Tags: Laffer | Obama | Tax | Fail

Arthur Laffer: Obama's Tax Strategies Are Guaranteed to Fail

Wednesday, 18 Apr 2012 07:57 AM

President Barack Obama's calls to up the national tax burden by $1.5 trillion over the next decade by hiking rates on households earning more than $250,000 a year will fail, just like similar attempts in California have done in decades past, argues economist Arthur B. Laffer, an architect of Ronald Reagan's economic policies.

"According to a new report from the Golden State's Franchise Tax Board, the top 1 percent of earners paid $25.7 billion in state income taxes in 2007. Two years later, the most recent for which data are available, that figure dropped by half — to $12.3 billion," Laffer writes in a column for Investors.com.

"Researchers note that the economic downturn contributed to this drop. But that's not the only cause. A huge number of high-income taxpayers have simply left the state."

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

Between 1992 and 2008, California lost a net 869,000 tax filers, Laffer points out, adding roughly 3.5 million moved into California, while 4.4 million left, the latter being wealthier.

"Smothered under a growing thicket of taxes and regulations, the Golden State's entrepreneurs and top earners have sought friendlier climes — taking their incomes and the taxes they pay with them," Laffer writes.

"For many people, moving out of California is equivalent to getting a big raise — because their tax rates plummet."

Obama's proposal calling on a minimum 30 percent tax rate for millionaires suffered a setback in the Senate, with Democrats failing to muster up 60 votes to push it through.

Economists say partisan bickering could derail recovery and instead, leaders should focus on revamping the entire tax code instead of the tax rate.

"Politicians' time would be better spent working on an overhaul of the tax system that could actually pass rather than reforms that are likely to go nowhere," says Maya MacGuineas, president of the nonpartisan Committee for a Responsible Budget, according to Reuters.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here





© 2017 Newsmax Finance. All rights reserved.

1Like our page
2Share
334
2012-57-18
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved