SotU: 3 New Things You Were Probably Curious About

Hey everybody I have been doing the old work and sleep(and nothing else) thing lately, but I thought I would pop in for some specific thoughts on the State of the Union.

To get it out of the way the Obama speech wasn’t good at all. He repackaged all of his old initiatives using new themes, symbolism, and language. And he gave the proverbial f’ you to the issue that Americans cared about most(spending). Okay we all appear to be in agreement on all of that.

My post is instead about 3 new developments: the corporate tax cuts/simplifying(revenue neutral supposedly), the government re-org, and tort reform.

Tort Reform: I know that Obama has brushed on it in the past very briefly, but you may have been wondering why he would bring it up when Republicans are very likely to put that bill on his desk. Well 2 reasons.

1) Because he wants the GOP to redirect the focus on a ‘fix it’ bill instead of a straight repeal. Bringing it up may actually entice some to go down that road.

2) Because he knows that another thing that can kill Obamacare is sky rocketing premiums and tort reform may make the premium increases less severe in a few years.

Solution is to wait until Obamacare gets repealed or sure to be repealed before passing such legislation.

The Government Re-organization: Basically he thinks the GOP is stupid enough to go for spending cuts by way of efficiency and removing redundancy in a re-org in exchange for more vague clauses in the legislation giving the agencies more authority. If he is thinking that he can go to he!!. That fight is going to be how vague bill language is and the presence of any new clauses for the bureaucracy to take advantage of.

Solution is for the house to move first and pass bills that narrowly re-org while reducing the powers of the agencies and force him into a situation where he has to decide whether or not he is going to veto something he said he wanted.

The Corporate tax cut/simplification: Many don’t know what Obama is referring to when he is talking about “corporate tax loop holes”. He has brought it up before and he is only talking about 1 thing and 1 thing only. Its called a unitary tax(google it). And so he is saying that he will take a corporate tax reduction in exchange for it to be simplified and placed on worldwide profits(or at least move in that direction). Frankly again he can go to he!!. No international company would ever want to headquarter in the United States with a unitary tax. You pass it and every penny of international tax revenue dries up. Also it is very immoral. How is it right that when a foreign subsidiary(a foreign legal person) of a US company makes money in (lets say) Hong Kong that they are left at the disadvantage of paying maybe double the corporate tax rate(mostly to the US) of their competitors. The holding company will just move.

Solution is again to pass a narrow bill on 100% expensing, no credits, and a reduced corporate tax rate(without the unitary tax) and push Obama in to the position where he has to decide whether or not he is going to veto something he appears to have asked for.