In GOP response, Daniels blames Obama for economy (AP)

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WASHINGTON ? President Barack Obama has resorted to “extremism” with stifling, anti-growth policies and sought to divide Americans, not unite them, Indiana Gov. Mitch Daniels said Tuesday in the formal Republican response to the president’s State of the Union address.

Eight months after deciding against a bid for his party’s presidential nomination, Daniels used his nationally televised speech to lash out at Obama and cast the GOP as compassionate and eager to unchain the country’s economic potential.

He took particular aim at Obama’s efforts to raise taxes on the rich and castigate them for not contributing their fair share to the nation’s burdens. Joined by Republicans on Capitol Hill and the presidential campaign trails, the GOP goal was to both blunt and shift the focus away from Obama’s theme on Tuesday of fairness, which included protecting the middle class and making sure the rich pay an equitable share of taxes.

“No feature of the Obama presidency has been sadder than its constant effort to divide us, to curry favor with some Americans by castigating others,” Daniels said, speaking from Indianapolis. “As in previous moments of national danger, we Americans are all in the same boat.”

“This election is going to be a referendum on the president’s economic policies,” which have worsened the economy, said House Speaker John Boehner, R-Ohio. “The politics of envy, the politics of dividing our country is not what America is all about.”

Also drawing frequent GOP attacks were Obama’s proposed tax increases, which included making sure millionaire earners pay at least a 30 percent tax rate.

House Ways and Means Committee Chairman Dave Camp, R-Mich., said Obama’s proposals to boost taxes on the wealthy and give tax breaks for domestic U.S. manufacturers and others were “nothing more than the usual Washington game that has led to a tax code already littered with lobbyist loopholes.”

Daniels is a rarity in the GOP these days ? a uniting and widely respected figure, contrasting with the divisiveness emanating from the contest for the presidential nomination being waged among former Massachusetts Gov. Mitt Romney, former House Speaker Newt Gingrich and others.

President George W. Bush’s first budget chief and a two-term Indiana governor, Daniels often rails against wasteful spending big budget deficits, though critics note he served during the abrupt shift from fleeting federal surpluses to massive deficits early in Bush’s term.

“When President Obama claims that the state of our union is anything but grave, he must know in his heart that this is not true,” Daniels said. He added that while Obama did not cause the country’s economic and budget problems, “He was elected on a promise to fix them, and he cannot claim that the last three years have made things anything but worse.”

The night’s rhetoric come at the dawn of a presidential and congressional election year in which the defining issues are the faltering economy and weak job market and the parties’ clashing prescriptions for restoring both. Obama and congressional Democrats have focused on the more populist pathway of financing federal initiatives by taxing millionaires, while Republicans preach the virtues of less regulation and smaller government.

Senate Minority Leader Mitch McConnell, R-Ky., called Obama’s address “a campaign speech designed to please his liberal base,” and warned that he should keep legislation advancing his priorities “free from poison pills like tax hikes on job creators.”

Rep. Jim Jordan, R-Ohio, who heads large group of House conservatives, said Obama’s speech was riddled with “the ridiculous idea that America isn’t fair because successful people get to keep too much of the money they earn.”

Republicans fired back at Obama’s vision of “an economy built to last,” saying it was their party that understood the best way to trigger economic growth was to get the government out of the way.

“The extremism that stifles the development of homegrown energy, or cancels a perfectly sane pipeline that would employ tens of thousands, or jacks up consumer utility bills for no improvement in either human health or world temperature, is a pro-poverty policy,” Daniels said.

Obama has halted, for now, work on the proposed Keystone XL oil pipeline from western Canada to Texas’ Gulf Coast. Republicans say the project would create thousands of jobs, a claim opponents say is overstated. The administration has also pursued policies aimed at reducing pollution and global warming.

To underscore Obama’s decision on Keystone, Boehner invited three officials from companies he said would be hurt by the pipeline’s rejection to watch the speech in the House chamber, along with a pro-pipeline legislator from Nebraska, through which the project would pass.

Obama was delivering his address during a rowdy battle for the GOP presidential nomination that has ended up providing ammunition for Obama’s theme of fairness.

That fight has called attention to the wealth of one of the top contenders, Romney, and the low ? but legal ? effective federal income tax rate of around 15 percent that the multimillionaire has paid in the past two years. Romney, in Florida campaigning for that state’s Jan. 31 primary, released his tax documents for the two-year period on Tuesday.

