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The revelation that tax increases could hurt the economy has recently been heard from Senators Evan Bayh of Indiana, Ben Nelson of Nebraska, and, most surprising, even from Kent Conrad of North Dakota. On a scale of unlikely events, this is like the Pope coming out against celibacy. As Senate Budget Chairman, Mr. Conrad has rarely seen a tax increase he didn’t like, but this week he averred that “As a general rule, you don’t want to be cutting spending or raising taxes in the midst of a downturn.”
Over in the House, Bobby Bright of Alabama even dared to defend the rich Americans who Democrats have been pounding for years. “I don’t care if it’s the wealthiest of the wealthy. You don’t raise their taxes,” he told The Hill newspaper. “In a recession you don’t tax, burden and restrict.” Better don the body armor on your next visit to the Speaker’s office, Bobby…
The reality is that the increase in the top marginal income tax rate to higher than 41% will hit the most profitable small businesses especially hard. That’s because millions of business owners pay individual rates under Subchapter S of the tax code. Today, this means they pay the same top rate as the Fortune 500: 35%. But if the 2003 tax rates expire, they’ll suddenly pay more than Goldman Sachs.
Over in the House, Bobby Bright of Alabama even dared to defend the rich Americans who Democrats have been pounding for years. “I don’t care if it’s the wealthiest of the wealthy. You don’t raise their taxes,” he told The Hill newspaper. “In a recession you don’t tax, burden and restrict.” Better don the body armor on your next visit to the Speaker’s office, Bobby…
The reality is that the increase in the top marginal income tax rate to higher than 41% will hit the most profitable small businesses especially hard. That’s because millions of business owners pay individual rates under Subchapter S of the tax code. Today, this means they pay the same top rate as the Fortune 500: 35%. But if the 2003 tax rates expire, they’ll suddenly pay more than Goldman Sachs.
