I See England, I See France - Where in the world have tax increases made things better?
December 6, 2012
The left and much of the center are launching a scorched-earth assault against the right's position on taxes.
Republicans are being told they must hike taxes on top earners if they're serious about paying down the debt. Grover Norquist is being portrayed as a mad sorcerer, staggering around and misfiring spells in fits of pique while his entranced minions slowly come to. Here in Washington, meaningless buzzwords are fluttering through the air like dead autumn leaves. "Serious." "Hostage takers." "Reality-based community." "Balanced approach."
The last of those terms might be the most amusing. President Obama's initial fiscal cliff plan was repeatedly lauded as a "balanced approach." On one hand, Democrats got tax hikes on the top earners. And on the other hand, Democrats got $200 billion in stimulus. Even-steven, you see.
But let's examine the plan's main provision and President Obama's loudest podium-thumper: the tax hikes on top earners. If passed, rates for the top two tax brackets would increase from 33% and 35% to 36 and 39.6% respectively, tax rates on capital gains would go up from 15% to 23.8%, and the top rate on dividends would skyrocket from 15% to 43.4%. The president's accountants claim this would raise $1.6 trillion over the next decade without slowing down the economy.
If that were true, it would be worth consideration. Conservatives like low taxes, but the overriding concern right now must be paying down the debt. $160 billion per year might be a drop in the bucket, but enough drops fill up.
The problem is it's not true. Raising taxes only makes...