Investors Flee From 'Change' Obama Hypes

Obama's proposed tax increases are adversely affecting our financial markets.

With the bottom 40% of income earners not paying any federal income taxes, such tax credits would not reduce any tax liability for these workers. Instead, since they're refundable, they would involve new checks from the federal government.

These are not tax cuts as Obama is promising. They are new government spending programs buried in the tax code and estimated to cost $1.3 trillion over 10 years.

Obama argues that while these workers do not pay income taxes, they do pay payroll taxes. True, but his planned credits do not involve cuts in payroll taxes. They are refundable income tax credits designed to redistribute income and "spread the wealth."

Meantime, Obama has proposed effective tax increases of 20% or more in the two top income-tax rates, phasing out the personal exemptions and all itemized deductions for top earners, as well as raising their tax rates.

He wants a 33% increase in the tax rates on capital gains and dividends, an increase of 16% to 32% in the top payroll tax rate, reinstatement of the death tax with a 45% top rate, and a new payroll tax on employers estimated at 7% to help finance his health insurance plan. He's also contending for higher tariffs under his protectionist policies.

Finally, he would increase corporate taxes by 25%, though American businesses already face the second-highest marginal tax rates in the industrialized world, thus directly harming manufacturing and job creation while weakening demand for the dollar.

Obama argues disingenuously that his tax increases would only affect higher-income workers and "corporate fat cats." But it is precisely these top marginal tax rates that control incentives for savings, investment, entrepreneurship, business expansion, jobs and economic growth. While he wants to tax the rich, the burden will fall on the poor and the middle class.

In their new book, "The End of Prosperity," Art Laffer, Steve Moore and Peter Tanous argue that the threat of this tax tsunami is already destabilizing our financial markets and causing capital flight from America...

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