That's what Larry Kudlow says.
Raising the marginal tax rate on successful earners, capital, dividends, and all the private funds is a function of Obama’s left-wing social vision, and a repudiation of his economic-recovery statements. Ditto for his sweeping government-planning-and-spending program, which will wind up raising federal outlays as a share of GDP to at least 30 percent, if not more, over the next 10 years...
Study after study over the past several decades has shown how countries that spend more produce less, while nations that tax less produce more. Obama is doing it wrong on both counts.
And as far as middle-class tax cuts are concerned, Obama’s cap-and-trade program will be a huge across-the-board tax increase on blue-collar workers, including unionized workers. Industrial production is plunging, but new carbon taxes will prevent production from ever recovering. While the country wants more fuel and power, cap-and-trade will deliver less.
The tax hikes will generate lower growth and fewer revenues. Yes, the economy will recover. But Obama’s rosy scenario of 4 percent recovery growth in the out years of his budget is not likely to occur. The combination of easy money from the Fed and below-potential economic growth is a prescription for stagflation. That’s one of the messages of the falling stock market.
Many on the Left are hailing the notion of bigger government and punishing business. They argue that taxing businesses and making it harder for them to operate won't affect workers. They think carbon taxes, which will push up operating costs, won't cause businesses to move to countries like China and India, who don't operate by those rules.
But the fact is that taxing business owners--such as the tax hikes Obama promotes against those making $250,000--will affect workers. Small business owners, who drive the U.S. economy, will shut down operations, fire workers or grow much more slowly. When taxes rise, those being taxed start looking for ways to avoid the taxes. That means the only people who get employed are accountants, who will help build tax shelters and move assets offshore.
The economy will recover, but the costs we will pay will be massive.
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