Whoops. Looks Like Bush.
Jude Wanniski
November 2/3, 2004


From:Jude Wanniski jwanniski@polyconomics.com
To: James K. Galbraith <galbraith@* * * * *.edu>
Re: Whoops. Looks like Bush.
10:06 pm 11/3/04

I tried my best to tell the Kerry folk that they should forget about raising tax rates on capital... and should, if they wished, raise rates on income but at much higher threshholds. 40% at $1 million taxable income. Clinton cut the capgains tax on primary homes below $500K, a wonderful supply-side tax cut, but never got credit for it. The electorate understands that if you put extraordinary tax burdens on the few individuals among us all who have sensational ideas on how to lift all our living standards, you are doing a stupid thing. The system should be arranged so that capital flows easily to those who have the greatest promise in that regard.


At 08:44 PM 11/3/2004, you wrote:

I agree that division at $200,000 was wrong.  The point should be to identify what types of income are taxed more heavily and which less so.  Howard Dean was much more effective on this, tying property and sales tax increases to the income tax cuts, even though he argued for repealing all the Bush cuts. Thanks for the plug today, though I was a bit numb. I'll send you my piece in Salon, written last night.  J

10:53 am 11/3/2004

Looks like I will not have to talk Gene Sperling into a different posture on China's yuan. Read Nick Kristof in this morning's Times. He does not understand why voters support an economic policy that does not tax the rich. JW

At 09:38 PM 11/2/2004, you wrote:

You are right on China and I have been saying the same thing to the Kerry staff. A revaluation of the renmimbi would not affect the U.S. current account, but merely redistribute US  trade to other LDCs. It would hurt China without having much affect on us  An additional problem is that if China were actually to liberalize its capital account, the renmimbi would probably fall, not rise, since Chinese wealth holders would diversify into dollars.  Jamie

On Tue, 02 Nov 2004 18:26:08 -0500, Jude Wanniski <jwanniski@polyconomics.com> wrote:

I was on Tom Keene's show yesterday, promoting Kerry, and mentioned his interview of you some weeks back. I talked about common ground between supply siders and Keynesians and how Kerry would have to work with a GOP Congress (without Daschle it looks like). I've had an exchange with Gene Sperling that I hope will lead to a similar relationship, where we can at least try to find things to agree upon. One problem that will surface is his insistence that China is manipulating its currency by linking it to the dollar. Have you written about this? I've been advising China (as has Mundell) to stick with the dollar through thick and thin because we are its most reliable trading partner. Remember Mundell's paper on "Optimum Currency Areas"? Please give me your thoughts on this before I raise the issue with the Kerry folks and Sperling.