E!!

Harry Reid said the following in a newsletter to his constituents yesterday:

“In his budget request for 2010, President Obama will announce plans to devise a new strategy to find another solution to deal with the nation’s nuclear waste that does not include storing it in Nevada.”

This is a shame if so.  The Yucca Mountain project currently employs hundreds of people and stands to employ thousands more, not to mention the nearly $100 billion it would bring into the hurting state economy.

The operation of nuclear energy plants and the transportation, recycling, and storage of spent nuclear fuel can be done quite safely these days - in fact is done safely all over Europe - but apparently Harry Reid is not going to let the facts get in the way of politics-per-usual and a Wednesday press release.  (More on the latest with Yucca here.)

This is the second time in less than three weeks an Obama agenda item has dealt a heavy blow to Nevada’s economy.  What was the first, you ask?  This offhand comment recently made at a townhall meeting:

“You are not going to be able to give out these big bonuses until you’ve paid taxpayers back, you can’t get corporate jets, you can’t go take a trip to Las Vegas or go down to the Super Bowl on the taxpayers dime.”

Rich Becker wrote an excellent piece on the fallout of that comment, which summed up is this:

Companies are now scrambling to avoid the “stigma” of holding company functions in Las Vegas and millions of dollars have been lost due to cancelled rooms and convention events.  (These organizations aren’t really cancelling the events; they’re just relocating them.  To sunny California, mostly.)  And the tremendous loss of room revenue, convention business, enertainment dollars, and gaming revenue is going to lead to even more layoffs than Nevada’s already seen.

So where are Harry Reid (and Dina Titus) with their outrage and big press releases when Nevada’s economy really needs them?  Busy rubbing elbows with a president who clearly doesn’t give a damn about the what’s best for the Silver State.

I guess Nevada is now “blue” in more ways than one.

But don’t just stand there and cry, good citizens.  You can do something:

http://dumpreid.com/

According to Yahoo! Finance, Nevada is behind only California, Arizona, and Florida in terms of total state budget shortfall.

Nevada’s budget gap is 16% of the total state budget or $1.2 billion.

Nevada has the worst foreclosure rate in the nation, and falling tourism and gambling revenues has slowed the economy dramatically.

A special legislative session in June resulted in budget caps and cuts, but it’s quite likely another special session will have to be called – after the elections in November.

Apparently the peeps back in Massachusetts are considering getting rid of the state income tax.

Didn’t believe it myself until I read this (very biased) Globe piece which confirms that Question 1 is indeed on the ballot, that it would completely abolish the state income tax, and that the last time around (2002) the measure got 45% of the vote.

If approved, the state income tax would be cut from 5.3 to 2.65 percent on Jan. 1, 2009 and then be abolished a year later.

The usual suspects are opposed to the measure, citing concerns about the loss of tax revenue and the subsequent “catastrophic” cuts to “needed” services.  

Taxaholics always warn of the rapid decline of schools, roads, and public safety if voters dare to abolish taxes.  They paint a dire picture of social disintegration:  your kids will suddenly become uneducated boobs; you’ll have to drive a covered wagon to work on a dirt road; and your town will be plundered by Viking marauders.

Or, as supporters of the measure say, Beacon Hill will be forced to find more efficient ways to achieve what really matters and cut unnecessary spending. 

Currently, seven states manage to avoid sliding into total anarchy while imposing no income tax:  Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.  Additionally, New Hampshire and Tennessee limit their state income taxes to dividends and interest income only.

(Hat Tip on Question 1:  My friends at the Americans for Tax Reform blog)

If there’s one thing I’ve learned from blogging and receiving tons of email, we all have our “pet” electoral issues and hot buttons – and they vary widely from person to person.  For me, it’s national security first; the economy (and tax policy) second; and energy policy (a closely related) third.

On the subject of the economy, Jack Kemp has a good op-ed on the presidential candidates and their proposed tax plans (thanks to Mike Davis at the NV RLC for bringing it to my attention).  I strongly encourage voters to read the whole thing, but here are some key points (summarized in my own words):

Barack Obama says he supports a tax cut in the form of a $500 refundable income tax credit for all workers (except those in the top 5 percent of income earners, who will pay more taxes) “unless the economy remains weak.”  So…Obama does recognize that tax increases on the rich have a negative effect on the overall economy.  (But why does he think that matters only in “weak” economic times?)

Obama’s tax credit does not reduce marginal tax rates, so it won’t benefit the general economy because it provides no long term (additional) incentives for work, savings, investment or business expansion.  (People will get their $500 refund check, spend it, and that will be That.)

On the other hand, McCain wants to double the personal exemption for dependents from $3,500 to $7,000 for families regardless of income.  (For middle-class workers in the 25% tax bracket, the $3,500 exemption increase would reduce their tax liability by $875 for each child.  Families with three children are thus looking at $2,600+ in tax savings.)

And McCain proposes marginal tax rate reductions – which is great news in country that pays the second highest corporate tax rates in the entire industrialized world.  McCain wants to reduce the federal corporate tax rate from 35 percent to 25 percent – a boon for middle class workers in the form of new jobs, better pay, and a stronger dollar.

And all this will most likely raise rather than reduce tax revenues.  (Why?  Kemp cites a 2007 study by the Treasury Department which showed that Ireland — with a 12.5% corporate tax rate — raises just shy of 50 percent more revenue on a comparative basis than the U.S. does with a 35 percent rate!)

McCain would also keep the top capital gains tax rate and dividend tax at 15% which is needed in the stock world (stocks are now held by more than 2/3rds of all Americans).  McCain further wants to phase out the Alternative Minimum Tax (AMT) which burdens 25 million middle-class families with another $2,700 in taxes each year (on average).

Obama, by contrast, has proposed to raise marginal tax rates for almost every federal tax — the individual income tax, the capital gains tax, the dividends tax, the payroll tax, the death tax, etc. and he would increase corporate taxes where and when he could.

McCain’s plan is a good start, but I agree with Kemp:  we need to promote additional middle-class tax cuts through fundamental reform of our “confusing, contradictory and confiscatory tax code.”

Kemp outlines a proposal by Rep. Paul Ryan, R-Wis. to allow workers to choose a flatter tax system (which is also worth reading about, at the end of his op-ed).