Last time he tried this, all his rich buddies, who were making massive donations to Obama’s campaign, along with other Democrats, Democrat groups, and outside Democrat groups, felt this was great. They were like “yeah, raise my income tax.” I doubt they’ll be so enthusiastic this time
(Huffington Post) During his State of the Union address on Tuesday, President Barack Obama will lay out a plan to extend tax credits to the middle class by hiking taxes on wealthier Americans and big banks, according to senior administration officials.
Under the plan, the capital gains tax for couples with income over $500,000 per year would be raised from its current level of 23.8 percent up to 28. The plan would also strip a tax break, known as a “step-up,” that allows heirs to avoid capital gains taxes on large inheritances.
In addition, the plan would institute a new tax on the biggest financial institutions, basing the fee on liabilities in order to discourage risky borrowing. The administration says the fee would hit the roughly 100 banks that have assets of $50 billion or more.
So many of those rich folks, such as Warren Buffett, would not have been affected much by an income tax increase. Raising the capital gains rate, along with several of the others Obama is trotting out, will have a big effect on The Rich. This has zero chance of passing the Republican Congress. Not that Obama will actually do more than give a speech, as no one actually expects Obama to do anything as pedestrian as sending legislation over to Congress.
The president’s plan would use revenues from those tax code changes to finance credits aimed at the middle class, officials said. That includes extending the earned income tax credits to families without children, which would benefit an estimated 13 million low-income workers, while also tripling the maximum tax credits for child care in low- and middle-income homes.
This part could happen, I’d suspect the GOP Congress could jump on reducing taxes on the mid-low income citizens. Of Course, Team Obama partially portrays the entire thing as somehow helping make the economy run better. They never explain how, nor do they explain why they didn’t do this anytime over the last 6 years, particularly during his first two years when Congress was in the hands of Democrats. The other reason?
“This proposal is probably the most impactful way we can address the manifest unfairness in our tax system,” an administration official said.
Of course. Redistribution of wealth. Class warfare. The same ol’ same ol’ schtick. Of course, the tax code is in fact unfair, in that it fails to provide equal treatment under the law, having different rates for different earners. Having different breaks that only some people are eligible for.
In addition to the tax credits, the president’s proposals will also include a plan to give more workers access to retirement accounts. Employers with at least 10 workers who don’t currently offer their employees a 401(k) would have to enroll them in what’s known as an automatic IRA, a plan that Obama has included in previous budgets he’s proposed.
While it’s nice for companies to offer 401(k)’s, is it government’s job to force companies to offer them? No. No it isn’t.
Another reason for doing this?
(Fox News) Obama’s call for higher taxes on the wealthy is likely to further antagonize Republicans who are already angry with the president over his vows to veto several of the party’s priorities, including legislation to approve construction of the Keystone XL oil pipeline, make changes to the president’s signature health care legislation and block his executive actions on immigration.
Obama wants to pick a fight. It’s what he does. He knows that the tax increases won’t get through Congress, and he’ll assault and impugn Congress over the tax decreases which they will most likely support during the SOTU speech. This is the reason the plan was released early, to make sure Congress will have had time to read and hear about it: he can denigrate Republicans for not taking action immediately. Like Monday and Tuesday.
Expect this to be a very dry and very boring State Of The Union address, with even more people tuning out.
Crossed at Right Wing News.
The Republicans will be forced to defend their bizarre beliefs that the wealthy have too little and the poor and middle classes have too much.
It appears the Dems have decided to be Dems again, and it comes at a time when America needs it most.
Jeffrey is wrong: it’ll never even be brought up for debate.
But he’s right in one respect: even he recognizes that the President’s proposal is not a serious attempt at doing something, but just another campaign broadside. Barack Hussein Obama has achieved more separation between the role of candidate, at which he absolutely excels, and the role of President, at which he absolutely sucks, than anyone else, ever.
Our esteemed host wrote:
Because it was never meant seriously, of course. However, since all bills for raising revenue must originate in the House, the President had no chance of success on the legislation since January of 2011.
