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Bad Taxes at Home Cause Trouble Abroad
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Press Release

Bad Taxes at Home Cause Trouble Abroad

As the global economy becomes more integrated and capital flows more freely around the world, the need for fundamental tax reform in the United States becomes more evident. Just recently, the World Trade Organization (WTO) announced that the European Union could move forward with $4 billion in sanctions against the United States. The sanctions are a response to current tax policy in the United States, which provides tax credits to companies doing business overseas. These tax credits were claimed to be an unfair export subsidy for American companies. What’s really unfair is the federal tax code, which has become so burdensome and complex that other countries are becoming more attractive to investors.

09/04/2002
A Tough Row to Hoe
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Press Release

A Tough Row to Hoe

This Week. Both the House and Senate resume legislative business this week after a month-long August recess. The Senate, which reconvened on Tuesday, will focus on legislation to create a Department of Homeland Security, S. 2452 and the 2003 Interior appropriations bill. The House, which does not begin work until today (9/4) has eight bills to be considered under suspension of the rules, a dam safety measure (HR 4727), a measure to make permanent various education tax breaks included in last year's big tax-cut package and motions to go conference on two spending bills. On Friday, both Houses will be conducting a special meeting in Federal Hall in New York, New York in remembrance of the victims and the heroes of September 11, 2001. A Tough Row to Hoe This will be a tough couple of weeks for legislators. Looming over them is the November 5th election currently only 8 short weeks away. Despite their best efforts to the contrary, any decision or legislation they undertake will be rife with the underlying politics. It is impossible to separate the two – with an almost evenly divided Senate and a single digit majority in the House – there is too much at stake.

09/04/2002
Monkeys With Darts
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Press Release

Monkeys With Darts

When George W. Bush was sworn in as the 43rd President of the United States the Congressional Budget Office (CBO) estimated that the federal budget for fiscal year 2002 would be in surplus by an eye-popping $405 billion. Last week, the CBO issued its latest estimate for 2002: a $157 billion deficit. In just over 19 months in office, President Bush has overseen a $552 billion swing in the 2002 budget and an estimated $7 trillion deterioration of the federal government’s 10-year fiscal outlook.

09/04/2002
Empower America Co-Director Jack Kemp Strongly Endorses the Cox Bill to Repeal the Double Taxation of Dividends
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Press Release

Empower America Co-Director Jack Kemp Strongly Endorses the Cox Bill to Repeal the Double Taxation of Dividends

Today, Congressman Christopher Cox (R-CA) introduced a bill to repeal the double taxation of dividends titled, “The Investor Protection, Market Stabilization, and Tax Fairness Restoration Act.” In a letter to his former House colleagues, Empower America co-director Jack Kemp strongly supported the Cox bill and urged Congress and the administration to embrace even broader legislation to encourage capital formation, productivity, and employment while simultaneously moving the tax system toward fundamental tax reform.

09/04/2002
Empower America Co-Director Jack Kemp Strongly Endorses the Cox Bill to Repeal the Double Taxation of Dividends
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Press Release

Empower America Co-Director Jack Kemp Strongly Endorses the Cox Bill to Repeal the Double Taxation of Dividends

Today, Congressman Christopher Cox (R-CA) introduced a bill to repeal the double taxation of dividends titled, “The Investor Protection, Market Stabilization, and Tax Fairness Restoration Act.” In a letter to his former House colleagues, Empower America co-director Jack Kemp strongly supported the Cox bill and urged Congress and the administration to embrace even broader legislation to encourage capital formation, productivity, and employment while simultaneously moving the tax system toward fundamental tax reform.

09/04/2002
Group Ads Blasting Kulongoski
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Group Ads Blasting Kulongoski

BY Jeff Mapes

Summary: The Democratic candidate calls Citizens for a Sound Economy's ad inaccurate A conservative, pro-business group has begun airing a television ad that attacks Democratic gubernatorial nominee Ted Kulongoski for supporting tax increases. Kulongoski's campaign called the ad inaccurate and demanded that Citizens for a Sound Economy take it off the air. Russ Walker, the group's Oregon director, defended the ad and said it would continue to run. His organization, which receives funding nationally from a number of large corporations, is a tax-exempt nonprofit group and regards the commercial as educational and not as a campaign ad. The commercial says Kulongoski supports $559 million in higher income taxes and a doubling of the state's $15-a-year vehicle registration fees, which the ad says would hurt the state's economy. Although Kulongoski in April said he would support a one-year income-tax surcharge to help protect funding for schools, he has never supported a specific dollar amount for such a surcharge, said Kristen Grainger, Kulongoski spokeswoman. "What we're seeing here is an organization not letting the facts get in the way of a hit ad," she said. She noted that the ad cites as its source a news article that contains no dollar figure for Kulongoski's proposal. Walker said the dollar figure was a conservative estimate of what such a surcharge would cost. He also said his group was acting independently of the campaign of Kulongoski's chief rival, Republican Kevin Mannix. Mike Beard, a Mannix spokesman, also said Mannix had nothing to do with the ad. "I would be surprised if we don't see more independent expenditures along this line," Beard said. "Oregonians are becoming aware that Kulongoski will raise taxes."

