Stuck On Stupid Dems Want Carter Era Tax Rates - Road to the Middle Class

THE CENTRAL idea of the Reagan revolution was that punitive tax rates, like the 70 percent top rate on “unearned” income, was a jobs killer. Greedy entrepreneurs just won’t go out and risk capital when the government is going to claw back up to 70 percent of their earnings.

Liberals sneered at the Laffer Curve and called it “trickle-down” economics. But they pocketed their TIAA-CREF pensions swollen with the gains from a stock market that went from 1,000 to 10,000 in 20 years with nary a squeak.

Now Democrats like the sepuagenarian Charles Rangel want to return to those days, last seen in the Carter administration, by raising tax rates for high-income Americans. James Pethokoukis explains.

[Rangel’s 4.6 percentage-point surtax on high incomes] only looks like a restoration of [Clinton’s tax rates]. But if the Bush tax cuts expire, the four-and-a-half points stays on top of the 39.6 [top Clinton tax rate]. So they are taking the rate to 44 percent. Then you add on 1.3 points ... another 2.9 points on top of that for the Medicare tax. So we are back to the 50 percent marginal rate under that plan.

But that’s just the beginning. In addition, the Democrats are talking about raising the cap on FICA taxes. So that’s another 7 1/2 percent. Now we are talking about 60 percent marginal taxes. On wages.

Let’s not forget, by the way, that the top 1 percent of taxpayers already pay 37 percent of federal income taxes, and that the top 50 percent of taxpayers pay 97 percent of federal income taxes. Check it out at RushLimbaugh.com (truth in taxes) or the IRS(xls).

It’s just like the 1930s when for ten years, the United States was Stuck on Stupid.

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Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.

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