The section you like? The Democrats would claim that it isn’t revenue neutral, and couldn’t be done without increasing taxes on the most productive Americans, and President Obama would have to veto it. However, I wouldn’t support those proposals either, because they are just more wealth redistribution: the earned income tax credit isn’t for the middle class at all, but for the poor, who already receive way, way, way too much in tax beaks, government subsidies and flat out government gifts.
We should all be taxed the same!
Socialist Jeffrey wrote:
My belief is that every American has what he has earned. If you are poor, it’s because you haven’t been productive enough, you haven’t worked hard enough and smart enough to not be poor.
Dana,
The poor and middle classes are the victims here. Did the American middle class lose its way since 1980 and decide to work less hard and less smart? Since 1998 the median household income has DROPPED 10%!
Really? Have Mitt Romney’s sons “earned” their $100 million trust funds? Passed along tax free, I might add. Or were they just lucky winners in the sperm lottery?
Did Chelsea Clinton “earn” $600,000 a year from NBC? That’s over 10 times what the best elementary teacher in an impoverished district in Texas makes. I bet the teacher works harder and smarter.
The state university of everywhere pays their football coach 4 million dollars a year. The wealthy can deduct their contributions to the university, used in part to pay the coach. This of course means the US taxpayer is subsidizing the $4,000,000 salary of Coach Dollar at State U! Nice scam. Non-profits all over the US run the same scam – Paying execs exorbitant salaries subsidized by tax-free donations. We could easily fix this in the tax code.
Corporations deduct the expenses of their corporate jets and require their execs to use them for both business and personal travel, charges the execs commercial coach prices. So grade school teachers are subsidizing the private travel of the families of corporate execs! Yea, America. Did the teenagers of wealthy CEOs “earn” their taxpayer subsidized travel? I report, you decide.
Wouldn’t a true “free” market allow a young entrepreneurial Black teen in East St. Louis with balls and a Glock to make a good living selling cocaine to white folks? And allow a pretty 20 year old to have sex with older men for money?
Did the Wall Street bankers and their investors “earn” the trillions of US dollars thrown their way after they nearly ruined the world’s economy? The homeowners they swindled lost their homes – the execs pocketed billions. The bankers owned our government though. Is that how they “earned” their taxpayer largess? By buying Washington?
And really? Why should unearned income (capital gains) be taxed at a lower rate than wages?
And who decides how much someone “earns”? Our rigged system?
The system is rigged to support the wealthy. How is this done? The wealthy control our government! Duh.
And you dare talk about productivity?? Worker productivity rises, wages stagnate but profits, dividends, stocks go through the roof?
How does this happen, you ask (you wouldn’t ask, lol). Our legislatures pass and our Presidents sign, and our Supreme Court upholds policies that support the transfer of productivity gains to the wealthy and away from workers. How do they do this, you ask (you wouldn’t ask, lol). By putting American workers in direct competition with lower paid foreign workers – a result of our international “trade agreements”. By keeping the value of the dollar high. Monetary policies that fight even modest inflation at the expense of employment. Fiscal policies that keep unemployment high, even in recessions. Union busting.
And are we giving citizens, united in outrage, a larger voice? No, not since Citizens United and subsequent rulings have turned over more of America to the monied elites.
The practical outcome that apologists for inequality ignore is that there are hundreds of millions of hard-working Americans tired of your bullshit. Some Dem elites recognize that we’re on the brink. The system as is, is unsustainable. All feudal systems are fragile and short-lived without severe government repressions.
What do you think Occupy Wall Street, the Tea Party rank and file and the Ferguson type protests are really about?
The wealthy have been living off the backs of workers forever, but the past 30 years have seen the wealthy in America deciding not to share productivity gains with those who made them wealthy.
And you think the poor deserve to be poor and rich have “earned” it.
Essentially, Leftists believe in punishing Other People for success (of course, Leftists fail to pony up their won money voluntarily) while rewarding failure. They are also abysmal when it comes to offering charity for those who are downtrodden. At least with their own money.
blah, blah, blah… get a new schtick
No one is being punished for success. Taxes are not punishment they are the “price for civilization.” Why do you hate civilization?
