Obama Budget Seeks $1.9 Trillion Tax Rise on Richest, Business

www.bloomberg.com...

Obama Budget Seeks $1.9 Trillion Tax Rise on Richest, Business

By Ryan J. Donmoyer

Feb. 2 (Bloomberg) -- The Obama administration seeks a $970 billion tax increase over the next decade on Americans earning more than $200,000 and wants to take in an additional $400 billion from businesses even as it retools a proposed crackdown on international tax-avoidance techniques.

The administration budget released yesterday would reinstate 10-year-old income tax rates of 36 percent and 39.6 percent for single Americans earning more than $200,000 and joint filers making more than $250,000 as part of a broad $1.9 trillion tax increase proposal. It proposes to eliminate preferences for oil and gas companies, life-insurance products, executives of investment partnerships and U.S.-based companies that operate overseas.

“This set of tax reforms strikes a balance between targeted tax cuts to spur investments in job growth and innovation here at home, middle-class tax relief to make our tax system more fair, measures to crack down on abuses that send jobs overseas, and long-term fiscal discipline,” Treasury Secretary Timothy F. Geithner said in a statement.
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...More at link

Reuters released data on tax hikes that will hit the middle class. Odd since Reuters is normally on the same team as the Obama spokesmen. However it seems someone influenced Reuters and the story was taken down.

www.reuters.com...

ADVISORY: Backdoor taxes story

Tue Feb 2, 2010 1:35pm EST

The Feb 1 story headlined "Backdoor taxes to hit middle class" is wrong and has been withdrawn. The story said lower-income families will pay more under tax provisions scheduled to expire Dec 31. The Obama administration's budget calls for the extension of those tax provisions for households earning less than $250,000. There will be no substitute story.

Original Reuters story:

Backdoor taxes to hit middle class

NEW YORK (Reuters.com) -- The Obama administration’s plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families.

In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year — effectively a tax hike by stealth.

While the administration is focusing its proposal on eliminating tax breaks for individuals who earn $250,000 a year or more, middle-class families will face a slew of these backdoor increases.

The targeted tax provisions were enacted under the Bush administration’s Economic Growth and Tax Relief Reconciliation Act of 2001. Among other things, the law lowered individual tax rates, slashed taxes on capital gains and dividends, and steadily scaled back the estate tax to zero in 2010.

If the provisions are allowed to expire on December 31, the top-tier personal income tax rate will rise to 39.6 percent from 35 percent. But lower-income families will pay more as well: the 25 percent tax bracket will revert back to 28 percent; the 28 percent bracket will increase to 31 percent; and the 33 percent bracket will increase to 36 percent. The special 10 percent bracket is eliminated.

Investors will pay more on their earnings next year as well, with the tax on dividends jumping to 39.6 percent from 15 percent and the capital-gains tax increasing to 20 percent from 15 percent. The estate tax is eliminated this year, but it will return in 2011 — though there has been talk about reinstating the death tax sooner.

Millions of middle-class households already may be facing higher taxes in 2010 because Congress has failed to extend tax breaks that expired on January 1, most notably a “patch” that limited the impact of the alternative minimum tax. The AMT, initially designed to prevent the very rich from avoiding income taxes, was never indexed for inflation. Now the tax is affecting millions of middle-income households, but lawmakers have been reluctant to repeal it because it has become a key source of revenue.

Without annual legislation to renew the patch this year, the AMT could affect an estimated 25 million taxpayers with incomes as low as $33,750 (or $45,000 for joint filers). Even if the patch is extended to last year’s levels, the tax will hit American families that can hardly be considered wealthy — the AMT exemption for 2009 was $46,700 for singles and $70,950 for married couples filing jointly.
Middle-class families also will find fewer tax breaks available to them in 2010 if other popular tax provisions are allowed to expire. Among them:

• Taxpayers who itemize will lose the option to deduct state sales-tax payments instead of state and local income taxes;
  
• The $250 teacher tax credit for classroom supplies;
  
• The tax deduction for up to $4,000 of college tuition and expenses;
  
• Individuals who don’t itemize will no longer be able to increase their standard deduction by up to $1,000 for property taxes paid;
  
• The first $2,400 of unemployment benefits are taxable, in 2009 that amount was tax-free

Now we know that businesses pass through taxes to their customers - us. Taxes are a burden on the economy, if you want to reduce commerce in a certain area, tax it. The cost of living will go up and the quality of life will go down. Seems we're all expected to support the multi-TRILLION spending splurge of 2008-2012.

By the way, a TRILLION is a million millions. You would have to spend a million dollars a day for 2,740 years to spend one TRILLION dollars.



