A friend sent me a few recent articles about one important issue I haven’t addressed enough—that is, Barack Obama’s tax plan. Barack is audacious when it comes to his plans for new spending and higher taxes. Oh, and don’t be fooled by any talk of a “middle class tax cut.” We heard this old song before during Bill Clinton’s campaign in 1992.
Once Bill got into office he was “shocked shocked” to see how bad the nation’s finances were and decided against fulfilling that promise. Should Barack win access to the Oval Office, as we’ve noted, he’s going to find a country in much worse fiscal shape. A few brave liberal interest groups and think tanks are admitting as much.
Back in June the Heritage Foundation posted an article titled, “European Levels of Taxation: Barack Obama’s Tax Plan.” Here are a few highlights (with emphasis added):
Presidential hopeful Senator Barack Obama (D-Ill.) has unveiled his economic plan of raising taxes on the successful. His plan would boost the top marginal rate to well over 55 percent-before the inclusion of state and local taxes-resulting in many individuals seeing their marginal tax rate double.
The consequences of this policy would be a return to the bad old days of tax avoidance, with taxpayers disguising personal income as business income or capital gains and the migration of capital from the United States to abroad.
Among the more prominent elements of his tax proposal, Senator Obama would end the Bush tax cuts and allow the top two tax rates to return to 36 and 39.6 percent. He also would allow personal exemptions and deductions to be phased out for those with income over $250,000. The real kicker, though, is that Senator Obama would end the Social Security payroll tax cap for those over $250,000 in earnings. (The cap is currently set at $102,000.) These individuals will then face a tax rate of 15.65 percent from payroll taxes and the top income tax rate of 39.6 percent for a combined top rate of over 56 percent on each additional dollar earned.
High-income individuals will be forced to pay even more if they live in cities or states with high taxes such as New York City, California, or Maryland. These unlucky people would pay over two-thirds of each new dollar in earnings to the federal government.
The article explains that Obama’s tax rate would the be the highest since President Jimmy Carter. We know from history that tax shelters and tax avoidance strategies become very common, and many of them discourage investment and business growth.
That might be change some young Obama supporters can believe in, but for those of us old enough to remember the Carter years, we believe that’s exactly the kind of change we’d rather not see again.