Obama to propose $1.5 trillion in new tax revenue

Discussion in 'User Submitted News' started by TLSS_N, Sep 19, 2011.

Sep 19, 2011
  1. TLSS_N
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    Member TLSS_N Who is John Galt?

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    WASHINGTON (AP) -- President Barack Obama will propose $1.5 trillion in new taxes as part of a plan to identify more than $3 trillion in long-term deficit reduction and slow the nation's escalating national debt.

    Obama's tax plan is aimed predominantly at the wealthy and draws sharp contrasts with congressional Republicans.

    It comes just days after House Speaker John Boehner ruled out tax increases to lower deficits. It also comes amid a clamor in his own Democratic Party for Obama to take a tougher stance against Republicans. And while the plan stands little chance of passing Congress, its populist pitch is one that the White House believes the public can support.

    The core of the president's plan totals just more than $2 trillion in deficit reduction over 10 years. It combines the new taxes with $580 billion in cuts to mandatory benefit programs, including $248 billion from Medicare.

    The administration also counts savings of $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.

    The deficit reduction plan represents an economic bookend to the $447 billion in tax cuts and new public works spending that Obama has proposed as a short-term measure to stimulate the economy and create jobs. He's submitting his deficit fighting plan to a special joint committee of Congress that is charged with recommending deficit reductions of up to $1.5 trillion over 10 years.

    In a defiant note, administration officials made clear Sunday that Obama would veto any Medicare benefit cuts that aren't paired with tax increases on upper-income people.

    Officials cast Obama's plan as his vision for deficit reduction, and distinguished it from the negotiations he had with Boehner in July as Obama sought to avoid a government default.

    As a result, it includes no changes in Social Security and no increase in the Medicare eligibility age, which the president had been willing to accept this summer.

    Moreover, the new tax revenue Obama is seeking is nearly double the $800 billion that Boehner had been willing to consider in July. Republicans were already lining up against the president's tax proposal before they even knew the magnitude of what he intended to recommend.

    "Class warfare may make for really good politics but it makes for rotten economics," GOP Rep. Paul Ryan of Wisconsin, the House Budget Committee chairman, said Sunday in reaction to one Obama tax proposal to impose a minimum tax rate on wealthy filers.

    Former President Bill Clinton on Monday dismissed GOP claims that the tax on the wealthy would discourage jobs creation and hamper economic growth.

    "Republicans in Washington always say the same thing," Clinton said on NBC's "Today" show. He called their argument an insult to wealthy Americans, including many who don't mind paying more.

    Key features of Obama's plan, as described by senior administration officials Sunday evening:

    -$1.5 trillion in new revenue, which would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.

    -$580 billion in cuts in mandatory benefit programs, including $248 billion in Medicare and $72 billion in Medicaid and other health programs. Other mandatory benefit programs include farm subsidies.

    -$430 billion in savings from lower interest payment on the national debt.

    By adding about $1 trillion in spending cuts already enacted by Congress and counting about $1 trillion in savings from the drawdown of military forces from Iraq and Afghanistan, the combined deficit reduction would total more than $4 trillion over 10 years, senior administration officials said.

    Republicans have ridiculed the war savings as gimmicky, but House Republicans included them in their budget proposal this year and Boehner had agreed to count them as savings during debt ceiling negotiations with the president this summer.

    Obama backed away from proposing sweeping changes to Medicare, following the advice of fellow Democrats that it would only give political cover to a privatization plan supported by House Republicans that turned to be unpopular with older Americans.

    Administration officials said 90 percent of the $248 billion in 10-year Medicare cuts would be squeezed from service providers. The plan does shift some additional costs to beneficiaries, but those changes would not start until 2017.

    Illustrating Obama's populist pitch on tax revenue, one proposal would set a minimum tax on taxpayers making $1 million or more in income. The measure - Obama is going to call it the "Buffett Rule" for billionaire investor Warren Buffett - is designed to prevent millionaires from taking advantage of lower tax rates on investment earnings than what middle-income taxpayers pay on their wages.

    At issue is the difference between a taxpayer's tax bracket and the effective tax rate that taxpayer pays. Millionaires face a 35 percent tax bracket, while middle income filers fall in the 15 or 25 percent bracket. But investment income is taxed at 15 percent and Buffett has complained that he and other wealthy people have been "coddled long enough" and shouldn't be paying a smaller share of their income in federal taxes than middle-class taxpayers.

