In last night’s State of the Union Address President Obama mentioned an aggressive tax proposal estimated by the White House to cost $320 billion over ten years. NTU President Pete Sepp offered the following statement in response:
“President Obama called for a massive new tax hike and spending package that could ultimately harm taxpayers at many levels, even as it’s being offered largely as an attempt to score partisan political points.
“Yet, because of the damage they would do to America’s taxpayers, these proposals must be taken seriously, regardless of whether they’re likely to get mired in Congress.
“His proposal would further increase the capital gains tax rate all the way to 28 percent. Yet, on the campaign trail President Obama said the rate did not need to rise higher than 20 percent.
“Obama may use the Reagan-era rate to justify his position, but this mistake hurt investment flexibility, and required President Clinton and a GOP Congress to reduce capital gains rates to 20 and 10 percent.
“This resulted in higher economic growth and stock prices (according to Standard & Poor’s) and 80 percent more revenue (according to economist Steve Moore).
“Additionally, Obama's costly tax credits for specific groups and activities are not meaningful middle class tax relief. Lowering rates across the board, simplifying the tax code, and reducing payroll taxes that take a chunk out of every paycheck would do more for workers struggling to get ahead.
“Though, in fairness his plan to consolidate education tax benefits is a step in the right direction. Why not try doing more, and in a way that does not cost other middle class taxpayers?
“The single "fairest" proposal to help middle class investors would be to allow taxpayers to account for inflation when they sell their assets, so they are not paying taxes on phantom gains – something the President might be able to do by executive order.
“Taxes are already well above average for higher income brackets according to the Congressional Budget Office, more taxes on these job creators will return less revenue than expected and do economic damage that affects all Americans.
“President Obama helped enact one of the largest tax hikes in American history just over two years ago; calling for more taxes of any kind is a sign of poor fiscal governance and an insult to taxpayers.”
National Taxpayers Union, “The Voice of America’s Taxpayers”, is a nonprofit organization working for lower taxes, smaller government, and economic freedom at all levels. More information on NTU’s work, is available at www.ntu.org.