09/04/2002
Coalition for Auto Insurance Competition
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Coalition for Auto Insurance Competition

The New Jersey State Senate today passed legislation correcting years of politically influenced auto insurance regulations that have eroded the availability of coverage for drivers. Voting 29-4, the Senate approved the New Jersey Automobile Insurance Competition and Choice Act, which aims to attract more auto insurers to do business in New Jersey and provide consumers greater and easier access to auto insurance coverage. "Years of excessive regulations have turned New Jersey into a horror story for drivers seeking insurance," said John Friedman, chairman of the Coalition for Auto Insurance Competition. "Thanks to bipartisan leadership, New Jersey drivers are closer to reaping the benefits of a truly competitive auto insurance marketplace." Politicizing and over regulating auto insurance is the root cause of the state's exodus of auto insurers, leaving consumers too few companies from which to purchase auto insurance. Five of the six largest auto insurers in the nation do not sell auto coverage in the state and more than twenty auto insurers have left New Jersey in the past decade. "Considering the New Jersey's nationwide reputation to over regulate auto insurance, today's Senate vote has tremendous significance," said Friedman. "Today's bi-partisan vote is confirmation that lawmakers are serious about true reform. For drivers, today means there is hope that our auto insurance crisis may be near an end. But first, the Assembly needs to immediately follow the Senate's lead and pass this bill now. Drivers can't wait any longer." The Coalition members include the National Association of Independent Insurers, Insurance Council of New Jersey, American Insurance Association, New Jersey Chamber of Commerce, Independent Insurance Agents of New Jersey, Citizens for a Sound Economy, National Association of Mutual Insurance Companies, New Jersey Association of REALTORS(R), Professional Insurance Agents of New Jersey, New Jersey Food Council, New Jersey Retail Merchants Association, NJ SEED (Society for Environmental, Economic Development) Latino Chamber of Commerce of Mercer County, and the Commerce and Industry Association of New Jersey. CHOICE AND COMPETITION Municipalities supporting New Jersey Automobile Insurance Competition and Choice Act Avon-By-The-Sea Borough Barrington Borough Bernards Township Boonton Town Branchville Borough Brooklawn Borough Buena Vista Township Butler Borough Cape May City Freehold Borough Frelinghuysen Township Garfield City Glassboro Borough Harrison Town Hillside Township Jefferson Township Laurel Springs Borough Little Ferry Borough Long Beach Township Mantoloking Borough Maurice River Township Middlesex Borough Millburn Township Millville City North Arlington Borough North Wildwood City Ocean Township Passaic City Pennsville Township Point Pleasant Beach Borough Somerville Borough Tuckerton Borough

09/03/2002
Coalition For Auto Insurance Competition
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Coalition For Auto Insurance Competition

Legislators are about to hear the call for auto insurance reform from thousands of New Jerseyans concerned and frustrated over the lack of auto insurance choices. Citizens are signing a petition from the Coalition For Auto Insurance Competition urging legislators to reform the state's antiquated and anti-competitive auto insurance laws by passing The New Jersey Automobile Insurance Competition and Choice Act. "Our surveys show that consumers overwhelmingly support legislation that will result in more companies doing business in New Jersey and giving consumers more choices," said John Friedman, chairman of the Coalition for Auto Insurance Competition. "This bill would do just that." More than 90,000 petitions are on their way to homes. Petitions are also available on the Coalition's website at www.njcaic.org. This new push builds on education efforts already undertaken by the Coalition and gives residents a means to voice their frustration over a lack of competition in the auto insurance marketplace. The Coalition points to the state's excessive regulation of auto insurance as the culprit behind the lack of sufficient auto insurance choice and competition. "Four out of the six largest insurers in America already do not do business in New Jersey and when State Farm, the state's largest auto insurer, completes its withdrawal currently in process, that number will increase to five out of six," said Friedman. The latest figures show New Jersey has 47 percent fewer companies selling auto insurance than Illinois and more than a third fewer than neighboring New York and Pennsylvania. More than 20 auto insurance companies have left New Jersey in the past ten years. "Having to operate under the state's restrictive and difficult regulatory regime where insurers are told what products to sell, to whom they must sell to and how much to change, companies will lack an incentive to remain and invest in New Jersey," continued Friedman. "We need a regulatory system that promotes competition, encourages companies to sell auto insurance in New Jersey, and creates a stable market that offers more choices for consumers." The New Jersey Auto Insurance Competition and Choice Act outlines reforms to attract more auto insurers to New Jersey by permitting companies to use industry-accepted standard underwriting methods already used in nearly every state. The Coalition welcomes the participation of consumers, businesses, and associations who seek to work together to bring about meaningful and responsible auto insurance reform. Members include the National Association of Independent Insurers, Insurance Council of New Jersey, American Insurance Association, New Jersey Chamber of Commerce, Independent Insurance Agents of New Jersey, Citizens for a Sound Economy, National Association of Mutual Insurance Companies, New Jersey Association of REALTORS, Professional Insurance Agents of New Jersey, New Jersey Food Council, New Jersey Retail Merchants Association, NJ SEED (Society for Environmental, Economic Development), Somerset County Chamber of Commerce and the Commerce and Industry Association of New Jersey. CONTACT: Winning Strategies Ernie Landante, 973/799-0200 URL: http://www.businesswire.com