[edit on 2-2-2010 by Dbriefed]

Budget? More like another spending bill to me.

Times are good? Tax the rich
Time are tough? Tax the rich

When do the rich get a break, to actually use their money to hire people instead of having it confiscated by the federal government?

[edit on 2-2-2010 by Carseller4]

Relax, they are going to roll back the tax breaks for the rich to pre-Bush Jr. levels and the rich and our economy certainly did okay back then, did they not?
We still had a middle class back then too. The rich will still be rich.

Bankers are excluded, so the right rich will stay rich.

www.politicsdaily.com...

Obama Calls for Big Tax Hikes, But Lets Bankers off the Hook
POSTED: 02/1/10

...His budget proposes raising $90 billion over ten years by imposing the Financial Crisis Responsibility Fee on many financial institutions that benefitted from the TARP. But, his plan does not call for a tax on the bankers' bonuses that Obama finds so obscene.

The president had seemed determined to go after "fat cat bankers" whose firms are reporting "massive profits and obscene bonuses" because some of these firms "owe their continued existence to the American people," as he said in January when he announced the Financial Crisis Responsibility Fee. But his budget only goes part way to fulfilling this pledge.

While it can be difficult to levy windfall taxes, when the investment bank Goldman Sachs is earning a record $13.4 billion, its CEO Lloyd Blankfein reported about to receive a $100 million bonus, and the firm planning to pay more than $16 billion in compensation and benefits, Obama is leaving a lot of money on the table. What is worse, even companies that lost money are still paying record amounts to their employees. Although it lost $960 million last year, Morgan Stanley managed to pay $14.4 billion in compensation and benefits.

Finally, while it is always difficult to levy windfall taxes, Obama may have missed the perfect opportunity to modify the bankers' compensation practices. As the U.K. Chancellor of the Exchequer Alistair Darling said when announcing his government's plan to levy a 50 percent windfall tax on banker bonuses, the goal is to provide banks an incentive to rebuild their capital rather than to pay themselves. As the Financial Times' Martin Wolf described it, a windfall tax recognizes that the banks owe their tremendous profits to the unlimited protection that the government gave directly through multibillion dollar bailouts but also through the implicit guarantee the government provided by assuring that none of these institutions would fail. Both Goldman Sachs and Morgan Stanley received a $10 billion bailout from the TARP....

[edit on 2-2-2010 by Dbriefed]

What Obama fails to tell us is that families that earn $250,000 or less will get taxed to crap anyways with the higher prices on goods and services. More hidden taxation will come about for this massive bloated budget that will for sure erode the value of the dollar.

Considering the "rich" pay the lions share of the income taxes, why shouldnt they be the first to benefit from tax cuts?

Letting these tax cuts expire does nothing but take money out of the pockets of the people who actually create jobs and stimulate the economy.

I would expect nothing less from an economically retarded president like Obama.

Obama has done the impossible: He made GWB look intelligent.

reply to post by Carseller4

When do the rich get a break, to actually use their money to hire people instead of having it confiscated by the federal government?

The tax rate will still be LOWER THAN IT WAS DURING REAGAN and it will be FAR LOWER than the 91 percent it was when Eisenhower was President.

By the way...Obama is also supporting almost doubling the child tax credit for lower income families...and also tax credits for child care...from 20 percent to 35 percent.

IF YOU QUALIFY FOR THIS>>>WILL YOU RETURN IT BECAUSE YOU LOVE THE RICH?

YEAH...I'M SURE YOU WILL.

All the rich people crying that they will be LESS RICH while a large portion of the country loses their asses.

I don't want to hear it anymore.

reply to post by brainwrek

Letting these tax cuts expire does nothing but take money out of the pockets of the people who actually create jobs and stimulate the economy.

Yes, I agree, we should cut taxes for corporations and reward them for SENDING ALL OF OUR JOBS OVERSEAS....which is what they did AFTER THE BUSH TAX CUTS!

ENOUGH OF THIS BS!!!!!!!!!!!!!!!!!

reply to post by David9176


Corporations dont pay taxes, they pass the cost on to the consumer.

Hope you enjoy paying more thanks to your boy Obama.

Originally posted by David9176

By the way...Obama is also supporting almost doubling the child tax credit for lower income families...and also tax credits for child care...from 20 percent to 35 percent.

Considering those low income families dont pay a cent in income taxes, why should they receive an even higher tax "credit"?

reply to post by brainwrek

Corporations dont pay taxes, they pass the cost on to the consumer.

