Problems abound, but at least Bush and Republicans are doing more to answer them than are Kerry and the Democrats. The senator contends he's not really for tax hikes because the increases would only apply to the top 2 percent. That's pure class warfare. The Kerry-Edwards Web site states: "The measure of a strong economy is a growing middle class," and in Kerry's America, the "opportunities for our middle-class are shrinking." That is just not true. As economist Bruce Bartlett points out, according to new census data, "The ranks of the poor and middle class have shrunk for one reason only - more of them are rich!"
So what is Kerry's solution? Raise taxes, end corporate tax loopholes and end bilateral free-trade agreements. The Kerry-Edwards detailed international tax reform plan states, "John Kerry does not believe that we should force a U.S. company that chooses to create jobs in the United States to pay higher taxes and suffer a competitive disadvantage with a company that chooses to move jobs to a tax haven and keep profits there permanently." His solution? Eliminating the tax deferral for foreign-earned income as they earn it rather than being allowed to defer taxes.
In other words, Kerry would create incentives for companies to take not just the jobs overseas, but to move the entire operation overseas, as well. The Kerry campaign misses the obvious solution. As is written in their own report, a U.S.-based firm can "expect to pay an average tax rate of 31 percent. When this company invests abroad, it faces an average tax rate of 21 percent." The same Kerry report acknowledges that 80 percent of U.S. manufacturing assets abroad are based in countries with tax rates lower than the rate in the United States.
It seems obvious to most people that if U.S. tax rates are so high and uncompetitive that firms are being encouraged - driven - overseas, the solution is not to punish the firms, but to reduce the tax rates to more competitive levels. Cutting the tax rates by 5 percent, as Kerry wants to do, is simply not going to make America more competitive.
At the Democratic National Convention, Kerry said he would not privatize Social Security. He also said he would not cut benefits. Therefore, the only thing left for Kerry to do is raise taxes.
After Bush announced his support for personal retirement accounts, Kerry countered that closing the budget deficit should be the first step toward fixing Social Security. What the senator didn't say is that Social Security is projected to run surpluses for the next 13 years or so, which could help finance allowing workers to take advantage of the marvel of compound interest in personal retirement accounts. He also didn't level with the American people about his plans to continue raiding Social Security surpluses of more than $1 trillion to pay for enormous new spending.
So far the Democratic agenda has been crippled by what Miller aptly described as a combination of Walter Mondale's tax increases, Herbert Hoover's tariff increases and George McGovern's foreign policy, not to mention they have no policy when it comes to Social Security reform. Indeed, by supporting tax increases, $2 trillion in new spending and having no plan whatsoever regarding Social Security, the Kerry-Edwards ticket offers no coherent agenda and shows no faith in the electorate, no faith in free enterprise, no faith in the resourcefulness of the American people and no faith in the U.S. economy. Democrats need to stop ranting about Benedict Arnold CEOs and recognize they are turning into the "economic girlie-men" Schwarzenegger warned about.