09/03/2002
Coalition For Auto Insurance Competition
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Coalition For Auto Insurance Competition

"Your auto insurance policy will be not renewed." Every day for the next two years, hundreds of New Jersey drivers will receive the message that their auto insurer will not renew their coverage. And unless state legislators act quickly, these drivers will find they have few places to turn in this market bereft of consumer choice. Starting in September, State Farm Indemnity will send out notices to the owners of four thousand cars every month informing them that their auto insurance coverage will not be renewed, as part of the order governing State Farm Indemnity's withdrawal from the New Jersey market. The remaining State Farm Indemnity auto policies are scheduled to be non-renewed sometime after 2005. An additional 20,000 policy holders of the Robert Plan will get that same nonrenewal message this fall. And several other insurers are already over their capacity and have previously received permission from the Department of Banking and Insurance to stop writing new policies because of their financial condition. "Thousands of drivers will soon face the ugly truth about auto insurance in New Jersey," said John Friedman, chairman of the Coalition for Auto Insurance Competition. "Excessive regulation has forced more than two dozen insurance companies to flee New Jersey, leaving drivers with insufficient choice and options." To complicate matters, the ability of New Jersey's few remaining insurers to handle the influx of policies is in doubt. "One of New Jersey's other major insurers, New Jersey Manufacturers, has reported that it is already swamped with calls from drivers desperately trying to find coverage, and not a single State Farm Indemnity or Robert Plan policyholder has received the nonrenewal letter," continued Friedman. "Of the remaining insurance companies, 18 percent are exempt from the take-all-comers law because of their financial condition and are not accepting new customers. This underscores the immediate need to address how the state regulates the auto industry." The Coalition for Auto Insurance Competition has been working to educate New Jersey drivers and policy makers to prevent an unprecedented statewide auto insurance crisis precipitated by the deterioration of the financial health of New Jersey's auto insurance industry. It points to the state's excessive regulation of auto insurance as the culprit behind the lack of sufficient auto insurance choice and competition. "Having to operate under the state's restrictive and difficult regulatory regime where insurers are told what products to sell, to whom they must sell to and how much to change, companies will lack an incentive to remain and invest in New Jersey," continued Friedman. "We need a regulatory system that promotes competition, encourages companies to sell auto insurance in New Jersey, and creates a stable market that offers more choices for consumers." The Coalition is calling for passage and enactment of the New Jersey Auto Insurance Competition and Choice Act (A-2625), sponsored by Assemblyman Lou Greenwald. The legislation outlines reforms that will attract more auto insurers to New Jersey by permitting companies to use industry-accepted standard underwriting methods already used in nearly every state. It also adjusts the low ceiling on company profits to permit a reasonable rate of return. "Until reforms are made that promote greater consumer choice and industry competition, insurers will continue to lack the incentive to grow and invest capital in New Jersey, leaving drivers in a lurch," said Friedman. "Unfortunately, it seems that many of the states' leaders are content to avoid this issue until the market collapses." The latest figures show New Jersey has 47 percent fewer companies selling auto insurance than Illinois and more than a third fewer than neighboring New York and Pennsylvania. More than twenty auto insurance companies have left New Jersey in the past ten years, and two have left in the last year. The Coalition welcomes the participation of consumers, businesses, and associations who seek to work together to bring about meaningful and responsible auto insurance reform. Members include the National Association of Independent Insurers, Insurance Council of New Jersey, American Insurance Association, New Jersey Chamber of Commerce, Independent Insurance Agents of New Jersey, Citizens for a Sound Economy, National Association of Mutual Insurance Companies, New Jersey Association of REALTORS, Professional Insurance Agents of New Jersey, New Jersey Food Council, New Jersey Retail Merchants Association, NJ SEED (Society for Environmental, Economic Development), Somerset County Chamber of Commerce and the Commerce and Industry Association of New Jersey.

