Kerry’s numbers just don’t add up.
Kerry has proposed $900 billion in new spending (over 10 years). But the non-partisan National Taxpayers Union (they hate everybody) added up Kerry’s promises and they come to 2.7 Trillion over 10 years.
ntu.org
On an annual basis, Kerry has proposed $265 billion in new spending. He has proposed that these would be paid for by eliminating the “tax cuts for the rich”. The problem is that according to the liberal group, Center on Budget and Policy Priorities, the Bush tax cuts will reduce revenue by $135 billion. And that is all of the tax cuts, not just on the rich. (This is a bogus number because it is static and does not consider increased economic activity resulting from the tax cuts. However, it gives Kerry the most benefit of the doubt in this matter.)
cbpp.org
As I noted, this is a static analysis. The reality is far different.
That top 1% of taxpayers, who pay 1/3 of the taxes, have professional money managers These managers use sophisticated financial models to allocate their client's assets. Raise the top tax rate by 4 basis points = more money goes into tax free bonds.
Raise capital gains tax then the risk to reward ratio is adversely affected, less money into stocks. This in turn has some adverse ripple affects, less money for startups, less money for expanding business etc, leads to less job creation and in general, weakened economic activity and so on.
Bottom line is that the tax revenue will be less than Kerry has claimed, and his tax the rich strategy comes no where near paying for his spending.
That leaves him with either raising taxes on everybody, growing the deficit or cutting military and intelligence spending. Maybe all three. |
