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The mother of all tax hikes

November 20, 2007 | By Nathaniel Ward

     
 

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Should Congress shut down a major city like Kansas City for a year? That would be the economic effect of  a tax-hike plan winding its way through Congress, according to a simulation by The Heritage Foundation’s Center for Data Analysis.

According to Heritage models, here’s what could happen in 2013 alone if liberals get their way:

  • $2,000—Decrease, on average, of each household’s after-tax income. This is about the annual savings of the median household.
  • 1,030,000—Decrease in job creation, “equal to a normal full year of job creation.”
  • $100 billion—Decrease in economic output, “equivalent to closing down Kansas City for a year or Omaha for two full years.”

How would this happen? A proposal advocated by Rep. Charles Rangel (D-N.Y.) would raise taxes on middle- and upper-income workers. But this would be the just first assault on the nation’s pro-growth economic policy, argue Heritage’s Bill Beach and Guinevere Nell. Rangel and many of his colleagues also seek to allow the 2001 and 2003 tax cuts to expire, resulting in “probably the largest tax increase in U.S. history.”

» Find out how the liberal tax increase affects your area with our interactive tool

» Take our poll: Should Congress allow the 2001 and 2003 tax cuts to expire?

Why Americans should be thankful

This week, American families will come together to celebrate Thanksgiving.

The holiday, though, is about far more than turkey and afternoon football. Our country really does have much to be thankful for—as every generation since the Founders has understood. President George Washington, for instance, proclaimed a day of thanksgiving in 1789 to celebrate, in part, “the civil and religious liberty with which we are blessed.”

“In America, throughout its history, religion has flourished—and so has liberty,” Heritage scholar Matthew Spalding argues. “For that, and for the freedom to proclaim and testify to our faith, all Americans ought to the thankful.”

We should also give a special thanks to those who have defended these freedoms and liberties: the men and women who serve this country in uniform.

A happy Thanksgiving to you from all of us at Heritage.

A cheap and clean energy alternative

Decades of generous government investment in environmentalists’ dubious alternative energy schemes have yielded minimal results. Today, less than three percent of electricity comes from sources like wind or solar.

Yet the left hopes to expand government influence over the energy sector in order to combat global warming. “The result of most of these proposals,” Heritage experts Jack Spencer and Nick Loris warn, “would be less energy, greater dependence on foreign sources of energy, and higher prices.”

» What’s a proven, cheap and environmentally-friendly energy alternative? Read on for the answer.

Other Heritage research of note

  • Health care. An expansion of a government health care program to cover more children, a plan that persists despite President Bush’s praiseworthy veto, would not result in better-quality care, health care expert John O’Shea explains. In fact, liberal proposals would disrupt existing quality health coverage enjoyed by middle class children, so Congress should instead “help these families keep their coverage while focusing government programs on poor children.”
  • Mexico and illegal drugs. A new joint initiative with Mexico “will improve the effectiveness of both governments in the battle against drug traffickers along the U.S.-Mexican border,” Heritage Latin America expert Ray Walser and Heritage economist James Roberts write. The so-called Mérida Initiative, a welcome step to combat Mexican lawlessness, will be conducted “on Mexico’s turf,” they continue. And they argue that “no U.S. drug enforcement agents or military boots should be on the ground.”
  • Afghanistan and the war on terror. America and its allies in Afghanistan have faced setbacks in their effort to stabilize the country, Lisa Curtis and James Phillips argue. “To ensure that Afghanistan does not again become a safe haven for terrorism,” they continue, “Americans must wage a long-term integrated political, military, and economic development campaign to convince Afghans that their interests are better served by an inclusive democratic government than by a radical Islamic regime.”

In other news

  • The New York Times has once again thrown caution into the wind and revealed a top-secret government program. Sunday’s newspaper included a report on the secret assistance given Pakistan to help the unstable country guard its nuclear weapons.
  • While the Left continues to attack traditional marriage and family structure, a new study finds that child abuse is more likely in non-traditional families.
  • President Bush may not have another opportunity to appoint another soundly conservative jurist to the Supreme Court since no retirements are pending, U.S. News reports.
  • Venezuela’s slide towards socialism could be bolstered by a December constitutional referendum, The International Herald Tribune reports: “In two weeks, Venezuela could be starting an extraordinary experiment in centralized socialism fueled by oil. By law, the workday would be cut to six hours. Street vendors, housewives and maids would have state-mandated pensions. And President Hugo Chávez would have significantly enhanced powers and be eligible for re-election for the rest of his life.”
  • Immigration from Latin America is changing the America’s demographic makeup. In fact, according to the Census Bureau, Hispanic names Garcia and Rodriguez are the eighth and ninth most common surnames, respectively.
  • As North Korea’s imploding communist economy drives the country’s people further into misery, the number of people seeking asylum in South Korea has increased dramatically. The Washington Post reports that 2,000 people successfully fled the totalitarian outpost last year, compared to just 41 in 1995. North Korea considers it treason to exit without permission, and defectors’ relatives are often shipped to forced labor camps.
  • Another astonishing report from Britain should make advocates of big-government health care think twice: a government doctor refused to treat a woman’s painful arthritis because she was “too fat.” Since the effective government monopoly on health care would not provide the surgery she needed, she was forced to leave the country to obtain treatment from a private-sector doctor—at tremendous expense.
  • Fewer Americans are reading books, according to a new study. At a time when so many are ignorant of the basics, like the principles on which the nation was founded, this is hardly good news.
  • A new United Nations report will conclude that the scope and growth of the AIDS epidemic was previously overstated by U.N. scientists. Perhaps it’s worth considering whether other U.N. scientific reports have a penchant for alarmism.

Coming up at Heritage

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Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation. Colin Gowan contributed to this report.