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Action on Obama's tax proposals unlikely

The president has proposed raising taxes on the wealthy and rewarding firms that bring jobs home before, but he got nowhere then.

By Teresa Mears Jan 25, 2012 8:15PM

What are the chances that President Barack Obama will persuade Congress to raise taxes on the rich and reward corporations who bring jobs home in an election year?

 

He'll be lucky to push through an agreement on the payroll tax cut, which is set to expire Feb. 29 unless Congress agrees to extend it. That makes substantive tax reform unlikely.

 

Changing the tax code is likely to be a years-long process, and even the members of Congress who would like to see changes are unlikely to push for reform this year. As Reuters notes:

Most of these ideas have stalled for years in Congress -- even some Democrats say they can wait for a complete overhaul of the tax code.

Obama has been trying since his 2008 election to change the tax laws that reward companies that take jobs overseas, but has gotten nowhere, Jonathan Weisman wrote in The New York Times.

 

The president proposed raising taxes on the rich last fall. In Tuesday's speech, he framed the issue as one of fairness. "You can call this class warfare all you want," Obama said in his address. "But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense."

Voters are split on the issue, according to a New York Times/CBS News poll released Tuesday. That poll found that a majority of Republicans approve of taxing investment income at a lower rate, while a majority of Democrats and Independents believe it's not fair to tax capital gains at a lower rate than wages are taxed.

 

Here are some comments on Obama's tax proposals:

  • Norm Ornstein, American Enterprise Institute: "Tempted as they may be by more tax cuts, anything that smacks of a deal with Obama, or a victory for Obama, especially one that undercuts their theme -- however detached from the reality -- that Obama is a tax-increaser, will be reflexively resisted by Republicans in both houses."
  • National Journal: "The upper class and middle class receive the bulk of the tax breaks in the current code: from mortgage tax deductions to child tax credits to deductions for state and local taxes. If the president is serious about reducing the deficit and making the tax code simpler, he’ll have to ask the middle class to take a hit financially and give up some or all of these politically popular deductions. And, taxing the middle class was certainly not a theme in Tuesday night’s message."
  • GOP presidential candidate Mitt Romney: "He's really trying to divide America. . . . The question is whether we're going to eliminate the capital gains tax break. "So if you say we're going to raise that dramatically, you're going to choke off a lot of the capital that goes into creating new enterprises and creating jobs. It's the wrong way to go."
  • GOP presidential candidate Newt Gingrich: "It would lead to a dramatic decline in the stock market, which would affect every pension fund in the United States. It would affect every person who has a 401k. It would drive capital out of the United States. It would be the most anti-job step we could take."
  • Financier Warren Buffett: "The question is what is fair when you have to raise multi-trillions to fund the United States of America. (Raising taxes) will not change my behavior. I have paid all different kinds of rates and I’ve always been interested in making money. I believe this should be a defining issue. Debbie (Bosanek, his secretary) works just as hard as I do and she pays twice the rate I do."
  • Democratic Rep. Raul Grijalva of Arizona: "I think that's where the American people are, and we would be foolish not to run where the president's running."

More from MSN Money:

 

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16Comments
Jan 26, 2012 8:58AM
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Let's talk about fair.  Is it really fair that almost 50% of the citizens of this country pay no income taxes?  Do those citizens not benefit at least as much as the 1% (as some like to call them) from the constitutional services that our Government provides?   Currently they are benefiting a great deal more, considering the Food Stamps, Welfare, EIC, School Lunch Programs and the like. 

When you are really ready to talk about fair then we can talk.

Personally I don't want my Capital Gains taxed at a higher rate.  Warren Buffet may be able to afford it but I can't.  And as we all know our government is not capable of making distinctions such as this. 

If we really wanted to increase revenue we could tax campaign contributions at a 50% rate.  That would be a good start. 

Jan 26, 2012 9:23PM
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It's very unlikely Obama will allow the construction of a pipeline, either.  As long as what's good for America is fodder for the Congressional wars, neither side is likely to give on anything. 

 

If a free cure for cancer came along, it's unlikely to get past Congress unless somebody profits from it.

Jan 27, 2012 4:00PM
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we  need fresh faces in washington D.C. very much, on both sides
Jan 27, 2012 11:59AM
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Warren Buffett - ""The question is what is fair when you have to raise multi-trillions to fund the United States of America. (Raising taxes) will not change my behavior. I have paid all different kinds of rates and I’ve always been interested in making money. I believe this should be a defining issue. Debbie (Bosanek, his secretary) works just as hard as I do and she pays twice the rate I do.""

 

So Warren Buffett pays an effective rate of 15%.... apparently his secretary pays an effective rate of about 30%.  I would tend to argue, that when Obama goes after the "millionaires and billionaires" (i.e. everyone making over $250,000), he will end up hitting her as well.