    ---

    Associated Press writer Ricardo Alonso-Zaldivar contributed to this report. [/p]

    [​IMG]source

    I WILL NOT RIASE TAXES, for those of you who make $7.25 an hour and above!

    - side note... moving again, be back when I get internet.
     


  2. jesterscourt

    Member jesterscourt Not Brad.

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    raise has an "i" in it.
     
  3. AlanJohn

    Member AlanJohn くたばれ

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    Can someone explain to me what this means?
    I do not live in amerika so I don't know what taxes are..
     
  4. nando

    Member nando GBAtemp Addict

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    it means nothing since reps are so gong ho on obama failing, they wont pass anything he proposes unless it is NO TAXES FOR THE RICH and SHUT DOWN PUBLIC SCHOOLS
     
  5. Qtis

    Member Qtis Grey Knight Inquisitor

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    So in the end this will sum up to nothing. Basically the main problem in the US (also like many countries in the EU) is that the budget is too big and people expect to get something for free. Taxes are the way to pay it and the question lies in how you use the taxes. Raising taxes to a certain level in the US could help the government get the needed capital + actually make new jobs. Taxes =/= a bad thing. In the long run. Hopefully someone in the Congress starts to look at reality instead of just trying to win the next election..


    -Qtis

    ps. Regarding taxes I'm not a communist in the way that everything is state property. Still I don't mind paying taxes if I actually get something out of it. I make around 20000 dollars a year at the moment (studying full time, working on free time) and around 20% is taxed straight from my wages + around average 20% VAT. Out of the taxes I pay I've received education (studying at a University of Technology, one of the best here), free public healthcare and lots of other things. Looking at how things work elsewhere, it's not that bad a trade :I

    pps. We have quite a big progression in taxes here. If someone made about 100k per year, their tax per cent would be around 50% from the wages + other taxes like VAT etc. Technically you guys have still quite a way to go to match ours [​IMG]
     
  6. TLSS_N
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    Member TLSS_N Who is John Galt?

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    thanks, my keyboards all screwed up :/
     
  7. Celice

    Member Celice GBAtemp Advanced Maniac

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    I'm always at a lost when people start to instantly badger and complain that a president fucked something up--when most of the problems the country faces has been in development long, long before they came in. And were known about.
     
  8. MEGAMANTROTSKY

    Member MEGAMANTROTSKY GBAtemp Fan

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    Obama is just playing the crowd with the so-called "Buffett" rule. He knows full well that it won't pass. A similar measure was defeated in 2009 when the Democrats were in the majority in both the House and the Senate. He's acting the role of the rat trying to escape the sinking ship; he's engaging in populist demagogy because we aren't too far away from an election year.
     
  9. Gahars

    Member Gahars Bakayaro Banzai

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    Honestly, the furor over taxes bugs me.

    Yeah, nobody likes them, obviously. I mean, hey, who wants to give up their money? Still, during a time of economic recession, reasonable sacrifices need to be made. I think asking the richest of the rich to help out is completely fair.

    Paying taxes should have a system where you can pay the minimum, but paying extra is allowed. Those who take the extra plunge for their nation should be rewarded in some way for their civic service (more time to pay their taxes the next year, perhaps?), encouraging others to do the same.

    As long as there are checks in place to ensure that paying extra is never forced or mandatory, a system like that could possibly work.
     
  10. BlueStar

    Member BlueStar GBAtemp Psycho!

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    Similar debates over here over if it's right to scrap the 50% top tax rate. One of the coalition partners says yes, the other no.
     
  11. blahkamehameha

    Member blahkamehameha GBAtemp Regular

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    Yes, we must keep raising taxes, so the money can just be wasted in stimulus packages. Like spending 500000 to study shrimp running on treadmills (no joke, google it)
     
  12. Foie

    Member Foie That one guy

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    The thing about taxes, is that the higher the rates, the more people try to avoid them.

    For example, the unnecessary real estate a large corporation owns that they are going to sell: they'll hold on to it if capital gains taxes are increased. In fact, every single time in America's history capital gains taxes were decreased, the result was an increase in tax revenue. There are many investments a company or individual can make to reduce taxable income, and you better bet they will when rates are raised significantly.

    Higher taxes simply aren't a sustainable form of deficit reduction. Plus they punish the companies producing jobs and revenue, which certainly does not help the overall American economy. If a large corporation like Nike has to pay an extra $50 million in taxes, they may very well decide to not open up that production plant in Colorado that would employ 1000 workers, for example.

