Obamanomics: Business rows; Government steers

My column today explores how Obama is simultaneously "pro-business" and anti-market:

If not for high taxes and targeted tax credits, capital would flow toward whatever technologies or business investors thought most promising -- this is how markets help society. Thanks to the web of taxes and credits, though, capital instead flows wherever politicians and bureaucrats have decided is best.

Obama, to be fair, offsets some of the distortion inherent in subsidies and tax credits, because he is trying to create so many -- not just wind, but solar, natural gas, nuclear, and biomass. While this avoids the error of putting all of our energy eggs in one basket, it still is less efficient than the free market.

Obama's pledges of open, clean government increasingly look like smoke and mirrors. My column explores the latest:

Mark Ernst, in December 2007, was chief executive officer of H&R Block, the nation's largest tax-preparation company. Thirteen months later, once President Obama took office, Ernst was named a deputy commissioner at the Internal Revenue Service, where he would spend his first year drafting new regulations for tax preparers -- regulations that H&R Block welcomes and market analysts say will benefit the company.

With Ernst in mind, recall Barack Obama's campaign pledge: "No political appointees in an Obama administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years."

Big tax-prep companies welcome IRS regulation

Another Obama regulation, and more applause from the biggest businesses being regulated. This time, my column explains, it's the tax preparers:

The Internal Revenue Service has proposed new regulations on paid tax preparers, and the biggest companies in this business have quickly responded -- roundly endorsing the new regulations, whose primary effect may be to kill off their smaller competitors. H&R Block's recent chief executive officer, appointed deputy commissioner of the IRS by President Obama, participated in crafting these new regulations, which benefit his company.

Life insurers lobby to save the death tax

Is the estate tax debate really just about the wealthy resisting a tax hike? My column explains the real dynamic:

While senators debate health care, House Democrats have quietly moved to save the federal estate tax, scheduled to disappear next month. In this push to preserve the so-called "death tax," Democrats have an important K Street ally: The life insurance companies that peddle estate-planning products.

McDonnell should let the market, not developers, guide transportation policy

Governor-elect Bob McDonnell won well-deserved praise for his transportation plan, but I argue, in my column today, that he didn't go far enough in promoting the role of market forces.

More roads and more lanes spurs more homes and more developments -- and that doesn't alleviate traffic....

Traffic affects people's home-buying decisions and job-seeking decisions. If Route 29 and Interstate 66 are nightmares, many people will decide either to live closer in or work further out. When politicians decide to pave more roads or add more lanes, they aren't alleviating traffic -- they are subsidizing the cost of living in Loudoun and working downtown.

How Steve Shannon's friends profit from your tax dollars

I wade into Virginia politics in my column today, looking at the Democrat in the attorney general race, and why Northern Virginia developers are backing him:

And the Fairfax Chamber of Commerce is openly at war with Virginia taxpayers. The organization's agenda includes opposing a homestead deduction to property taxes (a deduction that would make it easier for families to afford life in the costly county) and opposing legislative efforts to prevent developers from offloading costs to taxpayers.

The chamber has endorsed Shannon, who regularly describes himself as "pro-business." There's more than one way to be "pro-business," though: You could favor lower taxes and less regulation as Cuccinelli does, thus creating an open and level playing field for all businesses -- even those that don't yet exist. Or you can support a system of taxes and subsidies as Shannon does, thus rewarding existing businesses, especially those who are politically well-connected.

When asked in a recent debate for details about what the AG job entailed, Shannon filibustered and evaded so badly that Cuccinelli jokingly made a court room-style objection that the witness was not answering the question -- more evidence Shannon is really running this year for the 2013 gubernatorial nomination. Well, the Post and the Northern Virginia developers are pleased that Shannon is a pro-tax increase "Aspiring Governor."

Rangel uses tax code to squeeze contributors

Ways & Means Chairman Charlie Rangel raised more in one election than his GOP predecessors did in six cycles. My column explains how:

Only one PAC contributed the maximum $10,000: The National Fire Sprinkler Association, which cut $5,000 checks Jan. 7 and Jan. 9.

A week later, NFSA President John Viniello told his Illinois and Wisconsin chapters that Rangel "will be supportive" of the Fire Sprinkler Incentive Act, according to the NFSA's newsletter.

Two weeks after that, on Feb. 1, the NFSA held a fundraiser for Rangel -- a $700-a-head breakfast in New York City, attended by a dozen executives and owners of fire sprinkler companies. "He's crucial to the bill," NFSA spokesman Jim Dalton explained to me in discussing the fundraiser.

Graham’s bill is accidental tax cut for wealthy

DC Councilman Jim Graham wanted to boost DC revenues and raise taxes on the wealthy, and so he introduced the "Equitable Income Tax Act of 2009." There's a problem, though: the bill would actually provide a massive tax CUT to those earning just over $500,000, and some tax cut to everyone between $500,000 and $9.6 million. I tell the tale in an Examiner piece today.

Ryan Ellis, tax policy director at Americans for Tax Reform, which opposes all tax increases, says the bill would reduce taxes. “The bill as written is a massive tax cut for D.C. households making over $500,000 per year.” Ellis added, “According to this bill, someone with taxable income of $499,999 would pay $41,300 in D.C. income tax. Someone making $500,001 would pay $5,000 in D.C. income tax.”

Read the whole piece here, and read Graham's bill here.

Rangel is Capitol Hill money man

My September 12, 2008, Washington Examiner column looks into Charlie Rangel's modus operandi:

If his acceleration in fundraising isn’t evidence enough that Rangel has turned his chair into a fundraising tool, the Baucus-Rangel Leadership Fund should be a tip-off. One month into the new Democratic majority, Rangel formed a joint fundraising committee with Democratic Sen. Max Baucus of Montana.

What do the two have in common, aside from the fact that there is a Harlem, Mont.? Baucus is chairman of the Senate Finance Committee, the upper chamber’s tax-writing committee. What would be the purpose of a joint fundraising committee controlled by the two lawmakers with the most control over tax law?

Sure enough, the donor list is plush with developers, financiers and wealthy businessmen with interesting tax situations.

Read the whole thing here.