How big is the gulf between Democrats and Republicans when it comes to taxes? Some of the presidential candidates talk of unity and bipartisanship, but the differences between the two major parties on taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. issues are quite real. This is the subject of an editorial published last week in Investor’s Business Daily, written by Grover Norquistt:
George Wallace famously announced that there wasn’t a dime’s worth of difference between the Republican and Democratic parties. But in the 2008 election, there’s at least $2 trillion difference between them.
For starters, every single Democrat that entered the presidential primaries supported ending the Bush tax cuts in 2010. That means raising the capital gains taxA capital gains tax is levied on the profit made from selling an asset and is often in addition to corporate income taxes, frequently resulting in double taxation. These taxes create a bias against saving, leading to a lower level of national income by encouraging present consumption over investment. to 20% from 15%, increasing the top marginal tax rateThe marginal tax rate is the amount of additional tax paid for every additional dollar earned as income. The average tax rate is the total tax paid divided by total income earned. A 10 percent marginal tax rate means that 10 cents of every next dollar earned would be taken as tax. on income to 39.6%, increasing the death tax from zero in 2010 to 55% above $1 million and hiking the tax on dividends to 39.6% from 15%.
Over a 10-year period, that would raise $2 trillion above the present projected tax burden. Every single Republican who ran for the nomination—from Ron Paul to John McCain—promised to maintain the tax cuts of 2001 and 2003. A $2 trillion tax cut, compared with allowing the tax cuts to lapse.
And that’s just for openers.
For more on the candidates’ tax plans take a look at our Presidential Candidate Tax Plan Comparison page.
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