A new study has come out which tells us what we already know.... unless, of course, your name is Barack Obama. If taxes are raised, job creation goes down. Jobs are lost. As the study points out, if Obama's tax plan is implemented and his class warfare tactics are allowed to succeed, all major economic indicators will go the wrong way.
The study, from Ernst & Young, and a collection of pro-business groups that includes the National Federation of Independent Business and the U.S. Chamber of Commerce, looked at the impact of raising taxes on capital gains and dividends and hiking the top two individual tax rates to 36% and 39.6% respectively. It also included the tax hikes for health-care reform.
It said all of the hikes combined would cause output to fall by 1.3% and capital stock and invetsments to fall by between 1.4% to 2.4%. It said employment "in the long run" would fall by .5%, or by about 710,000 jobs. Wages would fall 1.8%.
"This report finds that these higher marginal tax rates result in a smaller economy, fewer jobs, less investment, and lower wages," the report stated.
The Business Journals also reviewed the Ernt and Young research and notes that it's not only income taxes that will go up.
About 900,000 business owners are in the top two income tax brackets, the study found. Tax rates for these brackets are scheduled to increase next year from 33 percent to 36 percent, and from 35 percent to 39.6 percent, respectively. But these taxpayers face other tax increases as well: higher tax rates on capital gains and dividends, an increase in the 2.9 percent Medicare tax to 3.8 percent for high-income taxpayers, a new 3.8 percent tax on investment income; and the reinstatement of limits on itemized deductions for wealthy Americans.
The combination of these tax hikes would increase the top individual income tax rate on business income from 35 percent to 44.7 percent next year, the study found.
All in all, it means more money out of the private sector, fewer jobs, and more power and control to government.