did not paste well but can read article at http://www.iht.com/articles/2009/02/26/america/prexy.php?page=1
I say "rich" because 250k/yr for a couple should hardly be considered wealthy
Obama would raise taxes of the affluent
WASHINGTON: President Barack Obama will propose further tax increases on the affluent to help pay for his promise to make health care more accessible and affordable, calling for stricter limits on the benefits of itemized deductions taken by the wealthiest households, administration officials said.
The tax proposal, coming after recent years in which wealth has become more concentrated at the top of the income scale, introduces a politically volatile edge to the congressional debate over the president's domestic priorities.
Obama also proposes, in the 10-year budget outline he was to release Thursday, to use revenues from the centerpiece of his environmental policy - a plan under which companies will have to buy permits to exceed pollution emission caps - to pay for an extension of a two-year tax credit that benefits low-wage and middle-income people.
The combined effect of the two revenue-raising proposals, on top of Obama's existing plan to roll back the Bush-era income tax reductions on households with income exceeding $250,000 a year, would be a pronounced move to redistribute wealth by reimposing a larger share of the tax burden on corporations and the most affluent taxpayers. Administration officials said the president would propose to reduce the value of itemized tax deductions for everyone in the top income tax bracket of 35 percent and many of those in the 33 percent bracket - roughly speaking, starting at $250,000 in annual income for a married couple.
Under existing law, the tax benefit of itemizing deductions rises with a taxpayer's marginal tax bracket (the bracket that applies to the last dollar of income). For example, $10,000 in itemized deductions reduces tax liability by $3,500 for someone in the 35 percent bracket.
Obama would allow a saving of only $2,800 - as if the person were in the 28 percent bracket. The White House said that it was unfair for high-income people to get a bigger tax break than middle-income people for claiming the same deductions or making the same charitable contributions.
The officials said the resulting increase in revenues, estimated at $318 billion over 10 years, would account for about half of a $634 billion "reserve fund" that Obama would set aside in his budget to address changes in the health care system. The other half would come from proposed cost savings in Medicare, Medicaid and other health programs.
In a document summarizing its proposals, the White House said it would finance coverage for the uninsured in part by "rebalancing the tax code so that the wealthiest pay more."
Obama's budget blueprint, which will project spending and revenues for the next decade, will flesh out the president's thinking on his energy plans to both cap the emissions of gases, particularly carbon, that are blamed for climate change and to promote development of nonpolluting energy alternatives.
The budget will show the government beginning by 2012 to collect billions of dollars in revenues from selling permits to businesses that emit the polluting gases, assuming the president's energy initiative becomes law as soon as this year, officials say.
Because utilities and other businesses presumably will pass on their costs to customers, Obama will propose to use most of the government's revenues from the permits to finance an extension of the new "Making Work Pay" tax credit beyond the two years covered in his just-enacted $787 billion economic recovery plan.
That tax relief, the administration will argue, will offset households' higher costs for utilities and other products and services from businesses passing on their permit expenses.
That tax credit annually would provide $400 to low-wage and middle-income workers or $800 to couples; Obama would like to increase those figures to $500 and $1,000. The credit phases out for those with incomes above $75,000 a year and for couples with incomes of more than $150,000; no benefit would go to individuals with more than $100,000 income and couples with $200,000.
The tax credit will begin showing up in the form of lower withholding for eligible workers beginning April 1.
The remainder of the projected revenues from the permits will finance Obama's campaign promise for $15 billion a year over 10 years to subsidize research and development of alternative energy sources, officials said. The stimulus package included a multibillion-dollar down payment to develop a national electricity grid to harness and distribute energy from such sources, including wind farms.
Behind the numbers in Obama's first budget is one of the most far-reaching domestic agendas in years, and at a time when the president and Congress already are grappling with an economic crisis worse than any in decades. The environmental permits would not take effect until 2012, at which point the administration expects the economy to have recovered. Similarly, some of the tax increases would not take effect until 2011.
Democratic congressional leaders promised to push the agenda, which parallels their own. "By the end of this year, I want to do something significant dealing with health care," said the Senate majority leader, Harry Reid of Nevada.
But the tax proposals could galvanize Republican opposition and give conservatives a concrete target for taking on Obama, who despite his political strength could find some members of his own party reluctant to embrace tax increases.
Senator Max Baucus, Democrat of Montana and chairman of the Senate Finance Committee, who has been drafting a health plan, predicted in an interview that the Senate could pass legislation by its August recess.
Baucus acknowledged that "there has to be revenue" to offset the costs of expanded coverage initially but did not endorse the president's proposal for limiting wealthy taxpayers' deductions.
"There will be lots of options to pay it, not necessarily that one," Baucus said. He would not say what revenue options he would support. But he said that tax increases of some kind would not prevent some Senate Republicans from aligning with Democrats to pass a health plan.
