Budget would end Bush tax cuts after 2012
GOP opposes plan that would raise taxes on businesses and the wealthy while cutting taxes for the working poor and the middle class.
This article is by Stephen Ohlemacher of The Associated Press.
President Barack Obama's budget proposal resurrects a series of tax increases on certain corporations and the wealthy that were largely ignored by Congress when Democrats controlled both chambers. Republicans, who now control the House, are signaling they will be even less receptive.
The plan unveiled Monday includes tax increases for oil, gas and coal producers, investment managers and U.S.-based multinational corporations. The plan would allow Bush-era tax cuts to expire at the end of 2012 for individuals making more than $200,000 and married couples making more than $250,000. Wealthy taxpayers would have their itemized deductions limited, including deductions for mortgage interest, charitable contributions and state and local taxes.
"What we've done here is make a down payment, but there's going to be more work that needs to be done, and it's going to require Democrats and Republicans coming together to make it happen," Obama said.
Obama's proposal would extend tax credits for college expenses and expand them for child care. A more generous Earned Income Tax Credit for families with three or more children would be made permanent.
The plan would enhance and make permanent a popular business tax credit for research and development, and would provide tax breaks for investing in manufacturing and for making commercial buildings more energy efficient.
In all, the budget proposal would impose about $730 billion in new taxes on businesses and wealthy individuals over the next decade, while cutting about $400 billion in taxes on middle-income families, the working poor and other businesses, for a net tax increase of about $330 billion.
Those numbers, however, don't include additional tax revenue from letting Bush era tax cuts for the wealthy expire at the end of 2012. Letting those tax cuts expire would generate an additional $709 billion over the next decade, according to the budget proposal.
Many of the tax increases were in the president's previous budget proposals, offered when Obama could expect a more friendly reception from Congress. Lawmakers from both political parties, however, have been wary of limiting the ability of high earners to deduct charitable contributions out of concern it will hurt non-profit organizations.
A group of Senate Democrats has come out in favor of raising taxes on oil and gas companies, but Republicans, who generally oppose such tax increases, have the votes to block them in the Senate.
House Majority Leader Eric Cantor, R-Va., called Obama's proposal a missed opportunity to address the nation's fiscal problems.
"We need a government that finally does what every other American has to do in their households and their businesses, and that's to live within our means," Cantor said in a statement. "Instead, President Obama's budget doubles down on the bad habits of the past four years by calling for more taxes, spending and borrowing of money that we simply do not have."
Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, said Republicans will oppose the tax increases in Obama's budget proposal.
"Keeping pace with its liberal tax-and-spend agenda, the Obama administration hits almost every sector of our economy with a tax hike -- energy taxes, taxes on hiring, higher income taxes," Hatch said. "That's not how we get our country moving forward."
Obama has called for reforming individual income taxes and corporate taxes, saying he wants to eliminate special interest tax breaks and use the additional revenue to lower overall tax rates. Obama's budget proposal, however, breaks little new ground on the issue.
"Successful comprehensive tax reform is a long process, often taking several years," Obama says in his budget message. "But even though it is a daunting task, we cannot afford to shirk from the work."
In December, Congress extended through 2012 a series of tax cuts enacted under former President George W. Bush. Obama's proposed new budget calls for letting the tax cuts expire for the wealthy at the end of 2012, while making them permanent for individuals making less than $200,000 and couples making less than $250,000.
Republicans want to make all the tax cuts permanent, setting the stage for a showdown that could play out in the middle of the 2012 presidential election.
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Johnny522 you just dont get it. Why tax the rich at a higher rate? Because they keep lowering wages for the workers and paying themselves more money. They are essentially taking money out of the economy because they arent the ones that spend money.
$100,000 in the bank account of a millionaire does less good in the economy than $100,000 in the hands of 10,000 workers. The workers will pay their bills and buy goods and services. The bank will use it to invest to make more money.
The economist argument is that if the bank has the money they will loan it to companies to expand. That only works if there are people with money buying more than the companies need. If there is no need to expand the companies wont.
I see ... so we'll do Einstein's definition of insanity ... keep doing the things the same way and expect a different end result.
