The marriage penalty will be reinstated, the child tax credit will be cut in half, the death tax rate will be as high as 55 percent, the capital gains tax rate will rise from 15 percent to 23.8 percent, and the top dividends tax rate will rise from 15 percent to 43.4 percent. In addition, the Obamacare Medicare payroll tax increase takes effect Jan. 1, climbing from 2.9 percent to 3.8 percent for those with income exceeding $200,000 (or $250,000 for married couples).
The combined impact of all taxes scheduled in January is nearly $500 billion. The Congressional Budget Office predicts a recession will occur as a result.
Obama and congressional Democrats claim they want to prevent tax increases for lower-income families and only want to “tax the rich.” That would make a bad situation only slightly less dire. Hiking taxes on upper incomes, capital gains and dividends will hammer job creators. The perverse incentives of Obama's tax policy will cause many entrepreneurs to limit their exposure. The end result will be fewer jobs and less opportunity for all.
To avoid paying a few bucks extra for cigarettes, smokers will substantially alter their behavior. What does the president think rational business owners will do when facing billions in new taxes?