20070619 The Democratic War Against Prosperity Marches On by Lawrence Kudlow

The Democratic War Against Prosperity Marches On

by Lawrence Kudlow

War against prosperity

Democrats in Congress and on the presidential trail are intensifying their high-tax war against prosperity and the so-called rich. Their latest salvo includes more tax penalties on successful investors and entrepreneurs, such as a proposed 4.3 percent surtax on high-income earners and a tax assault on the private-equity buyout industry.

The surtax allegedly would raise sufficient revenues to exempt middle-class folks from paying the alternative minimum tax.

Meanwhile, Democrats (and some Republicans) take aim at the booming private-equity buyout industry…

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Class envy is behind all this…

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Ironically, all this is happening while low-tax Reaganomics is spreading worldwide. Hence, this would be the exact wrong moment for U.S. politicians to raise taxes and impair American economic competitiveness.

… a tax-cut war is spreading across Europe, where lower levies on corporate profits in Spain, Germany, France and the U.K. are aimed at better competing with the U.S. in the global race for capital. The successful supply-side experiment in Ireland has become a Euro-wide model. Average EU corporate tax rates have dropped to 25 percent, compared to the U.S. federal, state, and local average of 40 percent. Newly elected French President Nicholas Sarkozy intends to cut his country's corporate tax, as does Spanish Prime Minister Zapatero, as does Italian Premier Romano Prodi. This would follow large business tax reductions in Poland, Slovakia and Hungary.

Aren't the Democrats watching?

Out on the campaign trail, leading Democrats Hillary Clinton, Barack Obama and John Edwards are all talking tax hikes. Mrs. Clinton says, "The president's irresponsible tax breaks for high-income Americans" must be allowed to expire. She then claims the percent of taxes paid by corporations has fallen as corporate profits have skyrocketed. That's backward. During the Bush boom, business tax collections as a share of overall tax revenues have skyrocketed -- well above levels witnessed during the Clinton 1990s.

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And there is much much more…

Click here to read the entire column…

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