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Not Even the Dead Escape Dean's Massive Tax Hikes

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  • Not Even the Dead Escape Dean's Massive Tax Hikes

    Take a Hike

    Howard Dean wants to raise your taxes, whether you're dead or alive.

    BY STEPHEN MOORE
    Friday, January 2, 2004 12:01 a.m. EST

    The Democratic Party appears to be on an irreversible course to nominate Howard Dean as its candidate for the presidency. Yet while voters in Iowa and New Hampshire may have heard a thing or two about Mr. Dean's economic policies, most Americans have not. Indeed, most voters are unaware that the former governor of Vermont has a plan to raise income taxes on every single American who pays them.

    Recently, an organization I run, the Club for Growth, began airing TV ads in Iowa and New Hampshire telling voters about the specifics of Mr. Dean's tax proposals. The Dean plan, our ad notes, would raise taxes by $2,472 a year on a typical middle-income family of four. Mr. Dean would also raise the death tax rate, the capital gains tax rate, the dividend tax rate and the payroll tax, and he would bring back the hated marriage tax penalty that President Bush abolished this year. There is hardly a tax levied at the federal level that Howard Dean would not raise.

    And although the Dean campaign has howled in protest over this ad--and has spent hundreds of thousands of dollars to rebut it with TV ads of its own (which mostly change the subject)--what it cannot deny is that these are precisely the economically destructive changes to the tax code we would see under a Howard Dean presidency. In fact, unlike some recent presidential candidates, Mr. Dean doesn't bother to conceal his plans to raise taxes, he revels in telling America about it.

    In the ad, we maintain that Mr. Dean's economic agenda is reminiscent of such unforgettable recent Democratic presidential failures as George McGovern, Walter Mondale and Michael Dukakis. We're willing to admit that this may be a bit unfair. In fact, Messrs. McGovern, Mondale and Dukakis might have reason to complain, because none of them proposed economic policies that would tilt the Democratic Party as far to the left as Mr. Dean has.

    Mr. Dukakis, who was ridiculed by Republicans mercilessly as a tax and spender from "Taxachusetts," pledged to voters that he would raise taxes "only as a last resort." Mr. Dean promises new taxes as a first resort. And he would raise them on virtually everyone who has a job and an income tax liability--not just on the "evil rich" Wall Street tycoon, but even on the man who shines his shoes. In fact, I recently analyzed IRS tax data released by the Treasury Department to estimate the impact of the Dean tax on family finances. I found that Mr. Dean's plan would force roughly two million low-income working Americans--that's roughly three times the population of the state of Delaware--who don't pay any income taxes now, to start paying them. This is the candidate who says he's going to be the voice of the little guy in Washington.





    When it comes to taxes, Mr. Dean thinks really big. In raw numbers, the Dean tax proposal would raise taxes on 109 million Americans by roughly $1.5 trillion over the next 10 years. This comes out to a Dean tax of about $15,440 for every family of four in the U.S. over the next decade. The Dean tax rule of thumb is that if you are in the middle class, he would roughly double your federal income tax payments.
    Dean's Greedy Hand
    Current Dean tax
    Capital gains tax 15% 20%
    Dividend tax 15% 39.6%
    Income tax rate (highest) 35% 39.6%
    Income tax rate (middle) 25% 28%
    Income tax rate (lowest) 10% 15%
    Per child credit 10% 15%
    Marriage penalty Eliminated Reinstated
    Death tax in 2010 0 55%
    Source: Club for Growth

    Let's look at real-life examples of what the Dean tax might mean for you. Under current law, a married couple with one child and a $40,000-a-year income pays income taxes of $1,503. Under the Dean tax, that family would pay $2,935--or just about double. For a family with two kids and an income of $80,000 a year, the extra Dean tax costs $1,780 a year. What Mr. Dean has never had to answer to in the Democratic primary, perhaps because the other candidates are too embarrassed to ask, is how a presidential contender whose campaign is dedicated to relieving the economic squeeze on working class families, believes that socking these folks with a $1,400- to $1,800-a-year tax hike will make their financial situation less stressful.

    Mr. Dean responds to these charges by countering that his plan will help restore prosperity and produce higher incomes and more jobs. But how exactly? His tax plan would be the equivalent of hitting small businessmen, who create about 70% of the jobs, over the head with a two-by-four. The highest tax rate under the Dean plan rises from 35% to 39.6%. Add on top of this perhaps the most insidious feature of the Dean tax. For the first time ever, he would eliminate the cap on payroll taxes. Henceforth, all income of more than $87,000 a year would pay a 15% payroll tax. This means the Dean tax plan raises the small-business tax rate from 38% to 55%. If you are a self-employed worker with an income of $125,000 a year, which in high-cost-of-living states like California and New York is hardly rich, Howard Dean wants to raise your taxes more than $8,000. That will create jobs?

