Study shows Obama tax plan bad news for the economy — especially in blue states

Ed Morrissey


…Republicans want to follow the CBO’s advice and cancel the tax hikes, while looking for other ways to reduce spending rather than the sequestration policies set to take effect in January.  Democrats want to hold both hostage to force the GOP to agree to Obama’s proposal to raise taxes on earners over $250,000 — or $1 million, depending on which Democrats one asks, and when.  Will the economic impact of those tax hikes be much different than that of the full fiscal cliff?  According to a new study by Ernst and Young … no:

With the combination of these tax changes at the beginning of 2013 the top tax rate on ordinary income will rise from 35% in 2012 to 40.9%, the top tax rate on dividends will rise from 15% to 44.7% and the top tax rate on capital gains will rise from 15% to 24.7%…

…John Merline at Investors Business Daily also points out that the effects will be felt more in the very states that support Obama the most:

Connecticut, New York, New Jersey, Massachusetts and California — all blue states — would suffer the most, according to a Tax Foundation report.

The reason, the study notes, is that these states have higher shares of wealthy taxpayers than the rest of the country. In each of them, those making more than $200,000 — the taxpayers targeted by Obama’s hikes — account for more than 56% of all federal income taxes paid in those states. The U.S. average, the report notes, is 50%.

“As a result, a higher proportion of new tax dollars will come from these states,” noted the Tax Foundation’s Ed Gerrish, “likely impacting local economies.”

…Clearly, Obama has prioritized re-election over the fragile economy.  Why else would he talk about raising taxes as the economy slides toward recession, and the fiscal cliff guarantees one?  In my column for The Fiscal Times,  I write that the “you didn’t build it” comment relates directly to Obama’s view of the role of government in dictating economic outcomes, but mostly he just needs to fight Mitt Romney with good, old-fashioned class warfare more than he needs to position the US for recovery in 2013…

Read the complete article at

 UpdateWhy Businesses Should Fear Elizabeth Warren

When you’re too liberal for Senate Republicans to confirm you as a top regulator, what do you do? You run for Senate in Massachusetts, of course…

Update 2: New RNC ad hits Obama for not meeting with his Jobs Council

…Q.    So there’s no reason they [the Jobs Council and the President] haven’t met publicly?

MR. CARNEY:  No, there’s no specific reason except the President has obviously got a lot on his plate.

The ad then notes Obama has had 10 golf trips and 106 fundraisers in the last six months. Given that the President had, as of last week, held about 73% as many fundraisers as Bush and Clinton held in their combined respective re-election campaigns, this should be a pretty effective method of showing the President’s lack of seriousness when it comes to actual governing. Check out the ad in full…

Update 3: via Weasel Zippers

click on the image to enlarge

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