The Democrat-controlled Senate passed this by a 51-48 margin Wednesday, voting to raise marginal income-tax rates from 33% to 36% for individuals making more than $200,000 and from 35% to 39.6% for couples makingIf this (on the very slim chance) makes it though the House of Representatives, this will have the unfortunate effect of forcing an already slowing economy back into recession, just as FDR's Keynesian economic policies of 1934-5 pitched the then recovering national economic outlook back into a more severe recession in 1937.
On top of that body blow to the economy, which the House is sure to block, the Senate Democrats' vote would also increase the top tax rate on capital gains and dividends from 15% to 20% — which, as Forbes' Donald Marron recently noted, will actually reach 25% in 2013 thanks to ObamaCare and the reinstatement of the "Pease provision" that limits deductions.
There can now be no pretense of distance between Senate Democrats and Obama; this was his tax policy being voted on, with Vice President Joseph Biden himself presiding to break any possible tie. Every Democratic senator except the retiring Jim Webb and retiring "independent Democrat" Joe Lieberman voted for it, apparently to avoid embarrassing the president.more than $250,000, some 2.5 million households.
Outside the Currie report, another factor involved was the uncertainty the business community felt concerning New Deal policy. The combination of repeated budget deficits, increasing regulatory obstacles, higher labor costs due to the Wagner Act, and the threat of higher taxes contributed to the reduction of business and investor confidence. New investment had dropped, causing FDR to speculate that there was a "capital strike" designed to oust him from office.If you see parallels to what is happening today, you'd be correct. Today, businesses all over the country have refrained from spending money, have hesitated from hiring new employees, and have kept production down because they are uncertain of what will happen. Recent economic forcasts have shown with enemic 1.9% growth for the 2nd Qtr 2012, will probably be corrected down from that dismal number as new unemployment figures have risen for the 3rd month in a row.
This "capital strike" was caused by the terrifying effect that the New Deal's random targeting of business had on the general economy, according to 1940 Republican presidential candidate Wendell Wilkie. If investors thought the government would take over a certain industry, they would withhold their money from that industry.
The targeting of business and corporations was very evident in the new undistributed profits tax. Companies had cut their dividend distributions in the face of lower earnings, reducing the revenue the federal government received from dividend taxes. Therefore, a tax bill was passed to get at those undistributed funds. According to the August 1937 New York Times article, "Levy on Profits Halts Expansion," the undistributed profits tax decreased companies' financial reserves, which prevented them from retaining their employees and investing in new equipment.
In this sort of economic climate, with a Federal government that has implemented choking regulatory standards, its no wonder that business have so far refused to increase either spending or production. There is far too much uncertainly during an election year for any business to being betting on an economic recovery.
WIth this in mind, any GOP/Libertarian candidate for the US Senate would be wise to hammer their opponent for voting to raise taxes. They would also be smart to use this video as well:
And she idiotically doubles down on her statement:
Then they would hit them with this video from the Romney Campaign:
Now, this is the policy of the (Social) Democratic Party...tax business into the ground!
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