President Obama’s health care takeover will not just force most Americans into a government-run insurance plan, it will also give us European-style tax rates. Actually, we will be taxed at higher rates than most Europeans.
Yes, that’s right. No need to do a double take. In order to pay for the White House’s dreams, Americans will be taxed at a higher top marginal rate than most Europeans, including the French, the Germans, and the Spanish.
The White House and the President’s supporters in Congress will soon swing into gear with their slick PR machine and will tell you that this is all scaremongering—and stenographers in the media will be all-too ready to amplify the message. It is, alas, not scaremongering.
Brian Riedl and Curtis Dubay, two top senior policy analysts at The Heritage Foundation, posted a web memo on Wednesday that is highly worth reading. It shows what is about to happen to our top marginal rates with the expiration of the 2001 and 2003 tax cuts and the addition of the 5.4% surtax on high earners that the House of Representatives will soon vote into law.
The average top marginal income tax in the U.S. will be above 52%. You know what they are in France? 45.8%. Germany? 47.47%. You can find the table below on the Foundry. It makes for sad reading.
The top marginal is important because it is the tax that is levied on the last dollar earned. This means that it is the one that incentivizes work, investment, and overall effort. It is the one that dictates how strongly our economy will hum.
As Rield and Dubay note, once we do this we will suffer from the same afflictions that have haunted Europe for decades.
We know our President likes Europe. The question is—how badly do you want to become a European?