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Do tax increases hurt job creation?

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    Jim Angle reports from Washington

  • Duration 2:43
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Thank you.

A huge issue this fall will be taxes who pays how much and whether.

The well off should pay more tonight chief national correspondent Jim Angle looks at some new information that warns of unintended consequences.

The end of vendor research organization urged a -- released a report today saying an increase in taxes on families making more than 250000.

A year.

Would cost hundreds of thousands of job.

What they found was that if those rates are allowed to go up.

You're gonna see 7101000.

Sure jobs.

For people who keep their jobs are gonna have lower wages you have less investment.

In the economy's going to be small.

That's because President Obama wants to increase not just income taxes but also tax rates on capital gains and dividends among others and allow fewer deductions.

As it turns out the most successful small businesses accounting for 54%.

Of all private sector jobs pay the individual tax rate.

And all those increases their -- would raise the cost of investment and job creation in the US.

So -- increase the cost of investment in the -- by about 15%.

Which means that people are gonna have incentive to not invest in the United States -- invest someplace else to make side investing in job creation.

More more expensive so the economy will be one can expect to be smaller than it would be otherwise.

Just yesterday mr.

Obama criticized mr.

Romney for supporting a so called curatorial -- Which prevents -- double taxation on foreign earnings a policy also supported by some Obama advisors.

The president pointed to steady written by one of his supporters that said such a policy would create 800000.

Jobs overseas.

Bruised -- young a nonpartisan group found the president's tax proposals create the same incentives.

The costs of investing.

Goes up in the US relative to two other countries.

And as a result of that one could expect there to be less investment less capital inflow from abroad.

Plus investment in the US.

Virginia -- also found that wages would fall as workers become less productive lower wages because.

That means that businesses can buy less equipment less tool to make their workers more productive.

Less productivity means lower wages President Obama has insisted that an increase in the top rates would have little impact on the economy arguing most small businesses would not be affected.

The proposal -- -- today.

Would extend these tax cuts -- 97%.

Of -- small business owners in America in other words 97% of small businesses.

Fall under the 250000 dollar threshold.

But that other 3% are the most successful and the very ones responsible for more than half the nation's private sector employment.

And 723.

Billion dollars a year in earnings.

Jim thank.

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