“The president’s agenda sounds less like `built to last’ and more like doomed to fail,” Romney said in Tampa, Fla. “What he’s proposing is more of the same: more taxes, more spending, and more regulation.”

Romney’s chief rival at this point, Gingrich, said in a written statement that the top question about Obama’s speech was whether he “will show a willingness to put aside the extremist ideology of the far left and call for a new set of policies that could lead to dramatic private sector job creation and economic growth.”

Source: http://us.rd.yahoo.com/dailynews/rss/gop/*http%3A//news.yahoo.com/s/ap/20120125/ap_on_go_pr_wh/us_state_of_union_gop_reaction

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Republican hopefuls take fight to Florida (Reuters)

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COLUMBIA, South Carolina (Reuters) ? After a bruising clash in South Carolina, Republican presidential frontrunners Mitt Romney and Newt Gingrich will take their battle to a bigger stage when the campaign moves to Florida on Sunday.

Gingrich, a former U.S. House of Representatives speaker, thrashed Romney in the South Carolina primary on Saturday, suggesting the race for their party’s nomination and the right to face President Barack Obama in November may last months more.

The largest of the early voting states by far, Florida presents logistical and financial challenges that appear to give an advantage to Romney’s well funded campaign machine.

But Gingrich has momentum after coming from behind in South Carolina to win around 40 percent of the vote, followed by Romney with 28 percent. Rick Santorum, a former U.S. senator, was in third with 17 percent and U.S. congressman Ron Paul in fourth with 13 percent.

“We proved here in South Carolina that people … with the right ideas beats big money,” Gingrich told supporters after his victory in the conservative state.

After strong performances in a series of debates, Gingrich was seen by South Carolina voters as the most likely Republican to beat Obama, a Democrat, in the November 6 election.

They also rejected millionaire former businessman Romney’s pitch that he is the best bet to fix a broken U.S. economy and win the White House.

Romney and Gingrich, who have attacked each other mercilessly in a series of negative television ads since December, face off in a debate in Tampa, Florida, on Monday night.

ROMNEY TAX SOLUTION?

Romney has stumbled over questions about his personal finances in recent debates and acknowledged last week that he only pays a 15 percent tax rate, much lower than that of most working Americans.

The former Massachusetts governor has so far resisted calls from rivals, and even ally New Jersey Governor Chris Christie, to release his tax returns.

To try to put the tax return controversy behind him, the Romney campaign has a plan to settle the issue next week, a Republican official said.

That is part of a strategy to be more aggressive against Gingrich, a formidable debater who nevertheless has personal and professional baggage that the Romney team could exploit. Romney accuses Gingrich of being a Washington insider.

“The choice within our party has also come into stark focus. President Obama has no experience running a business and no experience running a state. Our party can’t be lead to victory by someone who also has never run a business and never run a state,” Romney said on Saturday.

Romney saw his aura of inevitability erode in South Carolina after leading opinion polls by 10 percentage points a week ago.

In Florida, he leads Gingrich by 40.5 percent to 22 percent, according to a poll of polls by RealClearPolitics.com. Santorum, a social conservative who is from Pennsylvania, is third with 15 percent.

Campaigns must spend at least $1 million each week to reach voters in the sprawling southern state, according to local political officials. Romney’s allies have already spent $5 million, mostly on ads attacking Gingrich. No other candidate has a significant presence in the state.

(Editing by Paul Simao)

Source: http://us.rd.yahoo.com/dailynews/rss/obama/*http%3A//news.yahoo.com/s/nm/20120122/ts_nm/us_usa_campaign

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The lousy politics of the payroll tax cut

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Some moderates are suggesting a compromise in the payroll tax debate: pay for the tax cut by raising taxes on the wealthy, but exempt small business owners. That might be too complicated to work.

Politicians have been searching for a defining issue to crystallize the “us versus them” game that has been going on in Washington for the past several years.
The latest is the temporary $1,000 payroll tax cut that is set to expire at the end of this year.? Both sides have their scheme to keep the cut in place.? Those of the left want to “pay” for temporary renewal of the tax cut with a permanent tax increase on the wealthy.?

Skip to next paragraph Dr. Jeffrey R. Cornwall

Jeff is the Jack C. Massey Chair in Entrepreneurship and Director of the Center for Entrepreneurship at Belmont University in Nashville, Tenn.

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“Don’t be a Grinch,” says President Obama. “Don’t vote to raise taxes on working Americans during the holidays.”? If keeping taxes low is such a good thing, why did they make this payroll tax cut temporary?? But I digress…

Those on the right want to renew the tax cut, but not tie it to any other tax increase.? The right has raised concerns that many among the wealthy who would be paying higher taxes are actually the very entrepreneurs who everyone wants to get busier creating jobs and economic growth.

