Investor's Business Daily Quotes Will McBride on Fiscal Illusion

October 25, 2012

 

Obamanomics: Hardly a day goes by that the president doesn't mention raising taxes on the rich. Now a new study shows his one big idea would cost hundreds of billions in income and hundreds of thousands of jobs.

The nonpartisan Tax Foundation looked at Obama's plan for raising taxes on individuals who earn more than $200,000. Its conclusion: The tax hike would "slow economic growth and reduce future incomes across the board."

"When high-income families are hit with additional taxes, they reduce spending on goods and services and invest less," noted William McBride, the foundation's chief economist. "All of this hurts economic growth over the long run, resulting in fewer jobs and lower wages."

Obama tries to sell his plan purely on grounds of envy. The rich have money so let's take it, he tells poor and middle-class Americans, and "invest" it in public-sector jobs, education and green energy.

This only betrays Obama's view of the world — that wealth is something that simply exists and not created — and that government's main task is to redistribute it in the name of "fairness."

But as the Congressional Budget Office and others note, even if you took every penny from those earning over $1 million, you'd raise only about $700 billion — barely half our $1.3 trillion deficit. It's an unserious proposal, but no less dangerous for that.

The foundation also found that Obama's tax on the rich will hit individual states quite hard — especially high-income states now deep in recession.

California, for example, is estimated to lose a whopping $241 billion in income over 10 years due to Obama's tax hike. New York will lose $186 billion, Texas $131 billion, Florida $104 billion and Illinois $74 billion. Even rural Vermont is a loser: $2 billion.

Meanwhile, recent work by economists Robert Carrol and Gerald Plante show Obama's tax hike on the rich would kill 710,000 jobs.

And this is Obama's big idea for a second term, repeated in all three debates? No wonder he's losing ground in the polls.

 


Read More At IBD: http://news.investors.com/ibd-editorials/102512-630838-obama-tax-rich-hits-some-states-hard.htm#ixzz2C1dhdh4i

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