percent in 2008 and 2009 for companies that agree to purchase some significant amount of distressed assets
In other words, Grover wants to take every bad and regressive conservative taxation idea of the last couple of decades and apply it to corporations buying “distressed assets,” along with a two-year elimination of, or radical reduction of, capital gains taxation for corporations generally.
I don’t have the wherewithal to cost out these pithy suggestions, but the corporate capital gains tax “holiday” alone is bound to be quite expensive, not to mention more than a bit unjust.
Seems to me if we’re talking about buying twelve Republican votes, it would be a lot cheaper to just give them, say, a billion dollars each in one-year appropriations earmarks. Perhaps the great patriot and earmark specialist John McCain could broker the deals.

2 comments on “A Cheaper Shakedown

  1. aml on

    the ‘no’ voting dems need to take a strong line – if we’re going to own this plan then we’ll do a democratic plan that’s worth owning. this includes the list we’ve all seen already: equity, pay controls for execs, bankruptcy overhaul, infrastructure investment, income supports, and aid to states. to hell with the republicans.

    Reply
  2. Kuyper on

    Why should the Democrats do anything at all? The DJ just dropped nearly 800 points in a single day. Why not just wait until it drops another 1000 points and then watch the torch-and-pitchfork brigade turn on the House Republicans?

    Reply

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