On June 14, President Obama announced his economic plan to finally bring economic recovery and growth to the U.S. in a much ballyhooed address in Cleveland. He threw down the gauntlet to Mitt Romney on the issue, saying "more than anything else, this election presents a choice between two fundamentally different visions of how to create strong sustained growth; how to pay down our long term debt; and most of all, how to generate good, middle-class jobs...."
Truer words have never been spoken by the President. So let's examine the two fundamentally different visions and see which can produce strong sustained growth, pay down our long term debt, and generate good, middle class jobs.
Under President Obama's plan, on January 1 of next year the top tax rates of virtually every major federal tax will increase, as already enacted under current law. That is because the tax increases of Obamacare would go into effect, and the Bush tax cuts would expire, which Obama refuses to renew for singles making over $200,000 a year, and couples making over $250,000. The English translation of that target for the tax increases is the nation's small businesses, job creators and investors.
As a result, with the Bush tax cuts just expiring for these targeted taxpayers, the top 2 income tax rates would jump by nearly 20%, the capital gains tax would soar by nearly 60%, the tax on dividends would nearly triple, the Medicare payroll tax would skyrocket by 62% for the above disfavored taxpayers, and the top death tax rate would rise from the grave to 55%. That is all on top of the highest corporate tax rate in the industrialized world at nearly 40%; counting the federal corporate rate of 35% and state corporate rates on average. But under Obama, there is no relief in sight. Instead, Obama is pushing still more tax increases. Under his proposed Buffett rule, the capital gains tax rate would increase by 100%, and would be the fourth highest in the industrialized world. Many OECD countries, in fact, impose no capital gains tax because it is just another layer of taxation on capital income on top of the corporate and individual income taxes. All of this would leave American businesses uncompetitive in the global economy.
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