The Absurd Report

Presidential hopeful Senator Barack Obama (D–Ill.) has unveiled his economic plan of raising taxes on the successful. His plan would boost the top marginal rate to well over 55 percent—before the inclusion of state and local taxes—resulting in many individuals seeing their marginal tax rate double. The consequences of this policy would be a return to the bad old days of tax avoidance, with taxpayers disguising personal income as business income or capital gains and the migration of capital from the United States to abroad.

Among the more prominent elements of his tax proposal, Senator Obama would end the Bush tax cuts and allow the top two tax rates to return to 36 and 39.6 percent. He also would allow personal exemptions and deductions to be phased out for those with income over $250,000. The real kicker, though, is that Senator Obama would end the Social Security payroll tax cap for those over $250,000 in earnings. (The cap is currently set at $102,000.) These individuals will then face a tax rate of 15.65 percent from payroll taxes and the top income tax rate of 39.6 percent for a combined top rate of over 56 percent on each additional dollar earned.

High-income individuals will be forced to pay even more if…

Read more from The Heritage Foundation

Obama Will Tax More Than Just the ‘Rich’ by James Pethokoukis

Let’s be clear: If Barack Obama is elected, everyone who has an investment will face higher taxes because Obama and an overwhelmingly Democratic Congress will raise the rate on capital gains. There is also a “hidden tax” that will come from the depressing effect on stock prices. (And does anyone think higher cap-gains rates are just what the housing market ordered?) But Stanford Group policy analyst Greg Valliere thinks income tax rates could be going up higher than expected and affect more than just the so-called rich: