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What effect do you think those much higher tax rates will have upon stock prices beginning in 2013? Especially since the long-term capital gains tax rate will be so much less? Here's what history says, but remember, it ends badly, except perhaps for the insiders.... A quick story in two snapshots. First, the expected future trailing year dividends for the S&P 500 through the fourth quarter of 2012: Second, the tax rates that apply to dividend income from 2003 through 2012, and the expected tax rates that will apply for 2013 onward, given current law in the U.S.:   Speaking...

...First Wave: Expiration of 2001 and 2003 Tax Relief In 2001 and 2003, the GOP Congress enacted several tax cuts for small business owners, families, and investors (later re-upped by President Obama and Democrat Congress in 2010). The following tax hikes will occur on January 1, 2013: Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which the majority of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions...

The imminent failure of the congressional deficit “supercommittee,” which had a chance to settle the nation’s tax policy for the next decade, would thrust the much-contested Bush tax cuts into the forefront of next year’s presidential campaign. Those tax changes have repeatedly provoked fiery partisan debate since they were enacted during President George W. Bush’s first term. Now, with the cuts due to expire at the end of 2012 and their fate left unresolved by the supercommittee, both parties are already positioning themselves to exploit the issue for maximum electoral advantage. President Obama, who campaigned on repealing the breaks for...

With the Washington Post reporting – and Senator Jon Kyl confirming – that there’s a general sense of malaise surrounding budget deal negotiations, the end may be in sight. Unfortunately, the light at the end of the tunnel is looking more and more like it’s the headlight of an oncoming train. The congressional committee tasked with reducing the federal deficit is poised to admit defeat as soon as Monday, and its unfinished business will set up a year-end battle over emergency jobless benefits and an expiring payroll tax holiday. Those provisions are among a host of measures set to lapse...

Now comes an opportunity for House and Senate Republicans to push a strong Balanced Budget Amendment (BBA), but not only have House Republicans tossed an interception on the BBA, but they also appear to have preemptively surrendered a touchdown to the liberals on tax policy as part of the Super Committee negotiations. If conservatives want to win, they should take the BBA and the $1.2 trillion in cuts mandated by the Super Committee directly to the American people, who tend to reward politicians who fight tax hikes and push for deep cuts to the federal government.  Yet they seem intent...

Whenever congress gets stuck, they start complaining and pass the buck. Or kick the can down the road: With a little over a week left to reach a deal, members of the Congressional deficit reduction panel are looking for an escape hatch that would let them strike an accord on revenue levels but delay until next year tough decisions about exactly how to raise taxes. Under this approach, the panel would decide on the amount of new revenue to be raised but would leave it to the tax-writing committees of Congress to fill in details next year, well beyond the...

JOPLIN, Mo. (AP) — By all accounts, Mark Lindquist is a hero, an underpaid social worker who nearly gave his life trying to save three developmentally disabled adults from the Joplin tornado. Both houses of the Missouri legislature honored Lindquist, the Senate resolution calling him "a true hero and inspiration to others." But heroism doesn't pay the bills. The tornado's 200 mph winds tossed Lindquist nearly a block, broke every rib, obliterated his shoulder, knocked out most of his teeth and put him in a coma for about two months. Lindquist, 51, ran up medical expenses that exceed $2.5 million,...

Reagan Economist Breaks Down Cain's 999 Plan (Art Laffer)

October 6, 2011The Size of the 5.6% Millionaire's Tax by Nick KasprakCongressional Democrats have proposed a new 5.6% surtax which would apply to AGI over $1 million as their latest attempt to find a politically palatable way to pay for the American Jobs Act. The surtax proposal replaces President Obama's proposal to limit the benefit of itemized deductions to at most 28% of their value. The new proposal targets very high-income taxpayers with incomes over $1 million, so I thought it would be interesting to look at a "typical" millionaire and see how such a taxpayer would be affected. I'll...

Democrats are increasingly abandoning their biggest talking point on taxes: Families earning more than $250,000 a year are “wealthy” and should pay more. That figure — $250,000 for a household — has been at the tip of the tongue of so many Democratic candidates and lawmakers in the past few elections that it’s become ingrained in the party’s tax philosophy. But they’ve taken a beating from Republicans and have grown increasingly divided on the issue, since that income level would not only cause tax increases for some small businesses but also hit upper-middle-class suburban voters in swing states. So Democrats...

