Paralysis By Taxation

IBD Editorials ^ | September 3, 2010 | Investors Business Daily staff

[Kaslin]

Recession: The Democrats' politicized housing and mortgage policies pushed our economy into its worst downturn since the Great Depression. So, of course, it's a perfect time for the biggest tax increase in history.

Why is the economy still paralyzed after the president's much-touted "Recovery Summer"? It may be that private investment, too, has been immobilized.

With unemployment now up to 9.6%, Americans fear that the economy won't get moving again anytime soon. As a new report from Americans for Tax Reform shows, that fear is completely rational. The report outlines the impact of the largest-ever tax hike that's coming in just 120 days as the Bush tax cuts expire.

On New Year's Day, "The top income tax rate will rise from 35% to 39.6% (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10% to 15%. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates."

Of crucial importance to entrepreneurship and job creation, the top capital gains tax rate rises from 15% to 20% next year, while the top rate for taxation of dividends rises from 15% to 39.6%.

And, "These rates will rise another 3.8% in 2013," ATR points out.

Then there are the 20 new or increased taxes dictated by the ObamaCare government takeover of the health care system. All told, Americans' taxes will go up by $3.1 trillion, as Heartland Institute economist John Nothdurft noted in IBD last week.

[benewton]

“Maybe playing with that map of fictional jobs on their computer can give unemployed breadwinners something to do.”

This is probably good advise, since there simply aren’t any jobs to be had.

But “smart” comments aside, there’s still the mortgage, and, unlike the government, I have to pay mine or else.

[allmost]

I was trying to explain to a most dear family member that she needs to brush up on her 1099’s.

[Flintlock]

What’s all this 9.6% BS?
Didn’t they change the rules years ago to MINIMIZE the figure?
Under the OLD (George I) system, unemployment would be more like 14-15%.

[Thom Pain]

"The lowest rate will rise from 10% to 15%."

The lowest is and will continue to be zero. No Federal tax paid by 50%

Guaranteed votes for Dems from fully half the population.

[Kaslin]

The official unemployment rate is 9.6 percent. The real unemployment rate much higher, like 16.7% They don't count the ones that gave up looking for jobs, and the under employed

[silverleaf]

anyone in the “middle class” (which is anyone not on free lunch and maybe even a few who are ) who isn’t adjusting life to live on less income and figuring out how to provide for emergencies and for their future without being able to save as much- if anything - is in for a rude shock in the next 6 months.

[nascarnation]

Yes and there is an ever-growing number who actually get positive cash flow from the federal tax system with Earned Income Credits.