The Obama administration risks overseeing the largest tax increase in
history if it allows the 2001 and 2003 tax cuts to expire at the end
of the year.
Low-income families will see their income tax rate jump five
percentage points, while everyone else will see increases of three to
4.6 percentage points. Capital gains and dividends tax rates -
currently 15 percent for most investors - will leap to 20
percent and 39.6 percent, respectively. The death tax, which is
finally gone, will be re-imposed at a 55 percent rate.
Not only would these increases hurt families during stable times, but
they will further devastate our already-wobbling economy. Instead of
raising taxes to previous high levels, which will do
little to control the rising deficit, lawmakers should tighten their
belts and rein in spending. Tax hikes only encourage more
spending and higher deficits.