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Wednesday, September 24, 2008

Economic Recovery Plans

From Reason Foundation research associate Anthony Randazzo:

First, Congress could eliminate or reduce the capital gains tax...

Second, Congress could cut corporate taxes and small business taxes in general...

Third, the SEC should suspend the "mark-to-market" accounting rules for long-term assets that are driving firms into bankruptcy. Essentially, these regulatory rules are forcing firms to value their assets at much lower prices than what they would be worth long-term. The intent of mark-to-market regulation was to keep firms from overvaluing themselves and deceiving investors. Instead the law has artificially devalued financial institutions as a whole, which hurts their investors...

Fourth, Congress should repeal Sarbanes-Oxley, which is driving away entrepreneurial spirit. This law, passed in the wake of the Enron and WorldCom collapses, was intended to rein in corporate fraud. But the rules it put in place have not protected America from perverse profit motives brought on by the "too big to fail" philosophy. It has instead frightened off new business ideas with bureaucratic nightmares—$3 million per startup annual accounting fees—that are weakening the economy.

Great minds think very much alike - here's the Newt Gingrich plan:

First, suspend the mark-to-market rule which is insanely driving companies to unnecessary bankruptcy...

Second, repeal Sarbanes-Oxley...One firm told me they would bring more than 20 companies public in the next year if the law was repealed. Its Sarbanes-Oxley’s $3 million per startup annual accounting fee that is keeping these companies private.

Third, match our competitors in China and Singapore by going to a zero capital gains tax. Private capital will flood into Wall Street with zero capital gains and it will come at no cost to the taxpayer. Even if you believe in a static analytical model in which lower capital gains taxes mean lower revenues for the Treasury, a zero capital gains tax costs much less than the Paulson plan. And if you believe in a historic model (as I do), a zero capital gains tax would lead to a dramatic increase in federal revenue through a larger, more competitive and more prosperous economy.

Fourth, immediately pass an "all of the above" energy plan designed to bring home $500 billion of the $700 billion a year we are sending overseas.

No plan would be complete without elimination of the Community Reinvestment Act. Everybody (other than foreign enemies who want to see the United States fall) loses when lenders are forced to make bad mortgages - borrowers lose their homes, lenders like Fannie and Freddie wind up with unmarketable mortgage certificates.

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