NCPA - National Center for Policy Analysis


April 25, 2008

Raising tax rates at a time when the economy needs all the stimulus it can get is a very bad idea, says Donald Lambro.  Yet Hillary Clinton would raise the top 35 percent marginal tax rate on incomes over $250,000 "to the rates they were paying in the 1990s" under President Clinton, which would lift them to a confiscatory 40 percent. 

It isn't just wealthier Americans who pay the top income tax rate, but also 25.8 million small businesses, many of them family-run operations, who create about 75 percent of the jobs, according to the Small Business Administration.

Clinton and Barack Obama are focused on finding more tax revenue from the rich to pay for tax cuts -- in Obama's case, for people who make less than $75,000.

For example:

  • He would pay for his middle class tax cuts in part by taxing the 100 million-member investor class, 50 percent of whom are the middle class.
  • He would raise the 15 percent capital gains tax rate, possibly to 25 percent.
  • It is income redistribution by the government, pure and simple, says Lambro.

They claim they do not want to raise taxes on anyone up to $250,000, but more and more ordinary Americans own stocks through mutual funds, IRAs and 401(k) plans at work. A higher capital gains tax on stock reduces the value of the stock, said Grover Norquist, president of Americans for Tax Reform.

While Obama promises in one breath he would not tax anyone below $250,000, with the next breath he says he would raise the $97,000 cap on the Social Security payroll tax to extract money from "millionaires and billionaires" who don't have to pay beyond that rate.  And as Charles Gibson reminded Obama during the latest democratic debate: That's a tax on people under $250,000 and there's a heck of a lot of people between $97,000 and $250,000.

Source: Donald Lambro, "Beware the Tax-Raisers," Washington Times, April 24, 2008.


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