The Wall Street Journal reports:
As the big tax increase day of January 1, 2011 approaches, the Democrats running Congress are beginning to lay out their priorities. Get ready for bigger rate increases than previously advertised.
Last week the Senate Budget Committee passed a fiscal 2011 budget resolution that includes an increase in the top tax rate on dividends to 39.6% from the current 15%—a 164% increase. This blows past the 20% rate that President Obama proposed in his 2011 budget and which his economic advisers promised on these pages in 2008.
There's more:
And that's only for starters. The recent health-care bill includes a 3.8% surcharge on all investment income, including dividends, beginning in 2013. This would nearly triple the top dividend rate to 43.4% in Mr. Obama's four years as President. We suppose the White House would call this another great victory for income equality.
But the driving impulse here isn't equity. It's money. According to the static revenue estimation rules that Congress lives by, maintaining the current 15% tax rate on capital gains and dividends will "cost" the government $347.7 billion over 10 years. The Congressional Budget Office hasn't broken out how much the higher 39.6% dividend rate alone would yield in revenue, but a reasonable guess is $200 billion. Congress simply wants that cash.
When Obama
endorsed socialist Bernie Sanders and talked about change, he wasn't kidding.
