Demobamacrats: Tax and Spend Liberals

A couple of days ago, I added the numbers on Obama's tax proposals in a back-of-the-envelope manner and concluded "we're really looking at a top tax rate of 53.45 percent to 54.9 percent for top earners." (A few accountants wrote in and said the complications of the tax code make it tough to make a precise percentage like that.)

Guys much smarter than me at the Tax Policy Center (via Instapundit, via Kaus) have come to a similar conclusion:

Combine [Obama's Social Security tax proposal] with a top income tax rate of 39.6 percent, the phase-out of itemized deductions—which Obama would like to revive and which amounts to an implicit 1.2 percent surtax—and state income taxes, which typically run around 6 percent, and the total tax on labor would be close to 60 percent. In high-tax states like California and New York, the top rate would be even higher. Such high rates would provide an enormous incentive to hide income from the IRS or make earnings look like capital gains (which Obama would continue to tax at far lower rates than other income) or business profits (which are subject to income tax but exempt from payroll tax).

(Note that Paul Krugman is wondering why Obama's proposal hasn't gotten more attention, as it would "push tax rates on some high-income Americans back to the levels of the 1970s." Paul Krugman! I knew he preferred Hillary to Obama; looks like he hasn't jumped on the bandwagon yet.)