Get Business Tax Cuts Out of the Stimulus Plan It is heartening that the new Congress is tackling the economic crisis with the urgency it deserves. The economy is slowing dramatically, and 15 million Americans are now unemployed or underemployed. The numbers worsen every month, and if state and local governments meet their budget shortfalls by cutting services and laying off employees, the pace of job losses will accelerate. Without immediate and very sizeable intervention, unemployment could top10 percent next year. Most of the stimulus plan proposed by the incoming Obama administration is exactly what is needed, including aid to states, an emphasis on education -- including early childhood -- and investment in the nation's infrastructure -- the backbone of a productive economy. The United States has allowed its infrastructure to deteriorate to the point that dikes and bridges fail catastrophically, our drinking water suffers, our mass transit systems badly lag the rest of the world, and our broadband connectivity is slower and reaches a smaller share of our citizens than equivalent systems in Korea, Japan and other allies and competitors. The condition of many school buildings -- some built in the 19th century -- is deplorable and hurts the performance of teachers and students. The money in this rescue package is a small down payment on what is needed to give the U.S. the world class infrastructure we need. However, the tax portions of the package are a mixed bag. Middle class taxpayers will benefit from the AMT fix and the Make Work Pay tax credit, but the business tax cuts are mostly a waste of resources that could be much better spent elsewhere. The job creation potential of a one-time $3,000 tax credit for hiring new workers is questionable, at best, as are the stimulus effects of accelerated depreciation and reducing past income tax liabilities by taking into account recent business losses. It will be particularly hard to watch the banks and construction companies that made billions during the housing bubble get a windfall they don't deserve. It is instructive to compare the negligible job creation potential of these tax cuts with the hotly contested but far cheaper effort to rescue the domestic auto companies. If saving the Big 3 from bankruptcy would cost $100 billion -- the mid-range of estimates by Mark Zandi of economy.com -- but prevent the loss of 1 million to 3 million jobs, its "bang-for-the-buck" would equal or exceed even the best parts of the stimulus proposal, let alone the wasteful business tax cuts. There are many causes of this downturn, including our astronomical trade deficit - the result of two decades of one-sided trade agreements and failure to respond to the unfair practices of other nations - which have not been addressed. The reckless greed of so many financial institutions and speculators is a major cause of our current problems, and the damage done to millions of homeowners remains largely unaddressed. The dwindling strength of unions has contributed to wage suppression, the loss of fringe benefits, and the end of retirement security for the average American. The ultimate health of our economy cannot be assured without addressing these problems and the dangerous growth in inequality associated with them. We need an economy that creates broadly shared prosperity, not just for executives and professionals, but for every segment of society

Presenting @ Mason Entrepreneurship Research Conference 3/27

Friday, March 27, 2009, is the Mason Entrepreneurship Research Conference. presented a few years back on Social Capital and Business Plan Contests and will be presenting this week on The Frontier in US History, The Modern Campus, and Entrepreneurship. Tim Berry is the key note speaker. Here is some background on the conference and its mission. Interestingly, it is a joint venture between the School of Public Policy and the School of Management.

Windfall tax not applicable to private players: finance ministry (Lead, Superseding earlier story)

New Delhi, Jan 12 (IANS) The ministry of finance Monday clarified that there was never any proposal to apply windfall tax to private oil producers in the country. Special secretary of the ministry Rita Menon said at a session in Petrotech 2009 that the windfall tax had been a proposal to ‘formalise’ the discounts offered by state-run oil producers as part of the subsidy-sharing mechanism. It had been also mentioned in the B.K. Chaturvedi committee report on the oil sector, which was yet to be accepted by the government. As per the proposal, the government would consider taxing a part of the earning if the oil price went above $75 per barrel. The proposal had gained ground when the oil producers, ONGC and Oil India Ltd. earned profits due to the high prices that reached a peak of $147 last June, which have since gone down drastically to below $39 Monday. Menon added that it was only applicable to blocks which had been allotted on negotiation or nomination basis. Cairn Energy’s Rahul Dhir said that there had been a lot of confusion on the issue of applicability of Windfall tax on the private sector, which had a bad effect on India’s image as destination for investment in the oil exploration and production industry. Menon said the petroleum ministry could pose a question to the finance ministry to clarify this position in the forthcoming budget.

Microsoft To Finance Yahoo Bid? Apparently Not

TechCrunch earlier today reported that Microsoft (MSFT) has been approached about financing a group of Silicon Valley executives looking to launch a bid for Yahoo (YHOO). But Bloomberg is reporting that, according a person familiar with Microsoft’s plans, the TechCrunch story is not correct. The TechCurnch report said that the investor group would make a bid at about a 20% premium to Yahoo’s current stock price, for a total acquisition price of about $20 billion. Microsoft would provide financing in the form of debt, the story says, and would also buy Yahoo’s search business. The TechCrunch story says that the deal “is being characterized at this stage as a proposal to Microsoft,†and “absolutely hinges on their involvement.†According to Bloomberg, they’re not interested. Yahoo today fell 29 cents, or 2.2%, to $12.71.