Free Republic

... A large and growing literature continues to support the claim that high marginal tax rates and big tax hikes are harmful to economic well-being. See the work of the Dallas Fed’s Karel Mertens and colleagues, or the Romers’ own 2010 work finding a “highly contractionary” effect from postwar tax hikes. The theoretical cases for towering “optimal” tax rates that Mr. Krugman cites always tend to trip up over political realities if nothing else. Politicians may find it politically handy to be seen dinging the rich, but they also find it useful to placate the rich by dishing out loopholes....

President Barack Obama's new health-care legislation aims to raise $210 billion over 10 years to pay for the extensive new entitlements. How? By slapping a 3.8% "Medicare tax" on interest and rental income, dividends and capital gains of couples earning more than $250,000, or singles with more than $200,000. The president also hopes to raise $364 billion over 10 years from the same taxpayers by raising the top two tax rates to 36%-39.6% from 33%-35%, plus another $105 billion by raising the tax on dividends and capital gains to 20% from 15%, and another $500 billion by capping and phasing...

A record number of the 142 million tax returns filed in 2008 resulted in no tax payment, according to a Tax Foundation analysis of IRS data. That means the tax filers got back every dollar that had been withheld from their paychecks, and often more. Roughly 51.6 million tax returns, or 36.3 percent, were filed by such "nonpayers," people whose exemptions, deductions and credits wiped out any federal income tax due. A family of four earning more than $50,000 can have no income tax liability after taking the standard deduction and the child tax credit. "Two records were set in...

Fiscal Policy: The latest data show a record number of people with no tax obligation. We also have the highest-earning nontaxpayers ever. With more riding the wagon and fewer pulling, it should soon break down. A record number of the 142 million tax returns filed in 2008 resulted in no taxes owed, according to the Tax Foundation's analysis of the latest IRS data. About 51.6 million returns, or 36.3%, were filed by those whose deductions, exemptions and tax credits wiped out any federal income-tax obligation. These aren't people who have overpaid their taxes or had so much withheld from their...

... On Tuesday, voters here and across Oregon will have the chance to make that happen when they decide the fate of two ballot measures that would raise taxes on higher-income residents and on businesses to help pay for public education and other services. Known as Measures 66 and 67, the votes are referendums on $727 million in tax and fee increases that were approved last year by the Democratic-controlled Legislature. ... Opponents say the proposals are the wrong fix at the wrong time. State income taxes for wealthier Oregon residents are already among the highest of any state. But...

The actual economic costs of the proposed health care surtax and the expiration of the 2001 and 2003 tax cuts will be twice the amount of revenue the government intends to collect. According to a new analysis from the Tax Foundation, the higher tax rates are estimated to raise $88 billion in 2011, but the economy will incur an additional burden of $76 billion—or "deadweight loss"—as a result, which raises the total cost of the tax increases to $164 billion, roughly double what lawmakers intend to raise. Tax Foundation Special Report No. 170, "The Excess Burden of Taxes and the...

With the expiration of the Bush tax cuts and the implementation of a proposed health care surtax, in 2011 the top federal individual income tax rate will rise to more than 46% and over 50% for those living in many states. This sharp increase in tax rates can be expected to reduce the size of the tax base and may raise substantially less revenue than the casual observer might think—perhaps only 60 cents on the dollar. In Tax Foundation Fiscal Fact No. 182, "The Economic Cost of High Tax Rates," Senior Fellow Robert Carroll explains that for every 1% decrease...

The top 1 percent of tax filers earned about 22.8 percent of the nation's income in 2007 (the latest IRS data available), and paid 40.4 percent of all federal income taxes - more than the bottom 95 percent of tax filers combined, according to a Tax Foundation analysis of just-released IRS data. Both income and income tax shares for the top 1 percent of tax returns (AGI over $410,096) hit all-time highs in 2007. In Fiscal Fact No. 183, "Summary of Latest Federal Individual Income Tax Data," Tax Foundation Senior Economist Gerald Prante notes that the record-setting trend for income...

... Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it." One year later, nobody's grinning. One-third of the...

[Obama's] agenda is a bold one in many ways. Yet his tax code would still look more kindly on wealth than Nixon’s, Kennedy’s, Eisenhower’s or that of any other president from F.D.R. to Carter. And only part of the reason for this is widely understood. It’s well known that tax rates on top incomes used to be far higher than they are today. The top marginal rate hovered around 90 percent in the 1940s, ’50s and early ’60s. Reagan ultimately reduced it to 28 percent, and it is now 35 percent. Obama would raise it to 39.6 percent, where it...

The $787 billion stimulus includes temporary tax breaks for workers, college students and car and home buyers, but all are denied to higher-income folks. That's because of what's known as phaseouts--the long tradition of curtailing tax breaks as income rises. Democrats had an excuse for denying the temporary tax cuts to rich folks: They're less likely to spend the extra cash and, anyway, President Barack Obama campaigned on tax cuts for couples earning up to $150,000. But phaseouts aren't just a Democratic game. For years, points out Clint Stretch, managing principal of tax policy at Deloitte Tax, politicians from both...