    When President Bush cut taxes this past year, one of the most immediately visible happy results was that the dividend and capital gains tax cuts helped boost the stock market by between 10% and 15%. The after-tax rate of return on corporate profits increases with a lower capital gains and dividends tax, so stock values predictably rise. Just since the Bush tax cut, the increased valuation of the stock market has increased the net wealth of American households by more than $1 trillion, according the American Shareholders Association. Repealing those tax cuts would impel the market to surrender those higher share prices. Since half of American households now have their savings stored in stocks, this market give-back also will put a severe dent in family finances. So the Dean tax is a double whammy on households: It reduces their after-tax income and reduces their wealth.

    Of course, by reinstating the marriage penalty and bringing back to life the death tax permanently, Mr. Dean's tax proposal would add greatly to the complexity of the tax code. By raising income tax rates by roughly five percentage points on everyone and by calling for a more than doubling of the dividend tax, he sends us back toward the era of punitive double and triple taxation of saving and investment income. In many ways then, the Dean tax is "the anti-flat tax." It gives us higher tax rates and more IRS complexity, and requires several million more families to file IRS 1040 returns every year.

    If the Democrats do indeed nominate Mr. Dean and make the Dean tax the underlying economic message of their party, that would be good news for Republicans, but awful news for sound economic policy making in Washington. It will signal once and for all that the Democrats have gone off the deep end on economics and no longer believe a word of John F. Kennedy's message of 40 years ago that higher tax rates "will never produce enough revenues to balance the budget, nor enough jobs" to put Americans back to work.
    Mr. Moore is president of the Club for Growth

    http://www.opinionjournal.com/editor...l?id=110004500

  • #2
    Well its quite simple really...the reason Dean's plan will work is that the solution to any economic problem is to give the government more money...we're all too stupid to know how to handle it on our own, so we should trust the government with it...this is the same government that was known to pay $500 for a wrench...yeah...they know what they're doing..

    I really liked how Dean's plan raised taxes on EVERYBODY...i mean, usually the Dems master plan is to raise taxes on the "evil Republicans who are being punished for being successful businessmen" and taking all the money from these tax hikes and giving them to the poor...Dean is definitely taking affirmitive action to the next level...he's an equal opportunity THIEF.

    A little off topic, my favorite example of the Dems theory of giving handouts to the poor is when last summer (I think) Congress was debating who to send these "refunds" on your income tax..it was part of Bush's tax cuts..basically, if you paid income taxes, you got a chunk of money back. The Dems problem with this is that the original plan excluded people who DID NOT pay income tax. Simple, right? If you don't pay income tax you don't get a break on that income tax. It wasn't simple to the Dems...to them it was just "another example of the rich Repubicans being unfair to the 'little guy'" The Dems wanted to give these people who DO NOT PAY income tax a break!!!...I fail to see the logic..do you?

    Comment


    • #3
      I fail to see the logic..do you?
      Thats because the dems have no logic, i say we run to the hills before they take over. Hopefully Bush will win 2004.

      Comment


      • #4
        There will be no need for 'hope'.
        Bush will win.
        Has no one seen the "Republican for Dean" material floating around.....?
        Its a spin or satire on Dean being a Republican "Dream come true"....

        Here's what Kennedy said on higher taxes:

        "that higher tax rates will never produce enough revenues to balance the budget, nor enough jobs to put Americans back to work."
        Link:
        http://www.house.gov/pitts/press/com...isingtaxes.htm


        Dean's plan is bogus and amounts to BS. Simply more "foot-in-the-mouth" disease/syndrome from the Democratic Camp of Disillusionment.
        The man ran Vermont, was responsible for its safe-guards and had the worst security rating of any state that has nuclear reactors in the US (Vermont Yankee facility)

        "AP: Dean Was Warned on Lax Vt. Security"
        Link:
        http://www.guardian.co.uk/uslatest/s...582653,00.html


        And this man is trying to become the next president and become the 'protector' of America and her people, etc.? I doubt it. :roll

        BTW.....anyone need more syrup for those "Vermont Waffles"?

        "Waffle Powered Howard"
        Link:
        http://www.wafflepoweredhoward.com/

        :evil:



        regards
        seekerof

        Comment


        • #5
          The dems dont say anything, "their just so mad taht they just fume"

          Comment


          • #6
            This man is the threat that Sen. McCarthy hunted for in vain all those decades ago.

            Too bad old Joe aint around now.

            Dean is everything that America should NEVER become.

            Socailist, elitist, and stupid.

            Comment

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