09/03/2002
Have Gov't Antitrust Actions Made Airlines' Woes Worse
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Have Gov't Antitrust Actions Made Airlines' Woes Worse

BY Joseph Gointo

What hurts consumers more, a merger or a bankruptcy? That's what some are asking after financial woes at US Airways and United Airlines. The two carriers scrapped a merger last summer after the Justice Department threatened to sue. It's hard to imagine now, but at the time Washington frettedthe combined carrier would be too dominant. Dozens of lawmakers complained that deal would hurt constituents. Sen. Charles Schumer, D-N.Y., for one, said it would mean a cutback in flights to New York, especially daily service from Washington's Dulles International to upstate cities. But times have changed. US Airways is bankrupt. It's cut more than 30% of its schedule. United, veering toward Chapter 11, has slashed flights by 20% andlaid off thousands. And flights between Dulles and upstate New York? United has cut daily departures to Albany from nine to four, to Syracuse from nine to three, and to Rochester from 11 to four. More cuts may be coming. Should Have Merged That has some asking if Justice was wrong to block the deal. "While the effects of Sept. 11 on airline travel cannot be underestimated . . . much of (United's and US Airways') financial turmoil could have been averted had the Bush administration allowed the two airlines to merge," said Jason Thomas, economist at Citizens for a Sound Economy. Few dispute that. But there's no consensus the Justice Department erred in opposing the deal. "The merger would have saved US Airways from the bankruptcy courts," said Richard Gritta, an industry expert at the University of Portland. "But it certainly would have done so at a price to the consumer." Experts may disagree whether Justice made the right decision. But they do agree the decision is important, because airlines are talking partnerships again. So President Bush's trustbusters must again decide whether to allow the deals or squelch them. And this time around, the airlines' finances clearly are worse, while the partnerships are more vague. Instead of merging, US Airways recently said it will "code share" with United. That will let passengers book a flight on one airline but connect to a flight on the other, all through one ticket. Northwest, Continental and Delta announced a similar pact last week. Financial Necessity The Transportation Department is reviewing both code-sharing plans. And the Justice Department may conduct its own review. In the meantime, neither agency has much to say on the subject. While the decisions await, some speculate the financial upheaval in the airline industry may mean a smoother ride through the review process than the US Airways-United deal got last year. "It is accepted by all sides, including the Department of Justice, that whena company is in financial trouble, exceptions (to antitrust rules) are made," said Nicholas Economides, an antitrust expert at New York University. The exceptions fall into a couple of categories. Both the "failing firm" and"existing assets" theories of antitrust law let otherwise anti-competitive deals proceed if one of the parties may go out of business. No one is sure whether those theories would apply to the code-sharing deals,though, since none involves actual mergers. Even if they do, the exceptions might not help. To qualify as a "failing firm," a company has to be in real danger of disappearing from the marketplace. And airlines have a long history of surviving after declaring Chapter 11. Continental has done that twice. Plus, some think the Justice Department may not consider concepts like "failing firm." Rather, it may limit a review to specific parts of the code-sharing deals that may be anti-competitive. That might mean looking at where one carrier's flights overlap with another's to see if code sharing on that route will reduce competition and boost prices. "Justice has a very narrow focus," said Luke Froeb, an economist at Vanderbilt University and an antitrust official under President Reagan. "Broader concerns . . . rarely enter into their analysis. They take it one caseat a time." Still, that can mean problems. When the US Airways-United decision was made,well before Sept. 11, the airline industry already was slumping. At the time, some analysts said a United-US Airways merger was the only way out of bankruptcy. But the contraction of the industry was not key for Bush's trustbusters at the time, many say. Creative Destruction Even if it had been, some experts argue, it's better to let firms fail even if that means short-term harm to consumers -- like the service reductions and price spikes that can happen after an airline goes broke. Economists call that "creative destruction." That idea, from Austrian economist Joseph Schumpeter, suggests markets must cycle through failure to achieve "perfect competition." Sick, dying firms are replaced by healthy, vibrant ones. By those terms, Justice arguably made the right choice in nixing the United-US Airways deal. "There are definitely short-run ramifications if an airline fails," Gritta said. "But ultimately the free market works. The airlines wanted deregulation. They got it. In a deregulated market, if you fail, you fail."

09/03/2002

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