Originally Published: October 29, 2004 7 a.m.
WASHINGTON – When John Kerry looked straight into the TV camera in the second debate and promised not to raise taxes on people making less than $200,000 a year, many Americans did not believe him.
The Gallup Poll has reported that even among the middle-income people who make less than $50,000 a year, 44 percent said they believed Kerry would still raise their taxes. A bigger 55 percent majority among those earning between $50,000 and $100,000 also disbelieve him. The tax-doubters soar to nearly 60 percent among those making more than that.
If President Bush wins re-election, however, 57 percent say they think their taxes would stay the same, 25 percent say they would increase and 13 percent say they will decline further.
Many people have sound reasons for not believing Kerry's promises on taxes. He has a 20-year record of voting against tax cuts and for tax increases to boost spending. He comes from a state that carries the nickname "Taxachusetts" and was at Gov. Mike Dukakis' side when he increased taxes on just about every taxpayer.
But the biggest reason to doubt Kerry's vow on taxes is on his own campaign Web site.
Under his plan on "fiscal responsibility," Kerry says he intends to "restore the top two tax brackets to their levels under President Clinton."
Those tax rates were 39.6 percent and 36 percent, respectively, until Bush cut all the marginal tax rates in 2001 – dropping the two highest rates to 35 percent and 33 percent.
According to the Internal Revenue Service's 2004 tax rate schedules, the lower of the two top tax brackets applies to single workers who earn at least $143,500 and married working couples filing jointly who have a combined income of $174,700 or more.
Thus, a two-earner married couple filing jointly, each making $87,350, could pay taxes under the higher tax rate that Kerry proposes if he applied it to the income brackets that are currently in the IRS tax rate schedule.
But the Massachusetts liberal insists he will apply the higher Clinton tax rates only to those making more than $200,000 a year. That would seem to be a contradiction under the IRS' long-held income tax brackets.
But why increase taxes on the people who save and invest the most and who disproportionately provide the bulk of the risk capital to start up new businesses that will create more jobs? A lot of money reportedly is "sitting on the sidelines" on Wall Street in this election and that's because of the higher tax rates a President Kerry would impose on investors, capital gains and stock dividends that would sandbag the economic recovery.
Kerry's answer is that he needs more money for the higher levels of spending he is proposing and to reduce the deficit.
Guess who is going to have to cough up the rest of that money under a Kerry presidency?