Obama may be the most destructive tax increaser in history
The punitive double taxation of company profits (once in the hands of the company and then again in the hands of the dividend recipient) has a hugely distorting effect on any economy. So much so that a LEFTIST government in Australia abolished it long ago.
A major effect of it in the USA is to divert investment away from companies and into risky small businesses. As a way of avoiding the tax, many small businesses operate as sole traders instead of as companies. But small businesses go broke at an enormous rate, thus destroying lots of capital and lots of jobs.
The only bright side of the U.S. system is that dividends are taxed at a low rate -- 15% -- so many people are prepared to wear that as a penalty for putting their money into companies. But Obama now wants to take that away and hike the dividend tax rate to 43%. That will kill a lot of company investment and hence a lot of job creation. Americans must not let this moronic idea pass
“President Obama released his FY 2013 budget this morning. By his own numbers, his budget raises net taxes over the next decade by $1.56 trillion (Table S-9, page 225). As a percentage of the economy, tax revenues would rise all the way to 20.1% of GDP in 2022, far higher than the historical tax revenue average of 18.3% of GDP (Table S-1, page 205).”
One and a half TRILLION dollar increase in tax years.
That is $1,5 Trillion taken from your family and businesses and given to government. You can then add another TRILLION for the increases costs of businesses, for their taxes, which will be passed on to the consumer
“The dividends rate will raise from 15% today to 43.4% next year. The Obama budget proposes taxing dividends for investors making more than $250,000 per year at ordinary income tax rates, which will rise to a top rate of 39.6% under the budget. In addition, the Obamacare surtax on investors will combine to nearly triple the tax rate on dividends in just one year.”
This is a killer for investments and buying power. This budget is a job and economy killer. Obama may get his wish, he will transform this nation–from a prosperous one to a Third World County.