The Ugliest Chart You'll See All Day

In a Wall Street Journal opinion piece, Reaganite John Cogan and Glenn Hubbard (architect of the 2003 investment income tax cuts) ponder the coming tax bomb, waiting to detonate should one of the Presidential candidates who don't support extending such cuts (hint: there are two of them) be elected in November.

Letting the Bush tax cuts expire will drive the personal income tax burden up by 25% – to its highest point relative to GDP in history.

This would be the largest increase in personal income taxes since World War II. It would be more than twice as large as President Lyndon Johnson's surcharge to finance the war in Vietnam and the war on poverty. It would be more than twice the combined personal income tax increases under Presidents George H. W. Bush and Bill Clinton. The increase would push total federal government revenues relative to GDP to 20%.

Why this large tax increase? The tax code changes enacted in 2001 and 2003 are scheduled to expire at the end of 2010. If they do, statutory marginal tax rates will rise across the board; ranging from a 13% increase for the highest income households to a 50% increase in tax rates faced by lower-income households. The marriage penalty will be reimposed and the child credit cut by $500 per child. The long-term capital gains tax rate will rise by one-third (to 20% from 15%) and the top tax rate on dividends will nearly triple (to 39.6% from 15%). The estate tax will roar back from extinction at the same time, with a top rate of 55% and an exempt amount of only $600,000. Finally, the Alternative Minimum Tax will reach far deeper into the middle class, ensnaring 25 million tax filers in its web.

Much more here, where Hubbard and Cogan make the case that growth, not redistribution, is the best way not only to weather economic storms, but to invite long-term prosperity throughout the economic spectrum.

(Well-timed too, a week before April 15th and two weeks before Tax Freedom Day.)