"The Power To Tax Is The Power To Destroy"

Gary Bauer, Contributing Author: It is a well-regarded economic principle that if you want more of something you subsidize it to promote it, and if you want less of something you tax it to penalize it. Today's Wall Street Journal has crunched the numbers on Obama's latest budget and it seems that Obama's tax increases, particularly on dividends, are intended to destroy wealth creation in America. Consider this excerpt from the Journal's editorial:
"Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8% -- nearly three times today's 15% rate.

"Keep in mind that dividends are paid to shareholders only after the corporation pays taxes on its profits. So assuming a maximum 35% corporate tax rate and a 44.8% dividend tax, the total tax on corporate earnings passed through as dividends would be 64.1%."
We've been down this road before. Higher capital gains and dividend taxes yield lower revenues because they discourage and punish investment. Lower tax rates yield greater revenues because they encourage investment. It is playing out right now in England, where a higher tax on the "rich" has generated far less revenue than anticipated.

It's not a complicated concept to grasp -- unless you are a committed socialist who ignores sound economic policy in favor of abstract concepts like "fairness" or "spreading the wealth around." (Who could that be?)

But even worse, this massive new tax hike would disproportionally impact seniors and retirees, many of whom live off of investment income. And because interest rates are so low right now, many have been forced to invest in dividend-paying stocks. According to IRS data "Almost three of four dividend payments go to those over the age of 55, and more than half go to those older than 65."

As the Journal concludes, Obama's wealth-destroying, job-killing policies to soak the rich "will drench almost all American families." Obama's socialism will destroy this country, just as similar policies have brought Greece and much of Europe to the brink of bankruptcy and worse.
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Gary Bauer is is a conservative family values advocate and serves as president of American Values and chairman of the Campaign for Working Families. Bauer was a former Republican presidential candidate and served as President Ronald Reagan’s domestic policy adviser

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