Just how would President Obama’s tax hikes create jobs and boost growth? Just what is the economic theory at play here? Well, the U.S. Treasury does its best to explain in its annual “green book.” Here is the rationale for hiking capital gains tax rates by two thirds:
Restoring the 20-percent capital gains tax rate for upper-income taxpayers and repealing the reduced tax rates on gains from assets held over five years for would reduce the deficit and make the tax system more progressive.
OK, and here’s the rationale for tripling dividend taxes:
Restoring the ordinary income tax treatment of qualified dividends for upper-income taxpayers would reduce the deficit and make the tax system more progressive. Taxing qualified dividends at the same rates as other ordinary income would also help simplify the tax code.
And for raising high-end income tax rates:
Limiting the tax benefit of upper-income taxpayers’ itemized deductions would reduce the deficit, make the income tax system more progressive, and distribute the cost of government more fairly among taxpayers of various income levels.
First of all, good luck getting that $800 billion. The Clinton tax hikes only raised a third of the projected revenue increase.
Second, in a time when the U.S. economy is burdened by zero (to falling) income growth and an ocean of unemployed, the president really views making the tax code “more progressive” as a priority? Really? That is ideology run wild. How about, instead, tax reform that makes the economy more competitive and reduces the penalty on savings and investment? Of course, that’s only applicable if you view the private sector as America’s growth engine. Obama, apparently, views the tax system as merely supplying the fuel for government to boost growth through spending.