    I do like your idea of optional taxes that would provide additional benefits. I just don't know if anybody would optionally shell out the additional cash.

    Bottom-line: there are billions and billions of dollars going towards unnecessary spending that should be taken out before we start engaging in policies that hurt the already pummeled economy.
     
  13. Gahars

    Member Gahars Bakayaro Banzai

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    Foie, while I see many of your points, and while some of them are arguable, I think part of the problem is attitude.

    The Founding Fathers strongly believed in the Greek and Roman ideas of civic virtue: the idea that citizens would voluntarily make sacrifices for the benefits of the community at large. It inspired a lot of the Constitution, especially the role of presidency.

    If that attitude could be fostered and encouraged, as impossible as that may sound, when it came to the issue of taxation, I think that could go a long way.

    And back to the issues of taxes, they wouldn't be permanently increased. And while cutting them can have benefits, continuing them on the richest of the citizens after 10 years and our huge deficit isn't the wisest of choices. For now, it's necessary to "tighten our belts" (is that the phrase?); once the mess is (hopefully) at least somewhat resolved, then we can return to lessening the taxes.
     
  14. Haloman800

    Member Haloman800 a real gril

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    I can't wait till the Republicans turn this down.

    He hasn't negotiated/agreed to anything with them, they hold the majority, does he really think they'll approve it?
     
  15. Gahars

    Member Gahars Bakayaro Banzai

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    As for that, I'm going to hazard a guess and say absolutely not.

    Basically, if the Republicans pass it, he gets the credit for his bipartisanship and convincing his political enemies to compromise. If they don't, he can blame them for stalling efforts to save the economy.

    Either way, he's going to use those when running for reelection next year and promoting Democratic candidates for Congress (Harry Truman-ing up, basically).
     
  16. blahkamehameha

    Member blahkamehameha GBAtemp Regular

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    A girl asks to use her father's credit card, and he gives her permission to do so. She then goes wild and uses the living hell out of the credit card, charging right and left, maxing it out. The father finds out and is outraged beyond belief.

    The girl then asks her dad to buy her college books. She needs them for school, for her education and future. If the dad declines, he is a mean, uncaring dad who doesn't want his daughter to have a good education and good future. Right?
     
  17. LightyKD

    Member LightyKD Future CEO of OUYA Inc.

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    I totally agree! It's smart politics and I LOVE and hate it at the same time. Hopefully the US can start to get its shit together but if the wrong guy gets elected next year, we're *ucked! @ that moment I will be packing bags and hauling ass to Canada.
     
  18. Hanafuda

    Member Hanafuda GBAtemp Advanced Maniac

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    The wealthiest 1% of the US population already pays 38% of the total income taxes collected by the Federal government.

    The wealthiest 10% of the US population already pays 70% of the total income taxes collected by the Federal government.

    On the other hand, the bottom 50% (in income) of the US population pays only 2.7% of the total collected in income taxes. Most people in the lower half pay no income taxes at all.

    source

    Actually, not only does the lower 50% not pay income tax, most of them even profit at tax time. In other words, even if you earned little or nothing last year, there's a good chance the government will send you thousands of dollars just for filling out the tax form. Thousands of dollars that the government took from the people who actually earned it.

    Basic truth: Anything the Government gives you was first taken from someone else under threat of force.

    Now, I'm not saying all this because I'm opposed to taxes or think 'the rich' shouldn't be contributing to infrastructure, defense, and even social programs (though we desperately need entitlement reform). I'm just tired of hearing the constant tantrum that "the rich aren't paying enough" in income taxes when "the poor" aren't paying any at all. From the democratic party's point of view, every poor person they can get addicted to the free money is a guaranteed vote for democrats. So here's your check, poor people. Don't worry about not having a job or any dignity, we'll take care of you. Now go make some more poor babies.



    .
     
  19. Costello

    Administrator Costello Headmaster

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    in times like this, it's healthy for a country to have the wealthier people help out the poor.
     
  20. MEGAMANTROTSKY

    Member MEGAMANTROTSKY GBAtemp Fan

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    Your views regarding the American tax system do not correspond with reality. The federal income tax does not tell the whole story. I would suggest that you take a look at this document: http://www.ctj.org/pdf/taxday2011.pdf
     

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