OUR VIEW: Watch your wallet, the tax pitch is on

July 16, 2012
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When government coffers are flush, it’s hard enough to reduce taxes. With deficits, public worker layoffs and municipal bankruptcies, expect an all-out assault for higher taxes from a variety of jurisdictions.

The persistence of those demanding more taxes was typified by last November’s failed recession-era effort to raise Colorado property taxes and by a failed effort to impose a $1-per-pack tax increase on cigarettes in California, whose backers, despite losing by nearly 30,000 votes, now demand a recount.

The epitome of relentless demand for more taxes is the Affordable Care Act. What Congress and President Barack Obama promised was a penalty for not buying government-approved insurance, the U.S. Supreme Court says is a tax — actually a tax increase because it didn’t exist before. Obamacare bundles 20 new taxes, incredible in variety and ingenuity, ranging from disallowing previous deductions for charitable hospitals and tax increases on biofuel to taxing medical device manufacturers and a surtax on investments. Obamacare’s new taxes are listed at the website of Americans for Tax Reform: bit.ly/LGAD2d.

While critics say Obamacare may be history’s largest tax increase, there will be a comparable hit if the Bush-era tax cuts are allowed to expire Jan. 1.

The 10-percent income tax bracket would rise to 15 percent. The next four brackets each would increase 3 percentage points, and the top 35 percent bracket would go to 39.6 percent, according to Yahoo Finance. Taxes on capital gains and dividends would jump from 15 percent to 20 percent and 39.6 percent, respectively. The marriage penalty also would increase.

While it’s likely some Bush-era cuts will be extended, it’s not comforting to realize that a good result depends on Congress and a president. It was Congress and a president who elevated the taxes that the Bush-era cuts temporarily reduced. When those higher rates were imposed, Washington didn’t face a $15 trillion national debt and $1.4 trillion deficit, as it does now.

On California’s November ballot, voters will be urged to approve three tax increases, one on income taxes for high earners and sales taxes on everyone, another to increase income taxes on all and a third to increase taxes on multistate businesses.

All proposed tax hikes are portrayed as essential, “for the children,” or as a matter of public safety and other platitudes. Don’t fall for it. For views more in tune with taxpayers’ interests, check out the National Taxpayers’ Union www.ntu.org. — From the Orange County Register, a Freedom Communications newspaper.

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