Obama Tax Hikes Already Hindering Job Growth

Stephen Keen / September 14, 2010

Without action from Congress, the Obama tax hikes are set to take effect January 1, 2011. However, this doesn’t mean businesses are waiting until then to prepare for the potential impact. In fact, the uncertainty surrounding the tax increases is already holding back potential job growth.

Today’s Wall Street Journal points out, “The uncertainty over looming tax increases is starting to affect both investing and corporate decision making. … Small-business owners say unease about tax policy, along with the economy, has led them to hold off on hiring and investment.”

Specifically, President Obama has proposed allowing taxes on dividends and capital gains to jump to 20 percent from the current level of 15 percent. If Congress fails to act at all, the tax rate will rise to the pre-2003 level of 39.6 percent, an increase of 164 percent in a single year.

Tax hikes such as these should be alarming to most Americans for several key reasons.

First, as Heritage Foundation Senior Tax Policy Analyst Curtis Dubay recently wrote, “[Increased dividend taxes] will not only hurt American companies, but penalize America’s senior citizens. Older people hold the most stock of any demographic group, and often rely heavily on dividends to supplement Social Security income.” (more…)