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The fiscal-cliff negotiations seem to be foundering on Barack Obama’s insistence on higher tax rates on high earners and House Republican leaders’ insistence on opposing them. The president believes he has a mandate from voters for his position, and House Republicans believe they have a mandate from voters for theirs. The real argument here is over the size and scope of government. Under Barack Obama, federal outlays — the technical term for federal spending — have increased to over 24 percent of gross domestic product. That’s a higher level of federal spending than in any year since 1946, when we...

The fiscal cliff negotiations seem to be foundering on Barack Obama's insistence on higher tax rates on high earners and House Republican leaders' insistence on opposing them. The president believes he has a mandate from voters for his position, and House Republicans believe they have a mandate from voters for theirs. The real argument here is over the size and scope of government. Under Barack Obama, federal outlays -- the technical term for federal spending -- have increased to 24 and 25 percent of gross domestic product. That's a higher level of federal spending than in any year since 1946,...

US President Barack Obama has said in an interview that he would consider lowering top tax rates as part of a wider reform of the tax code in 2013. The White House also signalled that it might agree to increase taxes for the wealthiest earners to less than 39.6%. Spokesman Jay Carney left open the option that rates would not have to rise to that Clinton-era level. Lawmakers are deadlocked in efforts to avert steep spending cuts and tax rises due to take effect on 1 January. Mr Carney said the "major obstacle" in reaching an agreement was a Republican...

Democrats have said that that their priorities when it comes to a fiscal cliff deal are to raise more tax revenue and make the tax code more progressive. Which is why it's odd to see them drawing a line in the sand on raising tax rates. Raising marginal income tax rates is one of the most economically harmful ways to raise taxes. (The only provisions of the tax code that are more damaging are the corporate income tax and taxes on savings and investments.) Perhaps the only explanation is that Democrats don't actually care about how to efficiently accomplish their...

The conventional wisdom has emerged that in order to avoid the so-called "fiscal cliff," politicians in Washington must agree to some method of tax increases ("revenue") -- which will be real, even if low taxes are not the cause of our ills -- alongside some kind of promise of spending restraint on entitlement programs, which is our problem, and which no one believes Washington will restrain. The American left and our "objective" journalists -- same thing, I know -- are not helping the nation balance its budget. As usual, these partisan hacks are obsessed with tearing the Republican coalition apart,...

If everyone in America had read Stephen Moore's new book, "Who's The Fairest of Them All?", Barack Obama would have lost the election in a landslide. The point here is not to say, "Where was Stephen Moore when we needed him?" A more apt question might be, "Where was the whole economics profession when we needed them?" Where were the media? For that matter, where were the Republicans? Since "Who's The Fairest of Them All?" was published in October, there was little chance that it would affect this year's election. But this little gem of a book exposes, in plain...

How Lower Top Marginal Rates Let The Economy Grow (or “The Monkey In Your Pocket”)Taxes are like a monkey in your pocket. Whenever you get paid, the monkey immediately grabs a cut. Whatever amount you think you need—whether just to meet obligations, or to reach your dreams—you have to earn more to feed the monkey first. And the monkey keeps tabs on your total for the year, grabbing a bigger piece as the total goes up. If you make enough, the monkey transmogrifies into a gorilla on your back, grabbing half of every dollar for federal taxes alone.* Why does...

I’ve shared evidence from around the world (England, Italy, the United States, and France) and from various states (Illinois, Oregon, Florida,Maryland, and New York) to argue that it is foolish to ignore the Laffer Curve. Not that it makes any difference. I’m slowly coming the conclusion that my friends on the left will never learn – in large part because they’re more interested in punishing success with class warfare tax policy than they are in collecting extra revenue for government.But surely there are some statists who are motivated by emotions other than spite, so I refuse to give up. Let’s look at some evidence from...

Senate Democrats balk at ending Bush-era tax rates for wealthyBy Alexander Bolton - 06/19/12 05:00 AM ET A growing number of Senate Democrats are signaling they are not prepared to raise taxes on anyone in the weak economy unless Congress approves a grand bargain to reduce the deficit. At least seven Democratic senators have declined to rule out supporting a temporary extension of the Bush-era income tax rates, breaking with party leaders who have called for letting the rates expire for people earning more than $1 million per year. That gives Senate Republicans a chance to push a temporary extension...

If you haven't seen it, here's an eye opening chart from Goldman's Alec Phillips: Goldman Sachs For top earners, the tax rate on dividends is going to hit 43.4% if there are no changes in the current law. There are many layers to this whole "fiscal cliff" drama. The spending cuts are just one, but the potential hits to the economy are numerous, and this is just one example. Ultimately, says Philips: The most likely scenario in our view is an extension of these investment-related tax rates along with other expiring tax provisions into mid-2013, at which point broader reform...

