The Truth About Taxes

(Photo credit: 401(K) 2012)

No, Romney Won't Raise Your Taxes $2,000

By PETER FERRARA on 8.8.12 @ 6:10AM

Mitt Romney's tax plan is a winner, and, lacking a serious rebuttal, President Obama settles for fabricating charges.

In a campaign stop at Rollins College in Florida last week, Barack Obama suggested that the middle class should resent Mitt Romney's tax proposals:

"I want everybody to understand here -- he's not asking you to pay an extra $2,000 [in taxes] to reduce our deficit; he's not asking you to pay an additional $2,000 to help care for our seniors; he's not asking you to pay an additional $2,000 in order to rebuild America or to fight a war," the president said. "He's asking you to pay more so that people like him can pay less."

But here is the actual truth: Mitt Romney is not asking the middle class or anyone else to pay more taxes. Mitt Romney is proposing to cut tax rates for everyone, across the board. That would finally liberate the economy for a long overdue recovery. Increased revenues from that booming economic growth, combined with savings from cutting Obama's runaway spending and closing loopholes that mostly benefit the highest income taxpayers, would enable a U-turn, from the four straight highest deficits in world history to a balanced budget in 5 years. The roadmap for doing that is Paul Ryan's 2013 budget, which has already been adopted by the Republican controlled House. (The Democrat majority Senate, by contrast, has never shown up for work.) This is classic tax reform, cutting rates and closing loopholes.

Obama's Tax Plan: Higher Taxes, No Jobs

The only candidate in this race proposing to increase taxes is Barack Obama. He has already enacted increases in the top rates of virtually every major federal tax, which will go into effect January 1. That is when the tax increases of Obamacare will hit, and when the Bush tax cuts will expire. (Remedial education for Obama supporters: "Bush tax cuts expire" means tax increases).

As a result, the top two income tax rates are already scheduled in current law to increase by nearly 20 percent; the capital gains tax rate is slated to soar by nearly 60 percent; the tax rate on dividends will explode to nearly three times its current level; the Medicare payroll tax rate will rocket up by 62 percent for disfavored taxpayers (the nation's job creators, investors, and successful small business entrepreneurs); and the death tax will rise further from the grave with a 57 percent increase in the top rate.

This is all on top of the corporate income tax rate, which under President Obama is already the highest in the industrialized world at 35 percent -- or nearly 40 percent counting state corporate rates on average. Even Communist China has a lower corporate income tax of 25 percent. The average in the social welfare states of the EU is less than that. Germany has an 18 percent federal corporate rate. Canada, which has been booming under a conservative government, is now at 15 percent.

American businesses are uncompetitive in the global economy under these tax policies. But with President Obama there is no relief in sight. Instead he is continually barnstorming the country calling for still more tax increases. Under his so-called Buffett rule, the capital gains tax rate would increase by 100 percent, to the fourth highest in the industrialized world.

Then in 2014, the Obamacare mandate tax will go into effect, requiring every employer and every worker in the country to buy the expensive health insurance plan that the federal government decides you must have. That is another tax increase on the middle class, which -- in addition to all the other tax increases in Obamacare they will have to pay -- trashes Obama's central campaign promise in 2008 not to raise taxes on working people.

Obama promised in 2008 that he would only increase tax rates on the wealthy -- the nation's job creators, investors, and small business owners -- to the levels that existed under President Clinton. But this talking point, which he and his brain dead supporters are still repeating, is now long outdated. In total, these tax increases will raise top rates well beyond the Clinton rates, and in an even worse context. Other countries have learned the lessons of Reaganomics and slashed rates on capital in particular since then, and so they are already outcompeting America today. Thus, the combined effect of all those tax rate increases on "the rich" would be a renewed recession, double-digit unemployment, and a federal deficit that tops $2 trillion.

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