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Obama’s Tax Plan — Ouch

Friday, June 27, 2008

Critics of Barack Obama keep pointing to his questionable friendships with terrorist Bill Ayers, convicted felon Tony Rezko and the 20 year association with Rev. Wright. While it’s important to vet anyone aspiring to be President we should also be looking even closer at his economic polices.

Obama’s Tax plan would boost the top marginal rate to well over 55 percent—before the inclusion of state and local taxes—resulting in many individuals seeing their marginal tax rate double.

Obama would end the Bush tax cuts and allow the top two tax rates to return to 36 and 39.6 percent. He also would allow personal exemptions and deductions to be phased out for those with income over $250,000. The real kicker, though, is that Senator Obama would end the Social Security payroll tax cap for those over $250,000 in earnings. (The cap is currently set at $102,000.) These individuals will then face a tax rate of 15.65 percent from payroll taxes and the top income tax rate of 39.6 percent for a combined top rate of over 56 percent on each additional dollar earned.

Senator Obama’s new tax rate would give the United States one of the highest tax rates among developed countries. Currently only six of the top 30 industrial nations have a tax rate for all levels of government combined of over 55 percent. Under Obama’s tax plan, the United States would join this group and have a higher top rate than such high-tax nations as Sweden and Denmark. The top marginal rate would exceed 60 percent with the inclusion of state and local taxes, which means that only Hungary would exceed Senator Obama’s new proposed top tax rate.

Senator Obama’s tax rate would be the highest individual tax rate since the Jimmy Carter days. Tax shelters and tax avoidance strategies were common when the top marginal rate was 70 percent or higher. This new top tax rate will again encourage these gimmicks, reducing investment and economic growth as resources are squandered in an attempt to avoid punitive taxation.

The left beleives that the Bush Tax Cuts have only helped the rich — but their calculation is purely political. Higher tax rates will slow the economy.

If Barack Obama is elected President in November it will cost every American big time.

The Heritage Foundation has Obama’s Tax Plan spelled out in even more detail here.

Posted: 1915PT 06/27/08


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One Comment leave one →
  1. cmblake6 permalink
    Sunday, July 13, 2008 4:26 pm

    10% is good enough for God, it should be good enough for government. Fair tax. Sales tax on other than foodstuffs from the store and housing. Aside from that, no income tax. Maybe an additional “sin tax” on yachts, private planes, that sort of thing.

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