Republicans Should Capitalize on Obama Budget to Nowhere

Class warfare has become a central theme of the Obama campaign.  In his 2013 budget released earlier this week, President Obama proposed major tax hikes on the wealthiest Americans – those making $200,000 per year or families making over $250,000.  Indeed, the “debt reduction” that the president claims is dependent largely on these tax increases alone. Class warfare and raising taxes on the rich may be beneficial to his political campaign, but it is bad for the economy as it merely redistributes wealth, not create it.  The Republican nominee needs to be committed to capitalism and battle the President’s class warfare, big government, Keynesian economic rhetoric using free-market principles, stressing economic growth, job creation, and wealth creation through lower taxes, less regulation, and smaller government.  Despite what the President claims, his budget does not promote growth and has the potential to be a weak spot that Republicans can capitalize on.

Included in the President’s proposal is around $1.5 trillion in new revenue coming from tax hikes on the wealthy and corporations.  These tax raises take various forms; a 9% raise in capital gains tax rates, the dividends rate jumps 25% from 15-40%, the carried interest tax on investment partnerships rise from 15 to 39.6%, and the estate tax rises to 40%.  In addition, the budget calls for allowing the Bush-era tax cuts to expire, raising the top-level income tax rates to 39.6%.  Then there’s the new “Warren Buffet Rule“, which requires all those making more than $1 million per year pay at least 30% of their gross income in taxes.

English: President Barack Obama signs the Tax ...

Obama signing The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

Perhaps the most damning, however, is the tax hike on businesses; Obama has yet to announce his new corporate tax rates, but included in the budget is a “financial crisis responsibility fee” on large banks that amounts to $61 billion, taxing energy companies $30 billion over a decade by ending tax cuts, $148 billion in new taxes on multinational corporations, and another $87 billion by changing how businesses value their inventory. Continue reading

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