John Kerry's
Contract with
America's Middle Class claims: "The middle class is the moral and
economic backbone of this nation. ... " And, moreover, that it was the
middle class that "built America." You know, I;ve worked a fair number
of private sector jobs in my lifetime. And not one of those jobs was
created by somebody in the middle class. Instead, they were created by
small businessmen (yes, including a few trial lawyers!) who became
wealthy through their hard work or giant corporations. And those job-
creating folks who will bear the burden of John Kerry's tax-and-spend
liberalism.
His VP John Edwards promises as much:
"We're going to roll back -- we're going to roll back the tax cuts for
the wealthiest Americans. And we're going to close corporate
loopholes." No wonder
economists have doubts about Kerry:
The highlight
of his economic plan, so far, has been his pledge to repeal the tax
cuts given by Congress and President Bush to families making more than
$200,000 per year.
Kerry plans to return the
savings to middle-class and lower-income families, in the form of
further tax cuts and credits, along with a plan to cut health
costs.
Wall Street is unhappy about the
prospect of this happening, fearing that wealthy people will have less
money to invest.
In the short term, Wall
Streeters say, it could give the economy a shot in the arm, since
lower-income people tend to spend more of their income than upper-
income people. But taking money out of the hands of upper-income people
could hurt future growth, said Anthony Chan, chief economist at Banc
One Investment Advisors. "That group is investing and saving. In the
longer term, it would hurt."
And President Bush
and some economists believe small-business owners would be hurt by such
a measure, because many choose to pay personal-income tax
rates.
"There's that group of small business
owners, where a lot of the jobs are, for whom hiking taxes will hurt
their business," said Robert Brusca, chief economist at Fact & Opinion
Economics. "They already face higher heating costs, insurance costs --
at some point, they may decide there are too many costs to run a
business and decide it's not worth it any more."
Granted,
apparently some economists think the effects will be only marginal, but
tell it to the folks at the margin who won't get a job because Kerry's
tax increases reduced economic investment and growth.