Tuesday, July 28, 2015

US Rep rallies Democrats against Obama tax policy

NJ US Rep. John Adler is trying to out-Republican the Republicans

US Rep rallies Democrats against Obama tax policy

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US Rep. John Adler, D-NJ, locked in election combat with Republican ex-Eagles lineman Jon Runyan to represent Cherry Hill and most of Burlington County in Congress, says he's gotten 46 fellow Democrats to co-sign a letter to House Speaker Nancy Pelosi urging her to extend the temporary 15% tax rate for corporate stock dividends and other capital gains.

That's against President Obama, leader of Adler's party, who wants to restore the capital gains rate to 20%, as it was in the 1990s, to narrow the yawning budget deficit and get rich Americans to pay more of the cost of government - and allow dividends to be taxed like income, boosting rates for wealthy taxpayers to nearly 40%, if Congress doesn't act.

Adler called his a "sensible middle-ground position." He was joined by Verizon Corp. tax accountant Stacey Sprinkle and PSE&G chief financial officer Caroline Dorsa in arguing that lower taxes will mean more jobs. Said Adler: "We face a couple different crises in our country: unemployment... senior citizens and middle-class families struggling... rising deficits...

"We have to find a way to grow our private sector economy... I think we should focus particular attention on middle-class tax cuts," though what he actually offered were to keep taxes lower for the rich: "Capital gains (and) dividends are both taxes at 15%. I have 46 other Democratic members supporting an effort to keep capital gains at 15%...

"Folks who invest," Adler said, "are creating jobs that last... on which families can be sustained..." Though there's nothing in his proposal that says the savings have to be spent on jobs, as opposed, say, to Chinese real estate or Indian outsourcing stocks.

Adler mixed messages: If investors' dividend income were taxed, "some companies would forego paying dividends and shift to a growth strategy," which he says would hurt seniors. Though he also said we want businesses to grow so they'll create jobs...

Adler's corporate admirers saw no contradiction. "Thank you for your leadership in raising the profile for this issue," said Verizon's Sprinkle. She said Verizon used its dividend to attract equity investors and "to build out our infrastructure providing more broadband" Internet service.

I asked if that meant Verizon would reverse ceo Ivan Seidenberg's policy and resume expanding its FiOS broadband network if Pelosi agrees to Adler's plan. "I can't speak to the specifics of what our company's plans are," she said. (Later, Verizon spokesman Rich Young noted that Verizon continues to build and add new FiOS service in Philadelphia, New York, Washington and other markets.)

"Thank you so much for being out front on this issue. It's important... to our customers, who hold our stock and receive our dividends," PSE&G's Dorsa told Adler.

I asked if PSE&G had had any trouble borrowing money with our recent record low interest rates. No, Dorsa said, but the company has more funding options when its equity investors are happy because their taxes are low.

My colleague Cynthia Burton asked Adler how much his plan would boost the federal deficit. "$30 billion a year," he said. "Admittedly a lot. There has been talk of cutting spending..." Like what? As an "example," Adler cited grain fuel payments: "We spend a lot of money to subsidize ethanol - corn ethanol. That has not been good environmentally."

He also took aim at federal seat-belt promotion programs. "Most people know" how to use seatbelts, the congressman said.

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About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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