President Barack Obama’s tax increases will mean the end of capitalism as we know it, says David Rosenberg, chief economist at Gluskin Sheff & Associates.
“Folks, look what the U.S. top marginal tax rate did from 1932 to 1940 – 25 percent to 80 percent,” he wrote in a note to clients obtained by the Business Insider.
“It shows who paid for the New Deal, and there can be little doubt that something similar is going to happen this time around.”
At 9.9 percent of GDP, Obama is running budget deficits twice as big as those under President Franklin Roosevelt during the New Deal, Rosenberg explains.
“Believe it or not, at a town hall meeting the president actually said: ‘We don't begrudge success fairly earned. I do think at a certain point you've earned enough money.’”
And what’s the meaning of that?
“Sounds to me as though capitalism is going to be taking something more than just a sabbatical,” Rosenberg wrote.
Obama’s attack on capitalism will hurt the U.S. dollar against its Canadian counterpart, boosting Canadian stocks, Rosenberg says.
He isn’t the only one concerned about U.S. tax hikes.
The Obama administration hopes to nearly triple the top tax rate on dividends to 43.4 percent, a Wall Street Journal editorial points out.
“You can expect fewer businesses either to offer or increase dividend payouts, which means less dividend revenue for the government,” not to mention investors, the editorial says.
© 2017 Newsmax Finance. All rights reserved.