Wednesday, April 11, 2012

"The Obama Rule"

I'm working, sort of, on some commentary related to the proposed "Buffet Rule" which will raise taxes in the name of "fairness," but until (and unless) I finish, here's some good (and relevant) stuff from the Wall Street Journal...
The century-long history of the federal income tax teaches us one lesson over and over: The higher the tax rates, the more loopholes Congress inserts as a way around those rates. This is why the government collected roughly as much tax revenue as a share of GDP when the top tax rate was 70% in the 1970s as it did when the rate fell to 28% in 1986.

The Buffett rule is really nothing more than a sneaky way for Mr. Obama to justify doubling the capital gains and dividend tax rate to 30% from 15% today. That's the real spread-the-wealth target. The problem is that this is a tax on capital that is needed for firms to grow and hire more workers. Mr. Obama says he wants an investment-led recovery, not one led by consumption, but how will investment be spurred by doubling the tax on it?

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