NCPA - National Center for Policy Analysis


October 27, 2008

Barack Obama promises to return personal income taxes to Clinton-era levels, with the top rate rising from 35 percent to 39.6. His agenda -- call it "No Tax Hike Left Behind" -- boosts levies on capital gains (from 15 percent to 20), dividends (from 15 percent to 20 percent), and death (from 0 percent in 2010 to 45 percent on estates exceeding $7 million).

These increases among existing taxes would work like brass knuckles on a wobbly economy, says columnist Deroy Murdock.  Even worse, Obama also proposes brand-new taxes that further threaten to pulverize growth and jobs:

  • He proposes to impose a windfall profits tax on our oil companies that could cost $15 billion annually, based on 2007's profit levels; Obama has yet to explain how higher taxes encourage oil companies to increase supplies of badly needed energy.
  • He wants to tax "dirty energy," like coal and, to a lesser extent, natural gas," and offers few specifics beyond the fact that he taxes even clean-burning, carbon-friendly natural gas.
  • Employers that do not offer meaningful coverage or make a meaningful contribution to the cost of quality health coverage for their employees will be required to contribute a percentage of payroll toward the costs of the national plan, Obama's campaign Website states.
  • Obama has been coy about the penalty he would slap on employers who fail to furnish or finance "quality" health coverage; this would be yet another cost that companies struggle to cover.

Obama also would apply the 6.2 percent payroll tax to incomes above $250,000.  Many of these "rich" people are small-business owners who pay individual, not corporate, taxes.  Americans for Tax Reform calculates that households that earn more than $250,000 generate 67 percent of small-business profits. Taxing this country's 26 million small-business owners taxes those who launch companies, build products, deliver services, and employ 42 million Americans.

Source: Deroy Murdock, "The audacity of Obama's brand-new taxes; Read his lips: Brand-new taxes," Seattle Post-Intelligencer, October 23, 2008.

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