Tag Archives: Tax Hikes

News

New Ernst and Young report: proposed tax increases will cost 710,000 jobs

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Here’s the news from The Hill:

Allowing tax rates for the country’s highest earners to rise, an idea endorsed by top Democrats, would have a dire effect on the economic recovery, according to a new report prepared for business groups that was released Tuesday.

The study from Ernst & Young found that letting tax rates for the wealthiest Americans lapse would sap $200 billion and some 700,000 jobs out of the economy, reduce wages by 1.8 percent and lead to a decrease in investment.

“These results may suggest to policy makers that allowing the top tax rates to increase comes with economic consequences,” Ernst & Young’s Robert Caroll and Gerald Prante wrote in the report for the Independent Community Bankers of America, the National Federation of Independent Business, the S Corporation Association and the U.S. Chamber of Commerce.

“Long-run output can be expected to fall, and, depending on the use of the revenues, living standards, as reflected by workers‟ real after-tax wages, may also be lower.”

Top Republicans, including House GOP leaders and committee chairmen, jumped on the Tuesday report, as they continue to battle with President Obama and Democrats over how to proceed on tax issues and the broader fiscal cliff.

Obama reiterated last week his plan to only extend the Bush-era rates for annual family incomes up to $250,000 for another year, a proposal many congressional Democrats have coalesced behind. Republicans on the Hill want to extend all current rates for a year.

The key findings are here on the House Ways and Means Committee‘s web site:

Lower wages, fewer jobs and less investment

  • Output in the long-run would fall by 1.3 percent, or $200 billion in today’s economy.
  • Employment in the long-run would fall by 0.5 percent, meaning roughly 710,000 fewer jobs in today’s economy.
  • Capital stock and investment in the long-run would fall by 1.4 percent and 2.4 percent, respectively.
  • Real after-tax wages would fall by 1.8 percent, reflecting a decline in workers’ living standards relative to what would have occurred otherwise.

Every state in the U.S. feels the impact of tax hikes

  • The report, which offers a state-by-state look at the impact on economic output and employment, finds that every state is affected negatively by the tax increases contemplated by the Obama Administration.

Ernst & Young is one of the top financial firms in the world. The report is entitled “Long-run macroeconomic impact of increasing tax rates on high-income taxpayers in 2013”.

Even though Obama has increased our debt by nearly 6 trillion in less than four years, that money hasn’t created any jobs because government is not efficient at creating jobs that last. When you take money away from people who create jobs, you lose the jobs.  Wasting money on green energy firms that go bankrupt is a great plan to pay back your campaign fundraisers, but it’s not a good plan to create jobs. Bailing out labor unions with billions of taxpayer dollars so that they can create electric cars that catch fire is not the right way to create jobs, either. That’s what the stimulus was – $800 billion dollars taken out of the hands of businesses and sent directly to Obama’s allies. We need to get the government out of our business if we want job creation.

News

How well did tax hikes for the rich work in California?

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Economist Art Laffer explains in Investors Business Daily.

Excerpt:

According to a new report from the Golden State’s Franchise Tax Board, the top 1% 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.

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.

Between 1992 and 2008, California suffered a net loss of 869,000 tax filers. About 3.5 million moved into California, while 4.4 million left.

Those that left were disproportionately wealthy. The average adjusted gross income for people leaving the state over that period was $44,700. Meanwhile, the average person moving into California posted income of just $38,600.

So California lost wealthier, more productive residents. And poorer, less-productive folks took their places — some of them, at least.

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.

For many people, moving out of California is equivalent to getting a big raise — because their tax rates plummet. Of the top nine states Californians are flocking to, the average top personal income tax rate is 3.44%. California’s is nearly triple that, at 10.3%.

Also, among those nine states, the corporate tax rate averages 4.59% vs. California’s 8.84%. And their combined state and local tax burden is 9%, versus California’s 11%.

Similarly, if tax rats get to be too high, people will just work harder at getting their capital out of the country. In the case of businesses, they will stop hiring people here and instead open factories and plants in other low-tax countries. It’s socialism that causes outsourcing – taxing and regulating businesses causes them to leave or expand elsewhere.

News

Top Romney aide: Romney can change his positions after primary, like an Etch-a-Sketch

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Finally, proof that Mitt Romney is a liberal masquerading as a conservative – from his own campaign spokesman.

Look:

ABC News has the raw story.

Excerpt:

For a candidate who has spent months battling the title of “flip-flopper,” perhaps the last thing he would want associated with his name is an Etch A Sketch, those do-over drawing boards that let you shake your scribbles away with the flick of a wrist.

Unfortunately Mitt Romney won’t be able to shake away this comparison any time soon. When his campaign spokesman Eric Fehrnstrom was asked this morning on CNN how the GOP frontrunner would make the pivot to the general election, Fehrnstrom compared Romney’s primary campaign to an Etch A Sketch, a gaffe that spread like wildfire to Romney’s rival’s stump speeches.

“Well, I think you hit a reset button for the fall campaign. Everything changes. It’s almost like an Etch A Sketch,” Fehrnstrom told CNN’s John Fugelsang. “You can kind of shake it up and restart all of over again. But I will say, if you look at the exit polling data in Illinois, you’ll see that Mitt Romney is broadly acceptable to most of the factions in the party. You have to do that in order to become the nominee…”

Within hours, Romney’s opponents seized on the comments, using them to reinforce the notion that the former Massachusetts governor will, as Rick Santorum said, “say anything to get elected.”

“We’re not looking for someone who’s the Etch A Sketch candidate,” Santorum said in a campaign speech just hours after Fehrnstrom’s comments. “We’re looking for someone who writes what they believe in stone and stands true to what they say.”

Both the Santorum and Newt Gingrich campaigns made pit stops at the toy store to pick up Etch A Sketches of their own, deploying their new visual aids at speeches and rallies in Maryland and Louisiana today.

Conservative Republican Rick Santorum reacts to this clip. (H/T Robert Stacy McCain)

Excerpt:

This morning on CNN, senior advisor to the Romney Campaign, Eric Fehrnstrom, admits his candidate and their campaign is based on the “etch-a-sketch” model when asked by if the positions he’s taken in the Republican primary have been too conservative.

Hogan Gidley, National Communications Director, said: “We all knew Mitt Romney didn’t have any core convictions, but we appreciate his staff going on national television to affirm that point for anyone who had any doubts.  With the two year anniversary of the signing of ObamaCare upon us, can voters really believe that the man who urged the President to use his healthcare plan in Massachusetts as a model would really repealObamaCare?  Or is that promise just something they would ‘shake up and restart’ with when Romney hits the general election.

Voters can trust that Rick Santorum will say what he believes, and do what he says.  They may not always agree with Rick Santorum, but they can trust him because they know he is a man of principle.  Clearly, the same cannot be said of Governor Romney.”

Do you think Mitt Romney is a conservative? If you do, check out the links below.

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