The gamble is that increasing tax rates on the wealthy will not cause them to alter their behavior to avoid the increased tax expense and as a result, will result in much greater tax receipts. I think most Americans assume that the wealthy are paying less taxes under Bush.
But that’s not the reality. While Bush did cut their rates, the effect was to increase the their share of federal tax receipts. In fact, the top 5% are paying a greater share of taxes now under Bush than under Clinton.
Hard to believe right. To paraphrase AMEX commercials, ‘populism’ [lying to the willfully ignorant], has its rewards. If you still want to believe in Santa, you might want to avoid these US House of Representatives reports on who actually pays federal taxes – top 1% and progressivity of tax system. Also, check out the Bloomberg.com article which also documents how progressive the actual tax system is, as opposed to the populist perception.
Markets are not politically correct. What they care about are the likely tax and spending policies for the next American president. No serious person believes the Obama campaign claim about excluding 95% of Americans from tax increases. So among the many negative factors affecting the market, are the expectations of widespread increases in taxes, which during a recession is considered a mistake. Unfortunately, campaign tactics hold no sway here, i.e. ACORN can’t recruit citizen-prostitutes to enhance or alter market results, George Soros notwithstanding.