12,200 COLORADO JOBS LOST? New Study Finds Obama Tax Hike To Kill Employment

Published on July 17, 2012 by

A new study by powerhouse accounting firm Ernst & Young finds that Obama's proposed tax hikes could kill 710,000 jobs nationwide, including 12,200 here in Colorado. The study found that the tax increases could result in an over $200 billion hit to the economy, with $3.5 billion of lost economic output in Colorado.

From the study:

With the combination of these tax changes at the beginning of 2013 the top tax rate on ordinary income will rise from 35% in 2012 to 40.9%, the top tax rate on dividends will rise from 15% to 44.7% and the top tax rate on capital gains will rise from 15% to 24.7%.

These higher tax rates result in a significant increase in the average marginal tax rates (AMTR) on business, wage, and investment income, as well as the marginal effective tax rate (METR) on new business investment. This report finds that the AMTR increases significantly for wages (5.0%), flow-through business income (6.4%), interest (16.5%), dividends (157.1%) and capital gains (39.3%). The METR on new business investment increases by 15.8% for the corporate sector and 15.6% for flow-through businesses.  

This report finds that these higher marginal tax rates result in a smaller economy, fewer jobs, less investment, and lower wages. Specifically, this report finds that the higher tax rates will have significant adverse economic effects in the long-run: lowering output, employment, investment, the capital stock, and real after-tax wages when the resulting revenue is used to finance additional government spending. [Peak emphasis]

You don't have to take Ernst & Young's word for it. President Obama himself has said that raising taxes in a recession is bad policy. Let's check the tape:



President Obama: “The last thing we want to do is to raise taxes in the middle of a recession because that would just suck up, take more demand out of the economy.”

With unemployment rising in Colorado in both April and May, the time for tax increases, per Ernst & Young and the president himself, is not now. Actually, it’s pretty much never the time, but definitely not now.

“If our president is so out of touch as to think the private sector is “doing fine” and says “if you’ve got a small business, you didn’t build that,” then we shouldn’t be surprised that he believes a tax increase that will cost Americans jobs is the solution to get our economy back on track,” said RNC Spokesperson Ellie Wallace.

With this devastating study on the devastating impacts of Obama’s tax hike plan it will be interesting to see the reaction of Colorado Congressional candidates. Will the press pick up the phone and ask?

 

CO RECESSION DEEPENS IN POCKETS: Labor Dept Finds 17 Counties With Unemployment Surpassing 19.5%

Published on December 29, 2011 by

While the overall unemployment rate in Colorado has fallen slightly recently, those top line figures obscure a deep and painful recession hitting many Coloradans especially hard. Colorado Peak Politics has obtained a letter from the Director of the Colorado Department of Labor (CDL) to the US Department of Agriculture (USDA), sent at the end of August, certifying 17 counties in Colorado as having surpassed 19.5% unemployment.

To see the letter, click here.

The letter, from CDL Director Alexandra Hall to Robin Pulkkinen, a loan specialist at USDA, certifies that 17 counties in Colorado have a "Not Employed Rate" exceeding 19.5%. "Not Employed Rate" is defined in the letter as:

"the percent of individuals over the age of 18 who reside within the community and who are ready, willing and able to be employed but are unable to find employment as determined by the department of labor in the State in which the community is located."

Many counties certified with a "Not Employed Rate" surpassing 19.5% are rural, but the list also includes major Colorado population centers like Mesa, Weld and Pueblo counties.  

As the below chart included in the letter demonstrates, the economy in Colorado is in a much deeper hole than many realize. Top line unemployment numbers may continue to improve, albeit aided by large numbers of Coloradans who stop looking for work, obscuring the real unemployment number, but that won't change the economic reality facing Coloradans living in these counties every day. 

Obama is relying heavily on a rebounding economy for re-election. What this letter, and the data found within, reveals is that to get to a point where Coloradans are happy with the economy is a long way off — most likely well past November 2012. 

The potential political impact could be to turn rural, conservative Democrats against Obama.

Elections are about two things: change or more of the same.

With the economy at near Depression-era levels in these Colorado counties, who in the world would vote for more of the same for President?


 
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