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In Action

Legislature: Chance to Vent Over Oregon Tax
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Legislature: Chance to Vent Over Oregon Tax

BY Howard Buck

OLYMPIA -- It may be little more than a shout into the wind, but Clark County residents angry over paying Oregon income tax have won a chance to vent to Washington legislators. At 1:30 p.m. Wednesday, the House Finance Committee will hear House Joint Memorial 4010, a simple memorial resolution lacking any teeth south of the Columbia River. Testimony will be taken in Hearing Room C, in the John L O'Brien Building (House offices).

02/24/2001
Same Old Song and Dance from the DOJ
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Press Release

Same Old Song and Dance from the DOJ

Monday the Circuit Court of Appeals for the District of Columbia will hear oral arguments in the case of U.S. v. Microsoft. The arguments are only the latest step in the federal government’s campaign to micro-manage the development of new technology and to punish Microsoft for improving its products while lowering prices.

02/23/2001
A Tax We Can All Live Without
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Press Release

A Tax We Can All Live Without

Recently, a group of extremely wealthy Americans voiced opposition to bipartisan efforts in Washington, D.C. to abolish the death tax. However, these billionaire activists do not address the strong disincentive created by the tax, or the burden it imposes on small farms and businesses.

02/23/2001
Tax Cut Update 1
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Press Release

Tax Cut Update 1

House Ways and Means Committee Holds Hearing on Bush Tax Plan On Tuesday, February 13, the House Ways and Means Committee held a hearing on President Bush’s tax relief proposal. Treasury Secretary Paul O’Neill and several other experts testified on the plan. Not surprisingly, the proposal was met with both applause and disapproval from committee members and guest witnesses.

02/23/2001
Texas CSE Asks: Should a Tax Tax a Tax?
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Press Release

Texas CSE Asks: Should a Tax Tax a Tax?

Taxes are one of life’s unpleasant certainties. Tax revenues are used to fund —both necessary government functions and its more spurious activities. At all times, tax assessment should be done in a straightforward manner to ensure that the taxpayer is aware of what is being taxed, why it is taxed and what is owed.

02/23/2001
CSEmail Update
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Press Release

CSEmail Update

CSE's most valuable asset is you, the activist. For this reason, we bring you the weekly e-mail newsletter, CSEmail Insider. This newsletter offers the inside scoop on important issues and on what CSE is doing. We hope that you will come to rely on this weekly publication as a valuable resource to aid you in your participation in the political process. - Paul Beckner, President Support President Bush's Tax Cut Proposal Click here to write a letter to your Representative, Senator or the President to let them know that you support tax cuts.

02/23/2001
Keynes Is Passe: Both Parties Say Goodbye To His Stimulus Concept
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Keynes Is Passe: Both Parties Say Goodbye To His Stimulus Concept

