Folks who demand budget discipline should be careful what they wish for.
According analysis from Bloomberg, Barack Obama’s new budget calls for $1.9 trillion in new taxes, and it’s going to come down super-heavy on the rich.
The budget released today would reinstate 10-year-old income tax rates of 36 per cent and 39.6 per cent for single Americans earning more than $200,000 and joint filers who make more than $250,000 as part of a broad $1.9 trillion tax increase proposal. It proposes to eliminate preferences for oil and gas companies, life-insurance products, executives of investment partnerships and U.S.-based companies that operate overseas.
“The administration proposes to restore balance to the tax code by providing tax cuts to working families, returning to the pre-2001 ordinary income tax rates for families making more than a quarter of a million dollars a year, closing loopholes, and eliminating subsidies to special interests,” the budget says.
Almost since the very beginning of his Presidency, there have been fears that Obama would seek to repeal the Bush tax cuts, and now he’s doing exactly that.
While taxing “the rich” isn’t a bad move politically — especially with the populist streaking running through American politics — the problem is that this will end up raising taxes on a lot of small businesses, whose taxes are taken out via the personal income of their owners. That’s the part that detractors will say, and with legitimacy, will harm the economy.
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