Obama’s un­fair tax hikes

Amer­i­cans aren’t en­list­ing for the Democrats’ class war

The Washington Times Daily - - Opinion -

Pres­i­dent Obama says wealthy Amer­i­cans need to pay sig­nif­i­cantly higher taxes. A new poll shows most Amer­i­cans think the rich should get a tax cut.

Mr. Obama has made class war­fare a cen­tral fea­ture of his re-elec­tion ef­fort. His pro­posed 2013 bud­get in­cludes a num­ber of tax in­creases aimed at higher in­come brack­ets, in­clud­ing rais­ing taxes on fam­ily in­comes above $250,000 and rais­ing the top mar­ginal in­di­vid­ual tax rate to 39.6 per­cent. In his speeches, Mr. Obama fre­quently in­veighs against the rich and re­peat­edly calls for “fair­ness” in the tax code.

But what is fair? A new sur­vey sug­gests Mr. Obama’s pro­posed tax rates are un­fairly high. Ac­cord­ing to polling re­sults pub­lished Mon­day in the Hill news­pa­per, 75 per­cent of likely vot­ers said a fair tax rate for the high­est in­come group would be 30 per­cent or less. Just 4 per­cent agreed with Mr. Obama that it would be fair to take 40 per­cent of in­come from the bet­ter-off. When it comes down to solid num­bers in­stead of windy rhetoric, the Amer­i­can peo­ple and the White House have a very dif­fer­ent sense of right and wrong.

Mr. Obama labors un­der the com­mon lib­eral mis­ap­pre­hen­sion that tax­ing wealth cre­ates more of it. His an­swer to the hun­dreds of bil­lions of dol­lars be­ing paid out in div­i­dends is to nearly triple the div­i­dend tax. The prob­lem is that the re­cent mas­sive growth in div­i­dend in­come be­gan dur­ing the Ge­orge W. Bush ad­min­is­tra­tion af­ter that same tax was cut sig­nif­i­cantly. Rais­ing the div­i­dend tax to puni­tive lev­els — and tack­ing on a 3.8 per­cent Oba­macare sur­charge — will not aug­ment gov­ern­ment rev­enue or in­crease the taxes paid by the rich. Peo­ple will sim­ply find bet­ter ways to in­vest their money.

The same goes for the pro­posed “Buf­fett rule.” Im­pos­ing a min­i­mum tax rate on those mak­ing a mil­lion dol­lars a year will warp in­cen­tives and en­cour­age those in top in­come brack­ets to seek other ways to se­cure their earn­ings. Con­sid­er­ing that the top 10 per­cent of earn­ers al­ready pay more than 70 per­cent of all in­come taxes, it is hard to ar­gue that rais­ing the take from them is fairer.

The poll showed that most Amer­i­cans want a cut in fed­eral cor­po­rate taxes. Seventy-three per­cent think the cur­rent top rate of 35 per­cent is too high. Mr. Obama has un­char­ac­ter­is­ti­cally pro­posed a cut in the rate to 28 per­cent, while Repub­li­cans have backed a 25 per­cent rate. In an ex­clu­sive in­ter­view with The Washington Times’ ed­i­to­rial board, Florida Gov. Rick Scott ex­tolled the virtues of elim­i­nat­ing cor­po­rate taxes al­to­gether. Mr. Scott has en­acted poli­cies that have taken half of Florida busi­nesses off the tax rolls and hopes even­tu­ally to tax none of them. “You put more money in busi­ness peo­ple’s hands,” he rea­sons, “they’ll hire peo­ple, they’ll do more mar­ket­ing, they’ll be more com­pet­i­tive.”

When money flows through pro­duc­tive chan­nels rather than into waste­ful gov­ern­ment pro­grams, the re­sult is higher eco­nomic growth, more jobs and ul­ti­mately higher rev­enues at lower tax rates. Mr. Obama should spend less time fret­ting about what he thinks is fair and fo­cus more on tax cuts that will get the econ­omy out of its debt-rid­den ditch.

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