RUSH: This is from the UK Telegraph: “The amount of income tax paid fell sharply [in Britain] last month in the first formal indication that the new 50p higher rate is not raising the expected amount of revenue.” Well, duh. Everybody knew this was going to happen. This is why average Americans look at people who run governments and say, “Are you stupid?” If you want less of an activity, tax it, and after you tax it, if you want less again, you raise taxes on it. If you want more of an activity, you lower taxes on it. But look what government does. If there’s a shortage of riders on the New York subway, what do they do? They raise fares. And this is what bureaucrats do, a shortage of revenue in Great Britain, so, raise taxes. Plus, they wanted to go out there and punish the rich.
Remember, Obama a couple of years ago talking about the capital gains rate, and people told him, “No, no, Mr. President, if we lower the capital gains rate we’ll have more revenues.” (imitating Obama) “No, no, I don’t care about that. I don’t care about the revenue. I want fairness.” And fairness to him meant raising the rate on capital gains. It’s the same thing here as in Great Britain. They wanted to punish their achievers, and they wanted to score points with the middle class and the lower class by making them think the rich are gonna be punished, but look what happens! The rich always find a way around it.
“The Treasury,” we’ll do the conversion into dollars, ’cause they use pounds in the story.
“The Treasury received $16.2 billion in income tax payments from those paying by self-assessment last month, a drop of $798 million compared with January 2011.” The amount of income tax paid fell sharply last month by almost a billion dollars, by raising the tax rate. And they’re shocked. The story is all about how leaders are shocked, they can’t believe that this happened. And they talk about how these evil rich guys found ways around this. Well, of course they’ll find ways around it, because there is no such thing as a static economy. Everything is dynamic.
Obama, by the way, has announced what he’s claiming to be is a “corporate tax cut.” His corporate tax cut will actually raise taxes on businesses by $250 billion. He’s cutting the rate to 28% but he’s making other changes that will actually result in businesses paying more money. Here’s the Wall Street Journal version: “President Obama’s 2013 budget is the gift that keeps on giving — to government. One buried surprise is his proposal to triple the tax rate on corporate dividends, which believe it or not is higher than in his previous budgets.
“Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in Obamacare, and the new dividend tax rate in 2013 would be 44.8%.” You know what it is today? Fifteen. The current dividend tax rate is 15%. Next year, if Obama’s budget were adopted and coupled with what happens with Obamacare, the dividend tax rate will jump to almost 45%. But he’s out there saying, “I’m cutting corporate taxes. I’m gonna cut that rate down to 28%.” But this more than makes up for it.
At a time where the economy is puttering along, Gallup says that unemployment is slated to rise according to their data. Jim Pethokoukis at AEI posted a story about this and his original headline was: “Geithner Should Resign Over Obama’s Corporate Tax Increase Plan.” And shortly after that post went up the headline changed to: “Why Obama’s Corporate Tax Plan’s a Total Bust.” This is an absolute disaster. This is absolutely purposeful. I’ll make you a prediction. The media will describe this corporate tax proposal as a massive tax cut and a friendly reach across the aisle to achieve fairness, you watch. In fact, they already are. All day long they’ve been talking about Obama’s massive “corporate tax cut,” when it is exactly the opposite.