Barron’s Recognizes the Threat of Obama’s Tax Proposal; 'Today' Rejects Personal Responsibility, Attacks Online Dealmakers; Media Call Obama's 'Economic Disaster' Exaggeration a 'Sharpened Attack'

It seems like a no-brainer: Raising taxes is bad. It's a shame that Barron's is one of the few outlets to pick up on it.

An economic plan floated by Democratic presidential hopeful Sen. Barack Obama, Ill., would raise taxes on incomes above $250,000 – with the highest rate at 39.6 percent – and redistribute the wealth to the poor and middle-class. But that would be a big mistake, according to an article by Jim McTague in the August 25 issue of Barron's.

"It's almost as if Obama wants to repeat the mistakes of Herbert Hoover," McTague said. "During the Great Depression, Hoover raised the top marginal rate to 63% from 25% and hiked corporate taxes, too, says Michael Aronstein, chief investment strategist at Oscar Gruss & Son in New York. The moves siphoned needed investment capital out of the markets and into the hands of bureaucrats, delaying the turnaround."

McTague explained that while Obama may be unable to avoid it this would ultimately be bad for investors.

"Because of the budget deficit, now approaching $500 billion a year, the next president, regardless of party, will have his hands tied, many observers say. He will have little choice but to raise taxes and cut spending," McTague wrote. "Obama's tax plans, however, point to a philosophy that historically has worried market pros. Raising taxes on the investor class simply doesn't help investment."

From: The Business & Media Institute