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Snow job

Stephen Moore wrote in the WSJ last week:

Perhaps there can still be a happy ending to this sad tale of U.S. decline. If there were ever a right time to trade in the junk heap of our federal tax code for a pro-growth Steve Forbes-style flat tax, now's the time.

What would prompt Mr. Moore to make such a preposterous suggestion?  Only this:

Media reports in recent weeks say that Senate Democrats are considering a 3% surtax on income over $1 million to raise federal revenues. This would come on top of the higher income tax rates that President Obama has already proposed through the cancellation of the Bush era tax-rate reductions.

If the Democrats' millionaire surtax were to happen—and were added to other tax increases already enacted last year and other leading tax hike ideas on the table this year—this could leave the U.S. with a combined federal and state top tax rate on earnings of 62%. That's more than double the highest federal marginal rate of 28% when President Reagan left office in 1989. Welcome back to the 1970s.

Read the rest for "the math behind that depressing calculation." 

This morning at Heritage:

The House GOP last week issued a proposal to spur job growth, including reducing regulation and taxes and promoting free trade – essentially aimed at making it easier for businesses to grow, thereby growing the economy and reducing unemployment. And, like clockwork, the left went on the attack claiming that it’s nothing more than “old ideas, fancy new clip art,” while the Times described it as “more of the same ‘fixes’ that Republicans always recommend no matter the problem.” Ironically, though, the left is calling for more of their same ideas – “government help” must come to the rescue, the Times says.

And how do they plan to pay for it? Higher taxes to finance more spending, with “a combined federal and state top tax rate on earnings of 62%.” The government needs to stay home. Brian Riedl explained why government intervention to boost the economy doesn’t work:

Removing water from one end of a swimming pool and pouring it in the other end will not raise the overall water level. Similarly, taking dollars from one part of the economy and distributing it to another part of the economy will not expand the economy.

Amazing how many people are snowed by the kind of "logic" Riedl is referring to.

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