HOW OBAMA'S TAX HIKES AFFECT YOUR BOTTOM LINE

In 1819 Chief Justice John Marshall stated, “An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation.”

With the Obama tax hikes, we are fast approaching that limit.

The Heritage Foundation’s Center for Data Analysis has compiled statistics demonstrating the catastrophic implications of this tax increase as the economy struggles to recover. In 2011, the first year of the new tax rates, the tax hikes will result in an estimated 238,000 fewer jobs and $40 billion less in total GDP. Fast forward to 2016, five years after the tax hikes: there will be over 800,000 jobs lost and a $135 billion loss to GDP in that year alone.

The Obama tax hikes will not just hurt the “wealthy,” as progressives would have you believe. The new tax rates will have a ripple effect throughout the entire economy.

• Mississippi, which has the lowest average household income in America, will lose 5,911 jobs annually, and each household will have $1,818 less in personal disposable income.
• Maryland, which has the highest-earning households in the United States, will lose an average of 13,983 jobs annually and will have $6,848 less in personal disposable income.

The Heritage Foundation has also measured the impact of the Obama tax hikes on individual states and Congressional districts. Find out how the tax hikes affect you and your family on Heritage.org.

Liberals often call the Obama tax hikes an end to “the Bush tax cuts for the wealthy.” This is a fallacy that the Left has created in order to disguise the truth: taxes are increasing for the people and businesses that are creating jobs during a massive recession

In a piece on National Review Online’s The Corner, Heritage’s JD Foster explains:

More importantly for getting the economy kick-started, those higher rates will fall on the gazelles, those small businesses ready and able to grow rapidly — if they have the incentives, and if they have the cash. Higher tax rates on the gazelles, those small businesses that really matter to job creation, weaken incentives and drain cashflow. Higher tax rates on the gazelles are a real kick in the teeth.

“The average non-farm small business filing through the individual income tax code would see a tax increase of about $3,500,” the Center for Data Analysis report found. “Not only successful businesses would be hurt, although they would be hurt the most. Even firms with losses could face a tax increase, for example on capital gains, dividend, or carry-over income.”

Most economists agree with the Heritage Foundation’s findings. In a new poll conducted by CNNMoney.com, 60 percent of economists favor a continuation of tax rates as they currently stand.

Sen. Joe Lieberman (ID-CT) put it well in a speech to the Stamford Chamber of Commerce: “The surest way for Congress to help bring about a double-dip recession is to allow taxes to be raised on anyone during this uncertain economy we are struggling through.”

Heritage’s Center for Data Analysis has proven that “if the price of capital and labor increases through a tax increase, the pace of economic activity will slow down.”

They suggest another plan, whereby Congress will not raise taxes but will instead rein in its overspending to offset the enormous deficits their liberal policies have created.