Thursday, May 10, 2012

Newt Gingrich's Real Change 5

In Newt Gingrich's Real Change, I read "Chapter Ten: An Immigration Policy That Makes Sense", and "Chapter Eleven: Real Change to Achieve Enduring Prosperity for American Workers".

1.  In Chapter 10, I learned more about the 1986 Simpson-Mazzoli immigration bill.  Many on the Left point to this bill to argue that Ronald Reagan would be out of place in today's anti-immigrant Republican Party, for this bill (which Reagan supported) granted amnesty to illegal immigrants.  But that's only part of the story.  Yes, the bill granted one-time amnesty, but it also proposed border control and an employer verification program to ensure that illegal immigrants were not hired.  The problem with the law, Newt contends, is that the government did not follow through on border control and employer verification.

I found something that Newt says on page 125 to be a bit odd: "The elites on the left oppose border control, oppose English as the official government language, oppose expanding legal immigration, and want to find a way to allow everyone here illegally to stay, all while prohibiting illegal immigration in the future."  What Newt characterizes as the leftist elite's position appears rather muddled.  Either that's because there are liberals who have a muddled view on immigration, or because Newt is characterizing positions other than his own as the leftist position.  Newt is for securing the borders, legal immigration, making English the official language, and having foreigners get visas to work in the U.S.  Some of that is actually to the left of what some right-wingers think about immigration----for there are right-wingers who want a moratorium on legal immigration and oppose a guest-worker program because it places foreigners in competition with Americans for jobs. 

2.  Chapter 11 is about tax policy.  Newt supports abolishing the capital gains tax on investments because doing so will encourage productivity and create jobs, plus capital gains tax cuts have led to an increase in revenue.  He wants for Americans to be able to choose between the current tax system and a sort of flat tax.  This flat tax is not exactly regressive, however, for it exempts $13, 200 for each adult and has a "$4,000 exemption for each child or dependent" (page 142).  Newt states that "This would mean no federal income tax on the first $46,165 in income for a family of four."

I'm not sure how the capital gains tax cut encourages productivity, and I'm receptive to learning about this issue.  But, if the capital gains tax cut increases revenue, I guess I'm open to it.  Some have disputed that tax cuts increase revenue.  They may say that revenue increased in the 90's because the economy was good at that time, due to the information revolution.  Or they may attribute the increase in revenue under Reagan to Reagan's tax increases.  Or they may point out that the Bush tax cuts resulted in declining revenues over some years, and, when revenue numerically increased, it was a smaller proportion of GDP than revenue was before the Bush tax cuts. 
Another point that Newt makes in this chapter is that companies are leaving the U.S. to go to Europe (i.e., London) because of litigation and high corporate taxes in the U.S.  Does that demonstrate that European socialism does not hamper the economy?

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