- The Washington Times - Wednesday, August 17, 2005

Future of tax cuts

“It was bound to happen eventually, but Republicans may now be concluding that there is no longer any political benefit to pushing for deep tax cuts,” Brendan Miniter writes at www.OpinionJournal.com.

“This may come as a shock to those long convinced that tax cuts are not only good politics, but also good economic policy because they spur growth. But the national tax-reform movement — kicked off by California’s Proposition 13 in 1978, which froze property taxes, and propelled forward by Ronald Reagan winning the White House in 1980 with promises to roll back big government by rolling back taxes — now appears to be running out of steam.

“The reason is that the Laffer Curve applies to politics too. There’s a point at which further tax cuts won’t spur any more economic growth, and there’s also a point after which they won’t win any more elections,” Mr. Miniter said.

“No one knows where either point really is, of course, and some of us are for continually cutting taxes so we can find out for sure. Some economists have theorized that the optimal income-tax rate — the one that will bring in the most revenue and do the least damage to the economy — is probably around 18 percent, because that’s about the amount of the gross domestic product the federal government is able to get its hands on in any given year, no matter where the top income-tax rate stands.

“But on both the national and state level, some Republicans are starting to bet that they know where the point of diminishing political returns is, and that for tax cuts, we’ve already reached it.”

Surprised ‘candidate’

Former Sen. Carol Moseley Braun, Illinois Democrat, expressed surprise about a report that she will run for mayor of Chicago and said she was not running for office.

An official with the Fraternal Order of Police told the Chicago Sun-Times that Mrs. Moseley Braun’s brother, Joe, said in no uncertain terms that his sister would run for mayor and inquired about the timing of the FOP’s mayoral endorsement.

“I’m surprised at that information,” Mrs. Moseley Braun told the newspaper. “I did not ask him to do anything in that regard.”

Mrs. Moseley Braun said some people have encouraged her to run, though.

“I’m a businesswoman now, and I have no current intention of running for any political office,” she said.

Battle of the bucks

The two main candidates for New Jersey governor provided a glimpse into their vast personal wealth by releasing tax returns showing that each had an annual income of about $12 million.

Republican Douglas Forrester paid federal taxes of $3.7 million on adjusted gross income of $12 million in 2003. Democratic Sen. Jon Corzine, meanwhile, paid federal taxes of $1.3 million on adjusted gross income of $11.8 million in 2004, according to tax returns he released in Newark.

Mr. Forrester, who filed for an extension for 2004 and expects to file that year’s tax returns in October, released his 2002 and 2003 returns Monday at his campaign headquarters. Reporters were permitted to peruse, but not remove, the documents, the Associated Press reports.

Mr. Forrester’s tax returns show that he made $295,000 in salary in 2003, $91,000 in interest, and $11.3 million in income from BeneCard Services Inc., his prescription-drug management company.

Mr. Forrester said he would sell his 51 percent interest in BeneCard if elected.

Mr. Forrester paid $767,000 in New Jersey taxes in 2003. He also made $192,000 on the sale of a $340,000 Princeton Junction home in 2003 and gave $125,000 to charity.

Mr. Corzine’s 2004 tax return shows he paid New Jersey income taxes of $978,307, and a total of $2,839 in taxes to 12 other states in which he has business interests.

Mr. Corzine is a former Goldman Sachs chairman who spent a record $63 million of his fortune to get elected to the Senate in 2000.

Not a sponsor

The Department of Health and Human Services says it is “not a sponsor” of an upcoming methamphetamine conference organized by advocates of “harm reduction” drug policy.

HHS was “listed incorrectly” and conference organizers “are removing the department’s name as a sponsor,” Suzy DeFrancis, HHS assistant secretary for public affairs, said yesterday.

Conservatives see “harm reduction” as a steppingstone to drug legalization. Rep. Mark Souder, Indiana Republican, recently asked HHS leaders to explain why the department was listed as a “primary sponsor” of the First National Conference on Methamphetamine, HIV and Hepatitis, organized by the Harm Reduction Project in Salt Lake City.

Conference organizer Luciano Colonna told The Washington Times that HHS was named as a primary sponsor because any agency that kicked in funds was listed that way and HHS gave $3,000 for travel scholarships.

HHS believes in a “balanced approach” of drug prevention, treatment and supply reduction, the spokeswoman said, adding that these messages will be conveyed at an event in Tennessee tomorrow. HHS is responding to Mr. Souder’s letter, she added, but no details are available about the $3,000.

Appeal denied

A federal appeals court ruled yesterday that former Arkansas Gov. Jim Guy Tucker cannot withdraw his guilty plea in a tax-law violation related to the Whitewater investigation into his predecessor, former President Bill Clinton.

Tucker pleaded guilty in 1998 to concealing from the Internal Revenue Service the value of a cable-television system in Florida that he and two partners sold.

He later said the amount of tax owed was excessive and that his guilty plea should be set aside because the IRS conceded that it applied an outdated section of law to his case.

The 8th Circuit Court of Appeals ruled that the amount of fines, restitution and tax owed by Tucker were in dispute, but not his admission of providing false information to the government, Reuters news agency reports.

Prosecutors initially said the conspiracy cost the government $3.5 million in tax revenue, but later reduced the amount to no more than $125,000.

Election set

A special congressional election has been called for Oct. 4 in a Southern California district to fill a vacancy created when Rep. Christopher Cox resigned to become head of the Securities and Exchange Commission.

Gov. Arnold Schwarzenegger issued the proclamation for the election Monday.

State Sen. John Campbell and former Assembly member Marilyn Brewer, both Republicans, have said they plan to run for the seat in the heavily Republican 48th District in Orange County.

Mr. Campbell, who has the governor’s endorsement, is considered by many to be the front-runner.

Former Rep. Robert K. Dornan, 72, the outspoken conservative who represented Orange County from 1985 through 1996 as a Republican, is considering a run as a candidate for the American Independent Party.

Unless one candidate receives a simple majority, a runoff would be held Dec. 6 among the top finishers from each party. Seven parties are recognized in the district.

Greg Pierce can be reached at 202/636-3285 or gpierce@washingtontimes.com.

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