Please address how further cutting taxes for the wealthy and further deregulating their money grubbing ways will help the poor and middle classes.
Our economic system has been on a collision course with failure since the Reagan Revolution. The system does not generate enough well-paying jobs to support a middle class, period. And it’s the result of Democratic and Republican elites who have enacted policies to support the wealthy at the expense of the working classes.
Have the billionaire daughters of Sam Walton and their kept husbands “earned” their billions by keeping the compensation of their serfs, er, associates, low? You and I subsidize their billions by paying for Medicaid and food stamps for many of their workers. If the associates don’t like it, they can take a job at McDonald’s, right? Or maybe move to China where the cost of living is lower, since that’s where their manufacturing job went. How hard working and smart do you think the Walton clan is?
We can change the policies so that we commoners are not subsidizing the wealthy. Wouldn’t that be fair?
We have a consumer driven economy. What happens when our workers can’t afford to buy your stuff?
If you want to continue this downward spiral, that’s your business.
Jeff,
You have absolutely zero knowledge of basic economics and monetary systems, yet that does not stop you from long comments that make no sense and conclusions that are absolutely wrong.
Our tax system is a joke. The only ones paying taxes are the upper income and then folks like you complain that they don’t pay. That does not make sense unless you are lying to yourself and others. When we started this system, we had everyone pay 3% of their income. No one worried what the rich were doing and no one cared. That is what we need to return to. Everybody pays the same percent of their income and we lock that in with a Constitutional amendment that prohibits people paying above a certain percent. Then everyone can go about their business without this constant bickering about who pays and who doesn’t. But people like Jeff would still have issues with it.
I started from zero, with nothing but my own talents and made money. I intend to keep that money as it represented significant sacrifice and pain. I will enjoy its benefits, not some guy down the street that did nothing. And Jeff, I know poor people. I have taken care of them for 40 years. They are lazy, make poor choices, bad decisions and don’t feel the need to be held accountable for their actions.
As to the economy, Obama is the one standing in the way of improvement. Behind him are the Dems who really desire that we continue in a depression, just like they did in the 30’s. It would be simple as pie to get out of where we are, but the Dems would block every effort.
dave,
You are entitled to your opinions, regardless of how ill-informed they are.
There is no good reason to believe that everyone should pay the same percentage in taxes. None. It’s a belief, not reason. Why should we continue and improve our progressive tax system? Because it has worked.
When you have an economy where people work full time and live below the poverty line – you have a problem. Does it make sense to think you can solve that problem by cutting taxes on the wealthy and raising taxes on the poor?
Do you really believe we can go back to a 3% income tax?
0.03 x 15,000,000,000,000 = $ 450 billion. That’s about half of what we spend on defense each year. Would you eliminate Social Security and Medicare? The EPA, FDA, USDA, FBI, the courts?
[…] of the Congress passing a tax increase on the most productive Americans are vanishingly small. William Teach asked why the President didn’t propose these things while the Democrats still controlled the […]
Here’s an article with some good points on our crumbling middle class:
http://www.huffingtonpost.com/larry-summers/how-to-save-democracy_b_6484320.html
J- what a joke. He could have passed this when the Dems controlled both houses of congress. As said elsewhere, the Dems probably don’t want these increases to actually happen, they just want to blame the Republicans for not enacting them- just like the Dems didn’t enact them when they had the chance.
j,
You’re confused by time and place. Do you remember the state of the economy then? Are you really recommending a tax increase in the depths of a recession?
It’s interesting when right-wingers accuse the Dems of NOT raising taxes! Dems are wrong when raise taxes and wrong when
they don’t!
flat tax …. we all put in the same percentage at the most two percentages but still flat. that way everybody does something .. and no more earned income credit .. free money no more!
Jeff,
I believe, and other political thinkers have supported this, that if you allow people to vote who do not put money into the system, then the system will degenerate into chaos and revolution. That is being proved now.