You're right...they don't pay taxes because they sent all of our jobs overseas so t hey only have to pay a 2 percent tariff. They'd rather pay for slave labor than support your salary. They don't give an F about your job brainwrek.

Pull your head out of your ass. Small businesses cannot grow when international corporations can cost cut them completely out of business.

Want to fix things? RAISE TARIFFS.

reply to post by brainwrek

Considering those low income families dont pay a cent in income taxes, why should they receive an even higher tax "credit"?

I don't know what the exact cut off is...but I believe it's 85,000 or less per family that gets the full credit...and less for those making more than that.

YES, I pay more than I get back. Not to mention I have been paying for SS my whole life THAT I WILL NEVER GET.

Have kids Brainwrek? If so will you return/refuse the money to stand by our principles????????????????????????????????

reply to post by David9176


Odd, my business has grown every year since I started it in 2002.

Ever happen to think WHY the businesses have moved overseas?

Hint: Loser unions, high taxes, and government regulations play a large part in it, as do lower wages.

[edit on 2-2-2010 by brainwrek]

reply to post by David9176


yup, I have one kid and I earn too much to qualify for any of the socialistic redstributive policies this mental midget Obama supports.

reply to post by brainwrek

Hint: Loser unions, high taxes, and government regulations play a large part in it, as do lower wages.

Wrong. If our tariffs were higher....such as China's which is 20 percent...or India which is 40 percent...then they wouldn't leave as they wouldn't make more profits by leaving the country...which in turn KEEPS T HE MONEY IN THE COUNTRY.

Cripes...go to the store and try to find something made in the USA. The megacorporations sold us out. They don't care about this country or they WOULDN'T HAVE LEFT IN THE FIRST PLACE.

reply to post by David9176


Where do you get the idiotic notion corporations are supposed to care about any country?

They are in business for one reason and one reason only: To make a profit.

If said profit is lowered by government regulation, high wages, or union contracts, the only natural course of action (and smart business decision) is to go somewhere else.

If unions didnt demand 25 bucks an hour for a low skill labor job that a retarded monkey could do, then perhaps this country would still have a manufacturing sector.

By supporting tariffs, you also support paying more for products correct?

[edit on 2-2-2010 by brainwrek]

reply to post by brainwrek

yup, I have one kid and I earn too much to qualify for any of the socialistic redstributive policies this mental midget Obama supports.

Like SS? Medicare? Seriously...what the hell do you think anything the government does actually is?

It's ALL REDISTRIBUTION OF WEALTH. FROM WARS...TO CORPORATE CONTRACTS WITH THE GOVERNMENT....TO SOCIAL PROGRAMS.

It's all the same.

Oh...and it's such a tragedy that you do not qualify for that evil help. What if you lost it all...job..house...all your money?

Would you refuse that insane SOCIALISTIC UNEMPLOYMENT?

Please.

reply to post by David9176


Ive been dead broke and slept in my car for 3 weeks.

Not once did I ever ask for any government funded help.

I learned a lesson from the mistakes I made, which I why I adequately plan ahead now by having 6 months worth of living expenses socked away.

You claim to be a Constitution supporter correct?

Surely you see the irony in claiming to support the Constitution while you also support such unconstitutional policies as wealth redistribution.

1 Billion is actually 1 thousand million, not 1 million 1 million. A Trillion is 1 thousand Billion.

So if you wana see 1 Trillion in millions it would be 2,000 million, i think

Anyways, the bailout package that was for 3 Trillion was from the private sector, you can look it up.

The public is broke, where do you guys think the U.S. corporate government gets funding? From the "tax payer" which is the public, which is broke(the national debt). You can't borrow from the taxpayer when you are getting money from China.

Private sector is still operational and can create funds without any borrowing.

reply to post by brainwrek

If said profit is lowered by government regulation, high wages, or union contracts, the only natural course of action (and smart business decision) is to go somewhere else.

Unions are NOTHING compared to what they used to be. Union membership is way down.

Have you always been outraged by all of these taxes? You must have hated every President prior to this one as taxes were higher then than they are now.

This country functioned just fine with high corporate taxes for most of our history.

By supporting tariffs, you also support paying more for products correct?

Yes....of course that is inevitable. What would you rather have? Pay more for crap because of a weak dollar...or a slight increase in tariffs to curb the budget...which by the way...would be huge. Prices are going to go up either way. If tariffs are raised...then small businesses can compete with the big boys and boost our economy and increase hiring. I'm not railing against small businesses...I work for one. I'm talking about the big boys.

It makes sense to me...if anyone has any other ideas on how to fix this mess let me know...but a flat tax cut across the board is not it.