John M. Broder, Carl Hulse and Thom Shanker contributed reporting.
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I say "rich" because 250k/yr for a couple should hardly be considered wealthy
Obama would raise taxes of the affluent
WASHINGTON: President Barack Obama will propose further tax increases on the affluent to help pay for his promise to make health care more accessible and affordable, calling for stricter limits on the benefits of itemized deductions taken by the wealthiest households, administration officials said.
The tax proposal, coming after recent years in which wealth has become more concentrated at the top of the income scale, introduces a politically volatile edge to the congressional debate over the president's domestic priorities.
Obama also proposes, in the 10-year budget outline he was to release Thursday, to use revenues from the centerpiece of his environmental policy - a plan under which companies will have to buy permits to exceed pollution emission caps - to pay for an extension of a two-year tax credit that benefits low-wage and middle-income people.
The combined effect of the two revenue-raising proposals, on top of Obama's existing plan to roll back the Bush-era income tax reductions on households with income exceeding $250,000 a year, would be a pronounced move to redistribute wealth by reimposing a larger share of the tax burden on corporations and the most affluent taxpayers. Administration officials said the president would propose to reduce the value of itemized tax deductions for everyone in the top income tax bracket of 35 percent and many of those in the 33 percent bracket - roughly speaking, starting at $250,000 in annual income for a married couple.
Under existing law, the tax benefit of itemizing deductions rises with a taxpayer's marginal tax bracket (the bracket that applies to the last dollar of income). For example, $10,000 in itemized deductions reduces tax liability by $3,500 for someone in the 35 percent bracket.
Obama would allow a saving of only $2,800 - as if the person were in the 28 percent bracket. The White House said that it was unfair for high-income people to get a bigger tax break than middle-income people for claiming the same deductions or making the same charitable contributions.
The officials said the resulting increase in revenues, estimated at $318 billion over 10 years, would account for about half of a $634 billion "reserve fund" that Obama would set aside in his budget to address changes in the health care system. The other half would come from proposed cost savings in Medicare, Medicaid and other health programs.
In a document summarizing its proposals, the White House said it would finance coverage for the uninsured in part by "rebalancing the tax code so that the wealthiest pay more."
Obama's budget blueprint, which will project spending and revenues for the next decade, will flesh out the president's thinking on his energy plans to both cap the emissions of gases, particularly carbon, that are blamed for climate change and to promote development of nonpolluting energy alternatives.
The budget will show the government beginning by 2012 to collect billions of dollars in revenues from selling permits to businesses that emit the polluting gases, assuming the president's energy initiative becomes law as soon as this year, officials say.
Because utilities and other businesses presumably will pass on their costs to customers, Obama will propose to use most of the government's revenues from the permits to finance an extension of the new "Making Work Pay" tax credit beyond the two years covered in his just-enacted $787 billion economic recovery plan.
That tax relief, the administration will argue, will offset households' higher costs for utilities and other products and services from businesses passing on their permit expenses.
That tax credit annually would provide $400 to low-wage and middle-income workers or $800 to couples; Obama would like to increase those figures to $500 and $1,000. The credit phases out for those with incomes above $75,000 a year and for couples with incomes of more than $150,000; no benefit would go to individuals with more than $100,000 income and couples with $200,000.
The tax credit will begin showing up in the form of lower withholding for eligible workers beginning April 1.
The remainder of the projected revenues from the permits will finance Obama's campaign promise for $15 billion a year over 10 years to subsidize research and development of alternative energy sources, officials said. The stimulus package included a multibillion-dollar down payment to develop a national electricity grid to harness and distribute energy from such sources, including wind farms.
Behind the numbers in Obama's first budget is one of the most far-reaching domestic agendas in years, and at a time when the president and Congress already are grappling with an economic crisis worse than any in decades. The environmental permits would not take effect until 2012, at which point the administration expects the economy to have recovered. Similarly, some of the tax increases would not take effect until 2011.
Democratic congressional leaders promised to push the agenda, which parallels their own. "By the end of this year, I want to do something significant dealing with health care," said the Senate majority leader, Harry Reid of Nevada.
But the tax proposals could galvanize Republican opposition and give conservatives a concrete target for taking on Obama, who despite his political strength could find some members of his own party reluctant to embrace tax increases.
Senator Max Baucus, Democrat of Montana and chairman of the Senate Finance Committee, who has been drafting a health plan, predicted in an interview that the Senate could pass legislation by its August recess.
Baucus acknowledged that "there has to be revenue" to offset the costs of expanded coverage initially but did not endorse the president's proposal for limiting wealthy taxpayers' deductions.
"There will be lots of options to pay it, not necessarily that one," Baucus said. He would not say what revenue options he would support. But he said that tax increases of some kind would not prevent some Senate Republicans from aligning with Democrats to pass a health plan.
John M. Broder, Carl Hulse and Thom Shanker contributed reporting.
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