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Ernst & Young: Obama tax hike will shrink economy, cost 700,000 jobs
A slew of tax hikes supported by President Obama will shrink the U.S. economy by 1.3 percent and cause 710,000 job losses, according to a new Ernst & Young report prepared on behalf of the Independent Community Bankers of America, the National Federation of Independent Business, the S Corporation Association, and the United States Chamber of Commerce and presented to the US House of Representative Ways and Means Committee.
This report examines four sets of provisions that will increase the top tax rates:
The increase in the top two tax rates from 33% to 36% and 35% to 39.6%.
The reinstatement of the limitation on itemized deductions for high-income taxpayers.
The taxation of dividends as ordinary income and at a top income tax rate of 39.6% and increase in the top tax rate applied to capital gains to 20%.
The increase in the 2.9% Medicare tax to 3.8% for high-income taxpayers and the application of the new 3.8 percent tax on investment income including flow-through business income, interest, dividends and capital gains.
With the combination of these tax changes at the beginning of 2013 the top tax rate on ordinary income will rise from 35% in 2012 to 40.9%, the top tax rate on dividends will rise from 15% to 44.7% and the top tax rate on capital gains will rise from 15% to 24.7%.
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This report finds that these higher marginal tax rates result in a smaller economy, fewer jobs, less investment, and lower wages. Specifically, this report finds that the higher tax rates will have significant adverse economic effects in the long-run: lowering output, employment, investment, the capital stock, and real after-tax wages when the resulting revenue is used to finance additional government spending.
“The American Job Machine Has Jammed” And Has Settled Into A “Summer Slump For The Third Year In A Row.” “The American job machine has jammed. Again. The economy added only 80,000 jobs in June, the government said Friday, erasing any doubt that the United States is in a summer slump for the third year in a row.” (Paul Wiseman, “US Economy Adds 80,000 Jobs In Another Weak Month,” The Associated Press, 7/7/12)
“The Weakest Job-Adding Quarter In Two Years…” CNBC’s JOHN HARWOOD: “Just 80,000 jobs added in the month of June, Michelle. 8.2% unemployment rate, unchanged, 12.7 million unemployed people, also unchanged. That makes the second quarter the weakest job-adding quarter in two years, an average of 75,000 jobs
added in the second quarter of this year.” (CNBC’s “Squawk Box,” 7/6/12)
CBS News: We Are Experiencing “The Worst Economic Recovery America Has Ever Had.” CBS’ SCOTT PELLEY: “Good evening. This is the worst economic recovery America has ever had. We’d been looking for hopeful signs, but today the chairman of the Federal Reserve threw a cold splash of reality on those hopes.”
Democrats and liberals are the absolute last that should be even thinking about economy. They're all for redistribution of wealth. Why should someone work for their money and livlihood when they can just sit back and collect various government benefits and suckle on the teet of the American people?
Democrats and liberals are the absolute last that should be even thinking about economy. They're all for redistribution of wealth. Why should someone work for their money and livlihood when they can just sit back and collect various government benefits and suckle on the teet of the American people?
We've tried the Republican way from 2000-2008 and it was a disaster. The Clinton/Democratic plan worked way better.
We've tried the Republican way from 2000-2008 and it was a disaster. The Clinton/Democratic plan worked way better.
Really? That Clinton/Democratic plan worked so well in creating the massive economic and housing bubble that proceeded to burst and bring on this disaster.
And what about King Obama and his economic plan? Oh wait, he doesn't have one.
Really? That Clinton/Democratic plan worked so well in creating the massive economic and housing bubble that proceeded to burst and bring on this disaster.
And what about King Obama and his economic plan? Oh wait, he doesn't have one.
Then how have we've gone from losing 700,000 jobs per month at the start of Obama's term to now we have gains each month?
Republicans and conservatives are the last people who should be lecturing anyone on economics.
I'm sure you and your ditzy-dreamer friends would see it that way, because economic conservatives are the only group who recognize the facts about which you remain in denial.
There wouldn't be too much trouble finding jobs for you -- the problem would be that you wouldn't like them since they would involve real honest labor.
I'm sure you think real work sucks, too, but like the coming of winter, the snake-oil peddlers can't legislate it away.
I'm sure you and your ditzy-dreamer friends would see it that way, because economic conservatives are the only group who recognise the facts about which you remain in denial.
There wouldn't be too much trouble finding jobs for you -- the problem would be that you woldn't like them since they involve real honest labor.
Then how have we've gone from losing 700,000 jobs per month at the start of Obama's term to now we have gains each month?
The only reason there are "gains" is because more and more people continue to fall off the rolls of unemployment. Why hasn't Obama reduced unemployment to the numbers he promised prior to being elected? Oh, I remember, because he hasn't kept ANY of his election promises.
We've tried the Republican way from 2000-2008 and it was a disaster. The Clinton/Democratic plan worked way better.
By chance, can you elaborate which "plan" you're referring to? Was that before or after the GOP's "Contract With America?"
Clinton was the President. His plan could **only** be the plan put before him by Congress.
You should clarify.
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