The White House Press Office announced that President Barack Obama will hold a press conference at 11 a.m. this morning — though no topic was announced. Obama is in the middle of a weeks-long push on his jobs bill, which is certain to take up a significant portion of the questioning. We expect him to be asked about the Occupy Wall Street protests, and the killing of U.S.-citizen Anwar al-Awlaki as well. Also expect Obama to be asked about his criticism of Bank of America's $5 fee for checking account customers and his increasingly-combative tone toward Republicans as his reelection...

If you can count on the Europeans to invent one thing, it is the invention of taxation. The latest effort by the European Commission is one that is just baffling if you have been watching the action in the European banking sector of late. The sector is already gushing blood. Here comes a proposal, which we assume is close to dead on arrival, for a financial transaction tax for stock, bond, and derivative transactions that take place between financial institutions. The EC is probably naive enough to believe its math. It claims that this could approximately raise €57 billion every...

Mr. President, what is the maximum rate of tax you think any American should be forced to pay? I asked those in the White House press office this question last week, and I have yet to receive an answer. I am willing to bet they will never give me or any other American the number. In last week’s column, I showed how many Americans of all income levels are paying effective tax rates of approximately 400 percent on their savings income because the government is keeping short-term interest rates under 1 percent while generating inflation of 3.8 percent at an...

Barack Obama last week put forward a package of tax increases to pay for a proposed $447bn jobs programme. The most controversial proposal is that no one making more than $1m a year should pay a smaller share of his income in taxes than a middle class family pays. This is popularly called the Buffett Rule, after the billionaire Warren Buffett, who has long complained that he pays a lower tax rate than his secretary, and famously came out in public recently asking to pay more.Republicans were quick to denounce the proposal as “class warfare”, and to argue that low...

NOTE: Jackson is the CEO of CapLinked, an online platform for private investing. He previously ran the marketing team at PayPal, and is the author of the award-winning book The PayPal Wars. President Obama announced a new tax proposal that sets a minimum tax rate for households with annual income above $1 million on Sept. 19. The proposal is called the “Buffett Rule” for billionaire investor Warren Buffet, who in an editorial in August bemoaned that he pays a lower federal tax rate than his middle-class employees. While time will tell if this new tax proposal makes for good politics,...

Former President Bill Clinton, who on Sunday was one of the strongest supporters of President Barack Obama's jobs bill, said his tax plan "is a little confusing." In an interview with the conservative website Newsmax, said raising revenues in this economy would be counter-productive. “I personally don’t believe we ought to be raising taxes or cutting spending until we get this economy off the ground," he said. If we cut government spending, which I normally would be very inclined to do when the deficit’s this big, with interest rates already near zero you can’t get the benefits out of it."...

In his nightly note, BTIG's Dan Greenhaus digs into the "Buffett Tax" and some math on the deficit. First he notes that over the next 10 years, deficits are estimated at around $6 trillion. Then he looks at what socking it to the rich actually gets us. Conclusions. It doesn't get us THAT far towards balancing the budget, but it's not nothing. The below table breaks down actual tax return data from the IRS from 2009, showing how many returns were filed at each income level, what their taxable income was, what tax they paid and what percentage of the...

He’s got a deficit-reduction package that can’t clear the House, thanks to massive new tax hikes that everyone knows are a deal-killer. He has a jobs package that can’t clear the Senate. What’s a President to do? Threaten a veto: President Obama warned he will veto any deficit plan brought to him by Congress that wasn’t ‘balanced’ between taxes and spending cuts.‘We are not going to have a one-sided deal that hurts the folks who are most vulnerable,’ Obama said Monday morning, speaking from the Rose Garden.He rejected accusations that tax increases for the wealthy was ‘class warfare’.The president argued,...

I think he means this as a generic gesture of goodwill, i.e. let’s not start drawing lines until we’ve at least met face to face, but I bet a lot of grim, knowing glances and nods are being exchanged at Americans for Tax Reform right now. A leading Republican lawmaker would not rule out tax increases on Thursday if they could boost economic growth, adding that “everything is on the table” for a congressional panel charged with forging a deal to cut the deficit.Representative Dave Camp, head of the tax-writing Ways and Means Committee in the House of Representatives, told...

While Washington wrangles over how to avoid defaulting on the government’s massive debt load, voters are worried the final deal will raise taxes too much but won't cut spending enough. The latest Rasmussen Reports national telephone survey finds that 62% of Likely U.S. Voters are worried more that Congress and President Obama will raise taxes too much rather than too little in any deal to end the debt ceiling debate. Just 26% fear they’ll raise taxes too little. Twelve percent (12%) aren’t sure. (To see survey question wording, click here.) Similarly, 56% worry that Congress and the president will cut...