Thursday, 02 Dec 2010 11:11 AM
By Grover Norquist
From the ATR website.
The Simpson-Bowles-Obama debt commission released version 2.0 of
their tax increase blueprint. It’s identical to the tax hike
released in November’s “chairman’s mark.” Below are the salient
details:
Massive and Permanent New Levels of Taxation:
- The plan scores out as a 9-year net tax hike of $1.133
trillion
- The plan seeks to raise the federal tax burden
permanently to 21 percent of GDP, up from the half-century
average of 18 percent of GDP. Federal taxes have never been
this high.
- Creates a tax-hike “trigger” in law. Tax hikes would be
automatic after 2013 unless the Simpson-Bowles-Obama tax
plan is implemented. There is no spending cut trigger.
- Support for this net tax hike plan violates the Taxpayer
Protection Pledge which has been signed by over 235
congressmen and 41 senators.
What Are the Tax Hikes, and What Will They Cost Taxpayers?
Personal Income Tax Hikes (Net tax hike of $785 billion plus
bracket creep of $96 billion):
- Broadens tax base by eliminating deductions and credits,
and lowers tax rates (but not enough to avoid a net tax
hike). Falsely calls these tax hikes “spending cuts.”
- Introduces partial “bracket creep” by slowing down
inflation index of tax brackets.
- Raises the capital gains and dividends tax rate from 15
to 23 percent.
Social Security Tax Hike (Net tax hike of $138 billion):
- 12.4 percentage point Social Security tax currently
applies to first $100,000 of wages and net self-employment
income. This would rise to the first $150,000 of such
income.
Gas Tax Hike (Net tax hike of $114 billion):
- $0.15 hike in the federal gas tax, creating a new
federal gas tax of $0.334 per gallon.
- This gas tax hike is $156 per year for a 20-gallon tank
filled weekly.
Death Tax:
- Creates a permanent death tax with a top rate of 45
percent and a $3.5 million exemption.
- There is no death tax in 2010.
Corporate Income Tax Hikes (Net tax hike included in personal
income tax hikes):
- Barely lowers highest corporate rate in the developed
world, from 40 to about 32 percent (including state
corporate taxes). That merely moves us from worst in the
developed world to fourth-worst, better only than Japan,
France, and Belgium.
- By getting rid of many energy-specific tax deductions
(LIFO accounting, Sec. 199 deduction, MACRS depreciation,
etc.) this corporate tax hike should hit energy consumers
and investors hardest of all.
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