My parents saw this movie about 'soaking the rich'

During the 2008 campaign, my mother reacted to candidate Obama's populist comments.  She would always say something like this: "Your father and I saw that movie, and it does not end well."

My sweet mother was not calling Obama a communist or saying that he'd be the next Fidel Castro.  She was talking about his economic ideas, or ideas that destroyed Cuba's middle class.  By the way, those ideas have also destroyed Venezuela, Argentina, and Bolivia, and we could be talking soon about Brazil as well.

The Wall Street Journal had a great post yesterday about the "middle class."  It makes my mom a prophet:

How could higher taxes on the top 2% or 3% hurt the middle class? Part of the answer is that when upper-income Americans spend their money on vacations or cars, they are taxed only once, after they earn it. But if they put their money to work by, for example, building out a family business, they got socked a second time by higher investment taxes.

And this discourages the investments that grow the economy. Although the Obama administration argues otherwise, these tax hikes were not minor.

The tax rate on capital gains for high-income earners shot up to 23.8%—20% plus the 3.8% ObamaCare investment surtax.

Ditto for the tax on dividends.

So taxes on business investment rose by nearly 60% in 2013 and are nearly 20% higher than in the Clinton years.    

For estates more than $5.3 million in value, the estate tax in 2013 rose to 40% from 35% in 2012. This tax is a confiscatory double tax on a lifetime of savings, and the money reinvested in stocks or a family business.  

The overall effect of the 2013 tax hike was not minor. The highest income-tax rate on small business income has risen to almost 42% from 35%. That’s a 20% spike in the small business tax for successful companies. When the government takes more, there is less to plow back into the business or invest elsewhere.  

This may help explain the paradox that even as American businesses today are generally efficient and highly profitable, they aren’t reinvesting in new plants, equipment and technology or hiring more workers at the pace they normally would. Business investment was up last quarter—a hopeful sign—but over the recovery the trend has been sluggish.

My parents did not have a chance to vote out the charlatans of class warfare.  Thankfully, we do next Tuesday.  We have a chance to send a message that we are sick and tired of politicians who preach the destructive and poisonous message of populism.

Yes, we've seen this movie before, and it stinks.  Cancel it next Tuesday with your vote.

P.S. You can hear CANTO TALK here & follow me on Twitter @ scantojr.

During the 2008 campaign, my mother reacted to candidate Obama's populist comments.  She would always say something like this: "Your father and I saw that movie, and it does not end well."

My sweet mother was not calling Obama a communist or saying that he'd be the next Fidel Castro.  She was talking about his economic ideas, or ideas that destroyed Cuba's middle class.  By the way, those ideas have also destroyed Venezuela, Argentina, and Bolivia, and we could be talking soon about Brazil as well.

The Wall Street Journal had a great post yesterday about the "middle class."  It makes my mom a prophet:

How could higher taxes on the top 2% or 3% hurt the middle class? Part of the answer is that when upper-income Americans spend their money on vacations or cars, they are taxed only once, after they earn it. But if they put their money to work by, for example, building out a family business, they got socked a second time by higher investment taxes.

And this discourages the investments that grow the economy. Although the Obama administration argues otherwise, these tax hikes were not minor.

The tax rate on capital gains for high-income earners shot up to 23.8%—20% plus the 3.8% ObamaCare investment surtax.

Ditto for the tax on dividends.

So taxes on business investment rose by nearly 60% in 2013 and are nearly 20% higher than in the Clinton years.    

For estates more than $5.3 million in value, the estate tax in 2013 rose to 40% from 35% in 2012. This tax is a confiscatory double tax on a lifetime of savings, and the money reinvested in stocks or a family business.  

The overall effect of the 2013 tax hike was not minor. The highest income-tax rate on small business income has risen to almost 42% from 35%. That’s a 20% spike in the small business tax for successful companies. When the government takes more, there is less to plow back into the business or invest elsewhere.  

This may help explain the paradox that even as American businesses today are generally efficient and highly profitable, they aren’t reinvesting in new plants, equipment and technology or hiring more workers at the pace they normally would. Business investment was up last quarter—a hopeful sign—but over the recovery the trend has been sluggish.

My parents did not have a chance to vote out the charlatans of class warfare.  Thankfully, we do next Tuesday.  We have a chance to send a message that we are sick and tired of politicians who preach the destructive and poisonous message of populism.

Yes, we've seen this movie before, and it stinks.  Cancel it next Tuesday with your vote.

P.S. You can hear CANTO TALK here & follow me on Twitter @ scantojr.