Goldman Sachs analyst Alec Phillips just sent out a great chart showing what the guts of President Obama’s tax on the wealthy looks like, and how it will raise $1.6 trillion.
Take a look:
Photo: Goldman Sachs
Of course, President Obama is unlikely to run the table on getting each of these passed.
So here’s what Phillips thinks will really happen:
The agreement that policymakers will (hopefully) reach before year end seems likely to involve an increase in tax rates from current levels and it could also involve a limitation in tax preferences. Our fiscal assumptions for 2013 include a tax increase equivalent to allowing the upper income tax cuts to expire. This amount–$56bn in 2013 and a little more than $800bn over 10 years–is halfway between the President’s proposals and what Republicans would prefer.
The White House seems likely to succeed in raising at least this much revenue, though it remains to be seen whether it will come in one agreement at year-end, or a two-stage process involving a debate on more comprehensive tax reform next year.
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