President Barack Obama has gotten a lot of mileage out of touting his “Buffett Rule” to force millionaires to pay more in taxes. Maybe he thinks earning three-quarters of a million gives him a free ride. . .

With his corporate tax reform “framework,” President Obama today added another element to his ultimately harmful economic agenda. Previously announced anti-growth policies include massive budget deficits, a huge tax hike on individuals and small businesses in 2013, and his proposal to nearly triple the dividend tax rate. His new proposal starts strong by reducing the federal corporate income tax rate to 28 percent from the current 35 percent. This is a good and long-overdue policy change. Regrettably, he marries rate reduction to a net corporate tax hike based in part on extending his policy to hammer and ultimately deconstruct U.S....

So Mitt Romney thinks his effective tax rate is about 15%. That prompts many people to express disbelief: "What?! Most people pay a higher rate than that, don't they?" ,,,, But assuming he's correct, here's why his effective rate is probably higher than most people's: The effective tax rate is always going to be lower than one's top income tax rate. And the top rate for roughly four-fifths of Americans is 15% or less, said Roberton Williams, a senior fellow at the Tax Policy Center. In other words, 80% of Americans have an effective rate below 15%.

– War on Taxes: 1964 to 2011– By: Larry Walker, Jr. –"The largest single barrier to full employment of our manpower and resources and to a higher rate of economic growth is the unrealistically heavy drag of federal income taxes on private purchasing power, initiative and incentive." ~John F. Kennedy, Jan. 24, 1963, special message to Congress on tax reduction and reform From Taxing the Rich Recap: 1776 to 1912In 1765, Great Britain imposed a series of taxes upon the American Colonies, in order to pay for its lengthy French and Indian War (1754-1763). After the war, the British forced...

Typical of The Palm Beach Post, the newspaper ran an article recently by Laura Green on Warren Buffett’s continuing rant that his taxes are too low (“Warren Buffett pushes higher tax rates, but some doubt those would be right or beneficial”). Contrary to the headline, which sounds as though the writer would quote a number of people who disagree with Mr. Buffett, Green quotes a grand total of one local entrepreneur who thought she was “being penalized for working hard or succeeding." She also included a substantial rebuttal by a local CPA who thought higher tax rates would not keep...

  The once moribund Senate “Gang of Six” regained new life Tuesday after Oklahoma Sen. Tom Coburn unexpectedly rejoined the group — and more senators are now coalescing around a new proposal that would cut the debt by as much as $3.7 trillion over the next decade. Other top senators are also getting behind the plan, including Sen. Lamar Alexander (R-Tenn.), the No. 3 Senate Republican, who told a group of senators Tuesday he would back the Gang of Six’s proposal, sources say. The fast-moving developments mean that elements of the proposal could influence the stalled talks to raise the...

President Obama and Democrats are big proponents of raising taxes on the rich in order to generate revenue for their out of control spending practices. However, very few people seem to know that the top 10% of wage earners already pay a whopping 68% of taxes. In a mission to see how popular the idea of taxing the rich actually is, Dan Joseph hit the streets of Alexandria, VA to talk to some people. He also quizzed them on our current tax rates. Here's what he found...

There’s an informative story in the paper that concluded corporations are encouraged by the tax code “to stash hundreds of billions in profits overseas…” Gee, who would have guessed? Of 25 Orange County-based California corporations, “most pay less than the official rate, sometimes far less.” We’ve made the case for years that when taxes are raised on corporations, the outcome is predictable . . .

The United States' current corporate tax rate is far from competitive. Average combined state and federal corporate taxes are 39.2 percent, second highest among industrialized nations, just under Japan's 39.5 percent rate. But this positioning is about to change. On December 16, 2010, Prime Minister Naoto Kan approved a five percent cut on Japan's corporate tax, lowering the rate to under 35 percent. Iceland's corporate tax rate currently stands at 18 percent; Poland 19 percent; Sweden 25 percent; and Mexico 28 percent. Overall, the average corporate tax rate among OECD nations hovers around 27 percent, with the United States a...

The extension of the Bush tax rates (what the media is now calling Obama's tax cuts) is a victory for Conservatives that should not be squandered. The Obama tax cuts are neither Obama's--they are Bush's--nor are they tax cuts--they are an extension of the current rates that were set to expire on 12/31/10. But the claim of the Democrats that these extensions had to be made because raising taxes on Americans in this economy would be disastrous is a true victory for Conservatives. It is also sound fiscal policy and should be capitalized on. An editorial in today's Wall Street...