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Kudlow’s Money Politics

Larry Kudlow’s daily web log of matters political and financial.

Two From the WSJ



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Two very good, very interesting articles in the Wall Street Journal today’”one’s on abolishing state income taxes; the other one, an op-ed written by Daniel Henninger, is about talking ourselves into defeat in Iraq.

Both hit the nail on the head…

Rich States, Poor States

If you’re searching for the next big thing in American politics, it’s wise to keep an eye on the states. Here’s one possibility: the abolition of state income taxes.

In Georgia, Missouri and South Carolina, Governors and state legislatures are drafting serious proposals to repeal their income taxes to promote economic development. St. Louis, one of America’s most distressed cities, may overturn its wage/income tax as a way to spur urban revival. And in Michigan, the legislature is in the last stages of phasing out its hated business income tax — the most onerous in the land. “States are now in a ferocious competition to attract jobs and businesses,” says economist Arthur Laffer, who is advising several Governors and legislators on the issue, “and one of the best ways to win this race is to abolish the state income tax.”…


Talking Ourselves Into Defeat

…On the “Charlie Rose Show” this month, former Army vice chief of staff Gen. Jack Keane, who supports the counterinsurgency plan being undertaken by Gen. David Petraeus, said in exasperation: “My God, this is the United States. We are the world’s No. 1 superpower. This isn’t about arrogance. This is about capability and applying ourselves to a problem that is at its essence a human problem.”

At our current juncture, Gen. Keane’s words probably rub many the wrong way. But there’s a Cassandra-like warning implicit in them. The mood of mass resignation spreading through the body politic is toxic. It is uncharacteristic of Americans under stress. Some might call it realism, but it looks closer to the fatalism of elderly Europe, overwhelmed and exhausted by its burdens, than to the American tradition….


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