$700 Billion added $$ coming in from raising the tax rate on those making over 250 GRAND a year, going back to where the rate was under Reagan and Clinton, that is a fair amount of dough. It is NOT fair that those making 100 grand a year pay SS taxes on 100% of their income and those making 2, 3,4,5 and higher hundred don't.
Corporations pay no taxes? sure why not ... but no using public roads by their trucks which all else pay for, bridges, rail systems, anything that is federally subsidized, no lobbying Congress for special perks and advantages over competitors or being able to exempt from regs which almost always do damage to the still taxpaying, no free rides on cleanups from health hazards created and prolonged court battles ...seize their assets including those of their principals and eff'em., and if they cause an economic meltdown, they are immediately nationalized, all their top management jailed and all assets seized. Just say when any time. Being incorporated does not give license to burn and pillage. Business is business .. it costs so much, it brings in so much ... if there is a profit ...which most Corps don't have, they break even, they there is a tax bill, but the rate should not be 40% ....15% with no loopholes would be better, and finally make R&D a business cost just like production, admin, sales and marketing, and overhead.
My O my there's some ire here on this subject .... Food for thought ..... Corp taxes should be lower rate, but all loopholes plugged ..... a 3600 page tax code ???? Let the Bush cut on upper bracket die out ... absolutely ... 250 grand a year ... let's think on that one ...20 plus thousand per month .. the 3% difference is what? 2,000 a year ? Here's another, whatever the poverty rate is in the US, make that amount tax free, it's amazing how just a little $ more is one less Govt. funded support check that doesn't have to be written ..
While we are it and fairness ... why does the guy knocking down 100K per year pay FICA on all of it, and the guy getting 500K per year only on 20%. Getting rid of the caps, but not making biz keep matching after a threshold ,would do wonders to shore up SS.
Just some musings ...
There shouldn't be corporate taxes. You make some big company pay $1 million in taxes and guess what, that is 20 people per year they can't hire or $1 million they can't spend to improve their facilities/technology which then creates jobs at those businesses that receive that $1 million. There certainly shouldn't be punitive taxes on corporations just because you don't like them. That is blatantly unconstitutional to use taxes as a penalty.
Why do Americans hate the "rich" so bad? I'm not one of the rich by any means but I still don't support raising their taxes. Most of them earned their way to that salary. I recently got an email that went something like this, "A father and daughter were talking after she returned from college. She couldn't believe he didn't support raising taxes on the rich. He quickly changed the subject and asked how her grades were. She said she had a 4.0 despite a difficult schedule that has kept her studying 24/7. The dad then asked how her best friend and roommate was doing. The daughter replied that she thought she was worried she might flunk out. She is always partying, never goes to class, and never studies. If her GPA doesn't go up soon, she will lose her scholarships. The dad then said, 'Well you need to go down the records office and tell them to take 1.0 off your GPA and give it to your friend. You will still have 3.0 which is good enough and your friend will get to keep her scholarships. The daughter was furious at the idea explaining that she worked hard for her GPA and her friend does nothing but party. Why should she have to give up what she worked hard to obtain? The father replied, welcome to my side of the fence." EVERYONE should be able to keep what they earn and not taxed to death because they earn more than the next guy. You guys are jealous pathetic losers.
The reason the guy making $500,000 isn't taxed on Social Security is because the guy making $500,000 isn't going to collect near as much in Social Security. If you make too much, you start to lose benefits on SS. Why should he have to pay taxes on $500,000 when he won't collect as much as the guy making $100,000 as the SS office punishes him for being successful? SS was supposed to be voluntary until some idiot democrat back in the day made it mandatory. Time to make it voluntary again. I'll take care of myself. I don't need or want the government involved in my retirement.
Funny how everyone bitches about the class they're in being treated unfairly, or the classes they're not in getting all the benefits. Let's make it perfectly fair for everyone. By instituting the following:
1) Eliminate income taxes alltogether in lieu of a national flat federal sales tax.
That is as fair as it gets. You earn more, you buy more, so you pay more taxes. Simple.
Cut the army of I.R.S. people down to a size that will then handle not personal or business income taxes, but sales taxes.
