Americans are simply too smart to buy into President Obama's latest grab for massive tax increases, according to Diana Furchtgott-Roth, former chief economist at the Department of Labor during the George W. Bush administration.
Furchtgott-Roth, a senior fellow at the Manhattan Institute, said voters are not fooled by the class warfare disguise used by Obama in his State of the Union address this week.
"Lowering taxes is more popular with the American people than raising them, and few politicians who advocate tax hikes are elected to office. Yet Obama plows ahead anyway. Give him an A for persistence, even though he gets an F in helping his party and boosting the economy," she wrote in a guest column for
MarketWatch.
Furchtgott-Roth noted the president is proposing raising the top tax rate on capital gains and dividends to 28 percent from the current 24 percent, up sharply from 15 percent when he took office in 2009.
Dividends have a lower tax rate because corporate earnings have already been taxed once, and capital gains are taxed at a lower rate to offset the distortions caused by inflation, she said.
But most important, capital gains have a lower tax rate to spur economic growth, according to Furchtgott-Roth, fostering the kinds of American entrepreneurship and new business formations that are essential to job growth.
"Some investments never break even. Investors supply the financial capital essential for investments that spur innovation, improve productivity and expand capacity. It is beneficial for society to encourage this risk-taking and tax the proceeds of capital at a lower rate."
Furchtgott-Roth noted that if Obama were serious about helping the plight of low-income Americans, he would stop the political posturing.
"Americans know tax hikes result in slower economic growth and reduced opportunities for everyone. Disguising capital gains tax increases in class warfare garb won't make them more palatable," she wrote.
However, Obama's attempts to bash the rich and punish the finance industry might be popular,
The Telegraph reported.
"And yet, piece by piece, Obama is shattering the competiveness of the U.S. economy. Its taxes on entrepreneurs are rising all the time, and one of the highest and most punitive corporate tax regimes in the world is driving American companies abroad," the British newspaper said.
U.S. Census Bureau data shows that in 2014, for the first time in a generation, the number of businesses closing down in the U.S. was greater than the number starting up. The agency estimated 400,000 new companies were created last year, but 470,000 shut down.
"The U.S. now ranks only 12th in the developed world for start-ups, measured on a per capita basis. It is outranked by counties such as Denmark, Hungary and Finland, and even crisis-struck Italy is doing better on that score than America."
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