In a late Wednesday column at the Politico, the online website's Steven Sloan wrote that Democrats might be done hiking tax rates, specifically "that they’ve exhausted their ability to raise taxes on the richest Americans by jacking up their rates." But it's clear in later segments of his write-up that Democrats still want to go after "loopholes" and deductions, meaning that they still want to see effective marginal rates -- the ones which motivate high income earners' decisionmaking -- to get "jacked up." Such moves would also mean that the tax owed on a given amount of gross income would go up; i.e., they would be tax increases.
In suport of his misdirecting premise, Sloan quoted many Democrats, but somehow forgot to include Democratic President Barack Obama's stated position after the fiscal cliff mess concluded. In a video for supporters, as relayed by Joel Gehrke at the Washington Examiner, Obama didn't budge from using the same language he has used all along to justify tax increases. Gehrke's accurate headline captures the essence (video is at link; bolds are mine throughout this post):
Story Continues Below Ad ↓
Obama: We raised taxes, but the rich still aren’t paying their fair share
President Obama cut a video, distributed by his reelection, to reiterate his belief that the wealthiest Americans still aren’t paying their “fair share” of taxes and to outline a second-term agenda ranging from environmental policy to gun control.
Obama started by celebrating the tax increases — “making our tax code more progressive than it’s been in decades,” he said — that will take place because of the fiscal cliff deal.
“Obviously, there is still more to do when it comes to reducing our debt,” Obama said in the video. “And I’m willing to do more, as long as we do it in a balanced way that doesn’t put all the burden on seniors or students or middle class families, but also asks the wealthiest Americans to contribute and pay their fair share.”
Obviously, based on what Obama said, "the rich" still won't be paying their share even with the fiscal cliff bill which just passed.
A Wall Street Journal editorial which appeared in yesterday's print edition correctly pointed out that marginal tax rates will be well over 50% for many Americans with the deal just completed:
As for small business, the overall tax increase this year is substantial. The new listed top rate of 39.6% doesn't include the phaseout of deductions that will take the actual rate to 41% or so for many taxpayers. Add the ObamaCare surtaxes on investment income (3.8%) and Medicare (0.9%), as well as the current Medicare tax of 1.45% (employee share), and the real top marginal tax rate on a dollar of investment income from a bank savings or money-market account will be about 46%. Throw in state taxes, and the marginal rates in many places will be in the mid-50%-or-higher-range.
If future legislation phases out more deductions at higher income levels, the marginal rate of taxation within the phase-out-ranges will be even higher.
Sloan's headline, instead of reading "Dems done hiking tax rates?" should really have read: "They don't think they're done yet."
Cross-posted at BizzyBlog.com.