As always seems to happen, we now have a group of “moderates” suggesting a compromise.? They are suggesting the we have a tax increase on the wealthy to “pay” for renewal of the temporary tax cut, but exempt small business owners.? Sounds like a simple solution, and my guess is something like this compromise may actually pass.? The problem is that such moderate compromises, while they can sound nice and reasonable, often make the waters even muddier.
This compromise is lousy policy.?

Yes, tax cuts (or avoiding tax increases) help spur entrepreneurial activity according to most research on the topic.? The problem with the compromise is that any exemption for small business owners is surely going to require more tax code and more regulation.? We also know from research that increasing regulation and complexity of the tax code decreases entrepreneurial activity.

Let’s start with what the Federal Government uses to define a small business.? Under a certain number of employees?? Under a certain level of revenues?? Well, kind of, but years of lobbyists seeking favor for special interests for specific types of small businesses has resulted in an official definition of small business that is 45 pages long!!!? You can see the entire document here.

Certifying that you are actually a small business owner eligible for exemption from the tax increase will probably end up costing you more in staff time and CPA bills than any savings in taxes.

But appearance seems to always trump substance and wisdom these days.? Since in a sound bite the small business exemption will appear like a reasonable compromise it will likely play well in this never-ending election cycle.

But six months from now, when those who pass the laws have moved on to other issues, small business owners will be left scratching their heads, trying to sort out how they can avoid paying the latest “wealthy” tax.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers’ own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger’s own site by clicking on www.drjeffcornwall.com.

Source: http://rss.csmonitor.com/~r/feeds/csm/~3/3vBx5mS98SQ/The-lousy-politics-of-the-payroll-tax-cut

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Anti-death-tax advocates eye victory in Tennessee (Daily Caller)

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In a letter to Republican Gov. Bill Haslam sent last week, the American Family Business Institute (AFBI) ? a trade group opposed to the death tax ? kept pressure on the governor to back the Republican-majority General Assembly?s effort to repeal the tax on estates levied after the owner dies.

Haslam has expressed concerns that Tennessee?s budget problems have left it unprepared to take on Republican-planned inheritance tax cuts, the Tennessean newspaper reported. His concerns are not shared by GOP General Assembly leadership, which has vowed to move ahead.

Applying to estates worth more than $1 million, in 2010, Tennessee used the tax to collect approximately $107 million, the Tennessean continued.

?It is true that while serious reforms like eliminating the death tax present short-term challenges,? the AFBI letter began, ?they are necessary steps towards leaving a legacy of economic prosperity in Tennessee and promoting job creation from the most productive sector of the economy ? family businesses.?

The letter also cited a study by economic guru Art Laffer?s Laffer Associates, that concluded that, ?Tennessee?s estate and gift tax is the single greatest reason why wealthy people don?t want to live in Tennessee.?

?Tennessee?s estate and gift tax, the [Laffer study states], has already reduced state GDP by up to $18.2 billion over the past ten years,? the letter continued. ?In addition, the robust economic growth resulting from elimination of the state?s inheritance tax, would have added at least $7 billion to state coffers over the last ten years. The tax currently accounts for less than 1 percent of total state revenues.?

When the taxpayer dies, the death tax?confiscates?a percentage of their holdings, even though they were already taxed when first earned. The tax has become a favorite villain for supply-side economists, who maintain that by taxing people large amounts of money for saving ? rather than spending ? the government is double-taxing, creating disincentives for responsibility and destroying family businesses that cannot protect their assets from death like their big-business competition does. Liberals touts the tax as an important source of government revenue and a blockade against the development of an American ruling class.

?The first domino to fall this year was the state of Ohio, which completely repealed its state estate tax in order to attract and retain more family businesses,? Palmer Schoening, director of federal affairs at AFBI, told The Daily Caller. ?We plan to make history by axing several other states? death taxes in 2012, starting with Tennessee.?

The letter was also signed by a who?s-who of the center-right tax movement: The presidents of Americans for Tax Reform, Americans for Prosperity, National Taxpayers Union and the Beacon Center of Tennessee.

AFBI is a trade association that represents family business owners and farmers.

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Source: http://us.rd.yahoo.com/dailynews/rss/gop/*http%3A//news.yahoo.com/s/dailycaller/20111220/pl_dailycaller/antideathtaxadvocateseyevictoryintennessee

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