Archive for July 14th, 2009

“Will only raise taxes to the level they were under Clinton” … just kidding

July 14, 2009

Ken’s Take: During the campaign, Candidate Obama promised repeatedly: “not one dime of new taxes if you make under $250,000” and “for the top brackets, no higher than under President Clinton”.  The latter will fall by the wayside if the Rangel proposal is enacted.  Think the former is far behind ?

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Excerpted from WSJ, The Small Business Surtax, July 14, 2009

Every detail isn’t known, but late last week Ways and Means Chairman Charlie Rangel disclosed that his draft bill would impose a “surtax” on individuals with adjusted gross income of more than $280,000 a year.

This would hit job creators especially hard because more than six of every 10 who earn that much are small business owners, operators or investors, according to a 2007 Treasury study.

That study also found that almost half of the income taxed at this highest rate is small business income from the more than 500,000 sole proprietorships and subchapter S corporations whose owners pay the individual rate.

In addition, many more smaller business owners with lower profits would be hit by the Rangel plan’s payroll tax surcharge. That surcharge would apply to all firms with 25 or more workers that don’t offer health insurance to their employees, and it would amount to an astonishing eight percentage point fee above the current 15% payroll levy.

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Full article:
http://online.wsj.com/article/SB124753106668435899.html

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Posted in Obama Administration, Taxes | 1 Comment »

Summer read: Catastrophe by Dick Morris

July 14, 2009

Catastrophe, Dick Morris, HarperCollins, 2009

Morris is a former Clinton adviser turned conservative pundit. For each of the past couple years, Morris has penned a bestseller castigating the direction and tactics of liberals. Catastrophe – a pretty well researched and documented book – continues in that tradition.

Among Morris’s targets in this book are:

  1. The way that team Obama is using the economic crisis to push through a social agenda.
  2. The division of America into a minority (i.e. out voted) taxpaying class, and a majority tax taking class.
  3. The ineffectiveness of the Keynesian-inspired, pork-laden stimulus package.
  4. The prospects for runaway inflation when the economy recovers and the country is left with a bloated national debt.
  5. The reluctance of businesses to invest the time that they are being vilified, that pure craps are changing the rules with no notice, and when the federal government is intervening in private businesses — picking winners and losers, imposing punitive taxes and upending bankruptcy law.
  6. The failure of the bank bailout programs – TARP and TALF – to increase the supply of credit to businesses.
  7. The failure of the various mortgage plans to stem the tide of foreclosures.
  8. The looming fire-aim-ready health care program that is being pushed through Congress — that increases the demand for health services by covering more people with health insurance, but does nothing to increase the supply of services, i.e. the number of doctors and care facilities.
  9. Initiatives to boost Democratic voting rolls, including: amnesty for illegals, expansion of unions (via card check), and “management” of the 2010 census.
  10. A weakened stance on terror, evidenced by a broadening of terror suspects’ rights, the closing of Gitmo, and a general softening of both rhetoric and defense capabilities.
  11. A diminution of support for Israel.
  12. Congressional cronyism, quid pro quo, and pay to play.

At length, Morris documents Pres. Obama’s apparent strategy of political control:

  1. Build on his rock solid support among blacks
  2. Expand the Hispanic population by amnesty and loose immigration laws, and by using expanded health care benefits as a “carrot” to attract even more Hispanic immigrants.
  3. Expand union coverage via card check and UAW-like sweetheart deals including, perhaps, exclusion from any  taxes that may be imposed on employer-provided health care insurance.
  4. “Cook” the 2010 census to overstate his solid constituencies.

For regular news readers and news watchers, there is little new in Morris’s book. But, there are plenty of facts, specific examples, and references.

Catastrophe is a quick read that – fr the most part – is worth the time for conservatives wanting ammunition for the next cocktail party.

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Posted in Book Summaries, Obama - Promises Made & Kept | 2 Comments »

Penny Mac … heard of it?

July 14, 2009

This was a new one to me…

In the book Catastrophe, Dick Morris includes a chapter on PennyMac — a joint venture set up by former high-level executives at Countrywide Financial. The name stands for Penny Mortgages After Countrywide.

Here’s the scheme:

Penny Mac buys distressed mortgages from failing banks at the lowest possible prices, works out affordable deals with homeowners, and then re-bundles and re-sells the now “performing”.loans.

For example, according to Morris, Penny Mac recently bought $558 million of home mortgages from the FDIC, which acquired the notes after the collapse of the First National Bank of Nevada. PennyMac paid only $42.2 million, averaging only $.30 to $.50 on the dollar. PennyMac keeps $.20 on every dollar that it initially recovers, with an increase to $.40 down the line.

Think about it. Countrywide executives made bad loans, sold them in packages to investors,  and then, they buy them back as distressed loans at a deep discount, restructure the terms — since they have plenty of spread to play with — and then sell the loans again, at a profit.

Makes you scratch your head, doesn’t it?

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Posted in Financial Crisis, Housing - Mortgages | 1 Comment »