My latest NewsRealBlog post:
To nobody’s surprise, President Barack Obama has formally announced that he will seek reelection with a video that’s clearly geared toward motivating fans rather than attracting newcomers, as it’s decidedly light on reasons why the incumbent Democrat should be given four more years in the White House.
Fortunately, Newsweek White House correspondent Daniel Stone gets a bit more specific on the Daily Beast, laying out the case he expects Team Obama to make. Let’s take a look at his points, as well as the flip side.
Last week’s economic report showed an unemployment rate continuing to fall—incredibly slowly. It’s not good enough, but it still is progress, Obama will say. Defending the actions the administration took—especially the $987 billion Recovery Act—will fall to Joe “the stimulus sheriff” Biden, who will be fortified by a team of crack researchers preparing colorful graphs showing lines with positive slopes. Obama the president had trouble arguing the hypothetical that “we’d be worse off if I did nothing,” but Obama the candidate might have better luck. Any Republican will publicly doubt him, but would only be able to offer the same hypothetical that he or she would have done any better.
On the other hand, Obama’s going to have to explain the fact that he explicitly claimed his stimulus plan was needed because it would prevent unemployment rising to 8%, we passed it…and unemployment rose past 8% anyway. He’ll have to answer for record job losses. And while the latest economic news is encouraging, it’s tentative—labor force participation is still low, and Obama is unlikely to support one policy that could accelerate recovery further still:
The United States has stood alone while the rest of the developed world has moved forward with a pro-growth strategy of slashing corporate tax rates. The Organization of Economic Cooperation and Development (OECD) reports that its 30-nation membership cut corporate tax rates an average of 7.1 percentage points in the past decade, and the United States will have a federal corporate tax rate one-third higher than the OECD average of 25.7 percent. When Japan’s corporate tax rate is lowered, the United States is one of three nations that will not have reduced the rate.
Corporate taxes are considered the most inefficient of all tax systems. They increase the cost of capital and slow economic growth. Nearly every economist believes that that tax burden falls on individuals, namely the workers and shareholders of the company. A more efficient corporate tax system would increase economic growth and boost the labor market.