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Tuesday, December 28, 2004

Political Capital Indeed...

Guest Blogger Paul Parker

More “lowlights,” this time Showbiz lowlights from the LA Times (sub required):

We can only imagine what happened after they saw "Alien vs. Predator": Police arrested Melissa and Sean Davidson after the Georgia couple became embroiled in a violent argument after seeing "The Passion of the Christ" in March. The couple left the theater debating whether God the Father in the Holy Trinity is human or symbolic. According to police, Melissa suffered injuries to her arm and face while her husband, Sean, had his shirt ripped off and a stab wound on his hand.

Not that his ex-wife would necessarily agree with him: Musing on the great political leaders of modern times, Ethan Hawke told an interviewer this year: "Martin Luther King Jr. suffered from infidelity, so did John F. Kennedy. You're more likely to find great leadership coming from a man who likes to have sex with a lot of women than one who's monogamous."

I suppose the following comes under the heading of lowlights too:

Tuesday’s Washington Post reports that “Bush Expected to Delay Major Tax Overhaul” until 2006, citing the battles over social security and budget cutting that are first in line.

This does not mean that no real changes are underfoot. The Post article clearly suggests that one proposal is receiving favor, and the major provisions umistakably continue Bush’s desire to cut taxes on unearned income and shift them onto middle class folk.

Under what has become known among lobbyists on K Street simply as "Option 5," Bush's previous tax proposals would be enhanced, not replaced. Washington would create lifetime savings accounts and retirement savings accounts to replace the current array of tax-preferred savings accounts for retirement, education and health care.

A lifetime savings account would allow each person to save up to $5,000 a year, shielding capital gains, interest and dividend income from all taxation. Unlike existing tax-favored accounts, the money could be withdrawn at any time for any reason. A family of four could shield $20,000 a year from investment taxation, and since few families could save that much, capital gains, interest and dividend taxation would effectively end for the vast majority of Americans, the Treasury study said.


And corporations would be allowed to immediately deduct -- or "expense" -- from their taxes a portion of the cost of business investments, instead of having to slowly write off those costs based on complex depreciation allowances.

How to pay for this?

To cover the cost of the tax changes, the plan would tax the value of an employee's health insurance benefit as if it were income. "Most Social Security benefits" would also be taxed as income, the report says. Finally, the plan eliminates the itemized deduction for state and local tax payments.

Yes, I can see why K Street would like this plan. As Paul Harvey says, “No known connection, but…” the NY Times ran the following story today: “That Line at the Ferrari Dealer? Its Bonus Season on Wall Street.”

Regarding the delay on his ambitious agenda, one might also speculate that Bush did not earn as much “political capital” from the November election as he claimed. Delaying tax reform for a year does have the advantage of forcing a vote on the eve of the off-year election – a tactic he and Rove appear to favor – but also carries the potential disadvantage of Bush being even more unpopular than today. Tuesday’s LA Times reports “Reelection Honeymoon with Voters Eludes Bush, Polls Say:.” Suspect number one is the Iraq War:

"A lot of the talk about momentum and agendas and political realignment is overdone, in the sense that it all depends on this contingent fact of how Iraq goes," said William Kristol, editor of the conservative Weekly Standard.


One person who met with Bush the same day a U.S. military mess tent was bombed in Iraq described the president as "distraught."

Well, those were (mostly) Americans. As for the late-breaking NY Times headline, “24 Die in String of Iraq Insurgent Attacks,” 19 are Iraqi police, haven't they received the word that they need to do more to take control of their country?

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