Police and monitor like crazy all sales to reduce fraud.
Make the penalty so severe for cheating that businesses won't dare cheat on reporting their sales.
Raising taxes is NEVER a good idea. Let's change the way they're collected to make it fair for everyone and reduce government in the process.
A phased implementation would ensure the federal budget doesn't go to all time lows in one year. Also, tourists would be contributing to our bottom line.
The differences between the budget surplus at the end of the Clinton administration, and the huge deficits at the end of the Bush administration were: Bush tax cuts for the rich, wars in Iraq and Afghanistan, and increases in spending (creation of the Homeland Security office and a new drug program). Republicans have opposed all attempts to change the budget.
The super-rich and multinational corporations have co-opted the Tea Party movement for their own purposes - elimination of corporate taxes, environmental regulation, crippling unions, and elimination of retirement benefits (in the form of social security taxes).
If the Tea Partiers were unhappy with the general economy before, they will be even less happy when they find that they can be fired at any time, can get screwed out of retirement benefits, get sick because of pollution and can't afford health care, and have to pay taxes in the form of fees and sales taxes even when they are unemployed. All the while, rich people are getting richer and corporations pay even less taxes than they do now.
Sorry but you don't get it. It is their money, they earn the money and the right to spend it their way. They can help the economy by letting other people borrow and using the money.
If I need money, with God's help I figure it out and earn it
At one time during the Carter era I made money off interest. I am waiting for that one again.
BE FAIR and remember the law of supply and demand.
Look at this one simple fact. 40% of Americans end up with a zero federal tax liability. That's about 125 million scumbags not paying any federal taxes.( I propose taking away thier voting rights, or ship them to Mexico with the illegals) My wife and I will pay $50 grand for state and federal taxes for 2010. I don't want to hear your sob story of why the rich or better off need to carry your lazy a**. My wife is a high school drop out with a Master Degree earning 6 digits and I work 60-70 hours a week delivering fuel. We EARN IT!!!!!!!
Funny how the bleeding heart liberals are so concerned about the poor and down and out but when it comes to tax time do they write a check for an extra 10,20,30,40% so they can feel better? Hell no. Take Obama's taxes for 2009. As I recall he made 5 million dollars and paid 1.9 million in taxes. Now how come he did'nt give the rest to the government and leave himself only with 250k???
This is America People!!!! If you have not obtained the American dream then you haven't worked hard enough. I see legal immigrants every day that have been in America less than 10 years and are living the American Dream. It's sad, generations of liberals want what other people have but have been brainwashed to believe they are entitled. Get out of the welfare line and make it happen!!!
Liberals must have something missing in thier DNA!!!!
My 2 cents worth
My gosh the republicans are idiots. Obama and the democrats havent done much besides blame Bush and the republicans which is getting old. So they regained some power in congress. And now they are trying to crap it away again. Do they not realize that turning down tax raises on the rich is going to give the democrats support? I mean really why does someone making $300,000 need a tax break? Its not like that person spends as much as 10 people making $30,000.
Its not like the rich people are helping to bring the country out of the recession (we need to change what determines a recession. Just because GDP goes up 2 straight quarters doesnt mean we are out of the recession. Only when GDP raises above pre recession numbers for 2 straight quarters are we out of it.)
Want to fix social security? The limit of tax is capped at $109,000. Raise it to no cap. Just think of how many people in this country make over $109,000 that arent paying the tax and how much extra cash it would bring in. Anyone that makes over $1 million in any 1 year of their life should be exempt from being able to claim social security when they retire but they should still have to pay the tax.
I fall in the lower middle tax by choose! I don't see how raising taxes on the super rich is going to do anything. For one thing don't rob Peter to Pay Paul. It is not fair. We have a wagon and it is full of people on what they call their money, when it actually is somebody else's money almost half is in the wagon and the taxpayers is trying to pull it.. Their is only two rightfully entitled program (they are Social Security and Medicare)
I vote Rep because of abortion issues and moral issues. DADT. I am also Union and proud of it. I could have been management but choose not to. Their are several Union Bro. that vote the same way I do.
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