Wednesday, June 1, 2011

Democrats Want 62 Percent Tax Rate (!)

If the Democrats get their way on taxes, the top combined tax rate would soar to 62 percent, warns economist Stephen Moore of The Wall Street Journal.

A combination of higher income tax rates, phasing out of deductions, payroll taxes, state taxes, new healthcare taxes, and a 3 percent “millionaire’s tax” would add up fast, Moore says.

Essentially, the Democrat’s plan is more Jimmy Carter than Bill Clinton, he writes in an Op Ed for the newspaper.

“If the Democrats' millionaire surtax were to happen — and were added to other tax increases already enacted last year and other leading tax-hike ideas on the table this year — this could leave the U.S. with a combined federal and state top tax rate on earnings of 62 percent,” he figures.

“That's more than double the highest federal marginal rate of 28 percent when President Reagan left office in 1989. Welcome back to the 1970s.”

The problem, he says, is that the United States is trading places with once non-competitive rivals in the rest of the world. America’s largest trading partners in 1990 had individual income tax rates as high as 51 percent, compared to 33 percent in the United States. (read more)