By James C. Miller III President Nixon once said, "We're all Keynesians now, " meaning that politicians had learned a lot from economists, including John Maynard Keynes. Liberal wags announced the intellectual debate over. Keynes had won, they said. Not so fast. Yes, Lord Keynes was a bright fellow who made important public contributions. He tried to salvage the post-World War I European economies, and he helped to orchestrate the post-World War II Bretton Woods agreement, which contributed enormously to the economic expansion of victors and vanquished alike. But it was his musing about a "general theory of employment, interest and money" that made him a household name. Other economists, especially some in the U.S., embraced his theory, using it to justify a large role for government. To the problem of recession or depression, they answered: Prime the pump, increase government spending. Later, pump-priming took the form of tax cuts, as in the initiative launched by President Kennedy (although it has become increasingly evident that he did this more for what are now called supply-side reasons). The domination of Keynesian fiscal policy reached its zenith during President Johnson's administration, with the ascension of Gardner Ackley to the chairmanship of the Council of Economic Advisers. By then, it was presumed by almost every professional economist that the way to ensure full employment was through demand management, and that the way to accomplish this was through fiscal policy. Monetary policy was presumed to be of little use, and was largely ignored. Then, over the next decade or so, there was an interesting and altogether unexpected development. Researchers, led most importantly by the research shop at the Federal Reserve Bank of St. Louis, began testing the relative effectiveness of fiscal policy vs. monetary policy and found the latter quicker and far more predictable in its effects on aggregate demand. In a rough-and-ready way, this was a debate over monetarism vs. Keynesianism, and monetarism won. The supply-side revolution, which emphasizes the need to maintain low tax rates and small government and pursue stable monetary policies to promote economic growth and maintain full employment, has carried the day. Notice that the Bush tax cut is being supported and opposed primarily as a moral matter. "It's not right for the government to keep so much of your money" - and "No one should have to give the government more than one-third of their income" - are mantras of its proponents. Opponents say it would "cost too much" and that it would "buy a Lexus for the millionaire, but just a muffler for the working person." Because of recent adverse economic news - last month Federal Reserve Chairman Alan Greenspan suggested the economy is probably at a standstill - some argue that an immediate tax cut is needed to stimulate the economy. But note, this debate is not really being framed in Keynesian terms. While Treasury Secretary Paul O'Neill has argued for putting "money into the hands of Americans quickly," this should not be considered evidence of a "revival of Keynesianism," as argued by Washington Post columnist Sebastian Mallaby. The real argument for making the tax cut immediate rests on history: The tax cut must avoid what happened with the Reagan tax cuts in the early 1980s, where the delay in their implementation caused people to shift taxable income to the future, making the recession more acute than it would have been otherwise. Cutting taxes immediately to increase confidence in the future, and thereby promote consumption and new investment, is an argument properly characterized as supply-side. Opponents fall back on their "can't afford" rhetoric. According to New York Times economics columnist Paul Krugman, "claims that tax cuts can be accelerated without reducing our soon-to-be-gone budget surplus are disingenuous." This may or may not be true, but it hardly qualifies as a demand-side argument. No longer is the debate over pump-priming. Gone are proposals for countercyclical spending increases and one-shot injections of consumer purchasing power - such as Sen. George McGovern 's offer to give everyone a cash grant, a notion revived under President Carter by Charles Schultze, then CEA chairman. If this intellectual turnaround seems a little breathtaking, keep in mind that it is breathtaking to professional economists as well. Once the staple of any course in macroeconomics, Keynesianism is now all but abandoned. We should not let deficiencies in Keynes ' general theory and what it spawned blind us to his important contributions. But the idea that made him a household name, "fiscal stimulus," is no longer taken seriously by either political party. James C. Miller III is a former director of the Office of Management and Budget. He is now counselor to Citizens for a Sound Economy Foundation, a market-based public policy organization in Washington, D.C.

02/22/2001
We Can Afford a Much Bigger Tax Cut
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Press Release

We Can Afford a Much Bigger Tax Cut

Copley News Service, 02/21/2001 WASHINGTON — Circumstances have changed dramatically since President Bush first proposed his tax cut last year. The economy has slowed down, with recession a distinct possibility. But in the long term, official budget surplus projections have risen from $3 trillion to almost $6 trillion.

02/21/2001
The People Speak Again: Washington CSE Conducts Second Annual CSE Day at the Capitol
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Press Release

The People Speak Again: Washington CSE Conducts Second Annual CSE Day at the Capitol

"Several hundred people, most members of a conservative group called Washington Citizens for a Sound Economy, buttonholed their legislators Monday with a plea for smaller, cheaper, less restrictive state government." - Associated Press

02/21/2001
Who Let the Bears Out?
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Press Release

Who Let the Bears Out?

Citizens for a Sound Economy Foundation Invites you to attend a Policy Watch luncheon Who Let the Bears Out? Perspectives on a New SEC and the Fate of Financial Markets Featuring: Honorable Laura Unger Commissioner Securities and Exchange Commission Matt Andresen CEO Island ECN Dr. Jerry Ellig Senior Research Fellow Citizens for a Sound Economy Foundation Gregory Smith Senior Analyst JP Morgan H & Q

02/21/2001

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