Jan 28, 2012 10:26PM
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Actually the bottom 50% do pay taxes. You've been lied to by FOX News. They pay sales tax, federal gas tax, etc. It's just that their incomes are so low and getting lower compared to the 1 % that if they have a mortgage, 2 kids and real estate taxes, the deductions wipe out their federal tax obligations. It's called the working poor... their not black... their not white.... their not hispanics .... their just Americans doing the best they can. Liberty is threatened when all the money is in the hands of a few. 400 families US have more money than 50% of  the rest of the people in the USA combined! It's about LIBERTY
Jan 30, 2012 6:01AM
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Any taxpayer in the country can sent a check to the US Treasury earmarked "National Debt". Anyone, anytime. For the super rich to say----go ahead----tax me more, what they're saying is that I'll pay it if you take it, but not until. Every taxpayer in the country takes advantages of the deductions given us. The problem with higher tax rates on anyone is the more that you give them----the more they'll spend. They really don't care who pays it as long as they get the bucks. The payroll tax cut is nothing more than taking monies from SS and giving it to you instead. Robbing Peter to pay Paul. Does it make sense to anyone to take monies from an already struggling program and cut it's revenues???? REMEMBER in Jan., 2013, the GWB tax cuts expire and there'll be a general tax increase on everyone. Don't hear our trustworthy politicians making mention of that too much. NO, a tax increase now is just icing on the cake. What I hear from congress is " We can't stop spending, PLEASE, PLEASE, give us some more money. 
Jan 29, 2012 12:34PM
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Gerrrr53 is a pinhead!!

 

His idea of Liberty is stealing from one group to give to another group. He would also lead you to believe that a family of 4 making 50k cannot pay any net federal taxes!!

 

I say country first!!!! Then the cell phone, ipod, computer, flat screen TV, cable tv, etc, etc.

 

Liberals are an infestation on this country!! I want, I want, I want, somebody else to pay my way.

Jan 27, 2012 11:50PM
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If 50% (I believe that number is high) people in the US do not pay income tax, to me that says that we have a lot of people not making enough money.  The present tax code does have a low rate for low wage earners.  If that 50% group of people's wages doubled, then they would be paying more  taxes.  If this trend continues, soon people will be saying that 80% of the people don't pay taxes, because 80% of wage earners don't make enough money.   
Jan 29, 2012 7:29PM
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Grrrr53 and PO Carl,

 

It may help you to reserch some facts from the IRS. There are 147 million tax filers, the top 10% pay 70% of revenues taken in by the government(I fall in this range), the bottom 50% pay 2.25% , the bottom 47% pay ZERO net federal taxes. The median pay is 50k per filer.

 

I find it interesting just because someone pays state taxes and maybe property taxes, fuel taxes, and many other state and local taxes they feel they don't need to pay net federal taxes.

 

Take a little closer look at who actually pays net federal taxes, we have paid 93k in the last 5 years. And Democrats would have us pay even more???

Jan 29, 2012 4:54PM
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Taxed too much195:  How does a family of 4 making 50k not pay any Federal income tax???  If this is true, but I believe you are just pulling numbers out of the sky, they must give most of their income to charity, because I have been in that tax bracket for several years.  I managed to buy a small house, and deduct a few things from my income  No matter what the income level, everyone applies the same tax laws to their income.    
Jan 28, 2012 10:37PM
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How do you think the dictators in the middle east control the populations of their country. The government leaders have all the money! It's not Republican it's not Democrat it's about Liberty!
Jan 27, 2012 3:53PM
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i think the idea of taxing contributions 50% is a very novel idea,we need ideas like this
Jan 29, 2012 5:48PM
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Taxed to much 195.....Let see... do you take a standard deduction or file itemized... but you don't want those making 50K and under to do the same. If your in business...do you write off your travel expenses, depreciation, entertainment, a car for your wife even though she never comes to work but the working poor are not entitled to their deductions because they may not pay federal income tax as a result?  Did you go to a public school I paid for, do you drive on public roads I paid for, are you protected by a police department and judicial system I pay for,  a fire department I pay for, do you eat food that I  insure is good and cheap and plentiful, do you fly and are protected from collisions by the FAA I pay for, did you send you kids to a doctor who has a medication for which I paid for the research to develop, how about the military that I pay for to protect you, the energy department which keeps our cost of gasoline cheap...buddy, it is $8.00 per gallon elsewhere in the world... so who's on the take???  
Jan 30, 2012 1:06AM
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Taxed too much195:  Like I said, all taxpayers use the laws of the bracket they fall into.  Don't worry, as wages continue to go down for the working poor, someday you will be able to say that the bottom 80% don't pay any income tax!
Jan 30, 2012 2:22PM
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Grrrr53 what country do you live in?  Police, firefighters and most school taxes are paid out of state and local taxes and have little or no barring on federal taxes.  .I'm sure that the guy has a home if has has that kind of income and I'm also sure that he pays his real estate and school taxes.  So he he is already paying for those services.   If this guy is self employed he pays both the individual and business FICA payments.  You argument is poor at best and lacks real knowledge.   So what is your point?    
Jan 28, 2012 11:01PM
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