If the Democrats get their way on taxes, the top combined tax rate would soar to 62 percent, warns economist Stephen Moore of The Wall Street Journal.
A combination of higher income tax rates, phasing out of deductions, payroll taxes, state taxes, new healthcare taxes, and a 3 percent “millionaire’s tax” would add up fast, Moore says.
Essentially, the Democrat’s plan is more Jimmy Carter than Bill Clinton, he writes in an Op Ed for the newspaper.
“If the Democrats' millionaire surtax were to happen — and were added to other tax increases already enacted last year and other leading tax-hike ideas on the table this year — this could leave the U.S. with a combined federal and state top tax rate on earnings of 62 percent,” he figures.
“That's more than double the highest federal marginal rate of 28 percent when President Reagan left office in 1989. Welcome back to the 1970s.”
The problem, he says, is that the United States is trading places with once non-competitive rivals in the rest of the world. America’s largest trading partners in 1990 had individual income tax rates as high as 51 percent, compared to 33 percent in the United States.
“It's no wonder that during the 1980s and '90s the U.S. created more than twice as many new jobs as Japan and Western Europe combined,” he writes.
Now taxes abroad are falling while U.S. rates are set to rise. “What all this means is that in the late 1980s, the U.S. was nearly the lowest taxed nation in the world, and a quarter century later we're nearly the highest,” he explains, even without the proposed increases to come.
Meanwhile, former President Bill Clinton plunged into the debate on the debt ceiling, suggesting that a failure to raise the $1.43 trillion spending limit wouldn’t be a disaster.
“If we defaulted on the debt once for a few days, it might not be calamitous,” Clinton reportedly said at a Washington event.
He later recanted that position via a spokesperson. “President Clinton did not in any way mean to suggest that a default would not be highly damaging for the economy even for a very short period of time. He inadvertently misspoke,” reported Politico.com, citing a statement from the former president.
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