Lawrence Kudlow‘s latest column puts President Obama’s budget plan under the microscope.
Layer upon layer of tax hikes are piled on successful investors, small-business owners and corporations.
The capital-gains tax goes from 15 percent to 24 percent (including Obamacare). The dividends tax goes from 15 percent to nearly 40 percent, and that’s not including the double tax on corporate profits embodied in dividends and capital gains. The Bush tax cuts for top earners are repealed.
There’s the 30 percent Buffett-rule minimum tax on millionaires. The carried-interest tax for private equity, hedge funds and other investment partnerships goes from 15 percent to 39.6 percent. The estate tax jumps to 45 percent. State and local bond interest deductions are severely limited. Oil and gas companies get hit. So do banks. And there’s probably more stuff in there I haven’t read yet. Paul Ryan’s press release calls it a $1.9 trillion tax hike, with $47 trillion in government spending over the next decade and the fourth straight year of trillion-dollar deficits.
Some kind of corporate tax reform may be released in a few weeks. But we don’t know much about it. And while it may lower the top rate, it’s going to penalize U.S. firms operating abroad by roughly $150 billion in tax hikes. All in all, the Obama budget raises corporate taxes by $350 billion. Just what business does not want or need. …
… There is no $4 trillion in new deficit savings, because $1.2 trillion was already scored by the supercommittee. Plus, another $1 trillion was already counted as savings from the wind-downs in Afghanistan and Iraq. And $800 billion comes from interest savings, not program cuts.
So maybe there’s $1 trillion in spending reduction over 10 years. But as the details trickle out, that’s a big maybe. Compare that to $47 trillion of total spending increases and at least $1.5 trillion of tax hikes.