The Washington DC Examiner Newspaper
2008-07-03 07:00:00.0
Current rank: Not ranked

WASHINGTON -

Barack Obama is racing back to the center from the left-wing positions of his primary campaign by endorsing things like federal aid for faith-based charities. But on taxes, the Illinois Democrat clearly wants to make America look like Europe, which is to say overtaxed, underemployed and resigned to slow economic growth.

Obama proposes to let the Bush tax cuts expire, raise the top tax rate to 39.6 percent, remove the cap on income subject to Social Security levies, and set a top marginal rate of 55 percent on incomes of more than $250,000. Throw in state and local taxes for people living in high-tax states like Maryland, and the top marginal rate goes to 60 percent. Obama’s objective is to make the tax system “fairer” by redistributing wealth from “the rich” to everybody else.

Obama would move America into elite company. Only six of the top 30 industrial nations have marginal tax rates of 55 percent or more. Obama’s proposal would thus make America’s top rates higher than those in such socialist havens as Sweden and Denmark, according to Rea Hederman and Patrick Tyrell of the Heritage Foundation’s Center for Data Analysis.

This quantum leap in the U.S. tax burden would have deep and destructive consequences for all Americans. Tax shelters and evasion gimmicks not seen since the Carter years would resurface. Investment capital — which is the engine of economic growth — would flee overseas, taking jobs and opportunity with it.

Worst of all, the incentive for people to work harder to earn more and improve their prospects would be severely damaged. Economic stagnation would appear as unemployment increased and the cost of government skyrocketed. Just like in Europe, where excessive taxation has been a way of life for decades.

This is not the economic strategy favored by most Americans, judging by recent survey data.

When Gallup recently asked whether the government should “take steps to distribute wealth more evenly among Americans” or seek to “improve the overall economic condition and the jobs situation,” the vast majority chose the latter, including 90 percent of Republicans, 85 percent of independents and 77 percent of Democrats.

Viewed by income, 88 percent of Gallup’s respondents making $75,000 or more chose the latter, as did 83 percent of those making less than $75,000 but more than $30,000. Even 78 percent of those making under $30,000 chose against wealth redistribution. But curiously, only 51 percent of those interviewed in a recent Rasmussen survey said Obama would raise taxes if he’s elected. Don’t expect Obama to fill this knowledge gap.