The 70% Tax Rate Cometh

The WSJ points out that the Obama tax increases will likely be well higher than those under even Bill Clinton.

Here's the ugly income-tax math. First, Mr. Obama has promised to let the lower Bush tax rates expire after 2010. This would raise the top personal income tax rate to 39.6% from 35%, and the next rate to 36% from 33%. The Bush expiration would also phase out various tax deductions and exemptions, bringing the top marginal rate to as high as 41%.

Then add the Rangel Surtax of one percentage point, starting at $280,000 ($350,000 for couples), plus another percentage point at $400,000 ($500,000 for couples), rising to three points on more than $800,000 ($1 million) in 2011. But wait, there's more. The surcharge could rise by two more percentage points in 2013 if health-care costs are larger than advertised -- which is a near-certainty.

States have also been raising their income tax rates, so in California and New York City the top rate would be around 58%. The Tax Foundation reports that at least half of all states would have combined state-federal tax rates of more than 50%.

These rates, of course, exclude the Medicare and Social Security payroll tax, another 7.6% from the individual, making the total rates in the 65% range (and that excludes the employer contribution paid on an employee's behalf, which effectively puts the rate in the 73% range). Perhaps Americans will pay attention the next time Democrats campaign on a policy of cutting taxes...