How Will Wealthy Fare Under Obama Budget?

Mike O'Toole is what President Obama calls "wealthy." The long-time owner of a gondola business makes more than $250,000 a year. He will pay thousands more in taxes if the president's budget passes, CBS News correspondent Ben Tracy reports.

"I still got to do what I got to do. If I have got to fight a little harder somewhere, than I have got to fight a little harder somewhere," O'Toole said.

After an eight-year break under George W. Bush, high-income earners may now pay for it. The president's budget boosts tax rates for the wealthiest Americans from 35 percent to 39.6 percent.

And they face yet another tax increase, because they wouldn't be allowed to deduct as much of their home's mortgage interest.

Currently, for every $1,000 paid in mortgage interest, high-income taxpayers can deduct $350 off their taxes. Under Mr. Obama's budget, that would drop to a $280 deduction.

The president would also cut the deduction those in the top tax-brackets get for giving to charity.

If they donate $10,000, they can now deduct $3,500 off their taxes. Under Mr. Obama's plan, that would drop to $2,800. That's a $700 tax increase.

At the Midnight Mission shelter in Los Angeles, due to increased need, 15,000 more meals are being served every month. Donations were already down $200,000 last year. They're worried higher taxes will make things worse.

So with all the new money flowing into Washington, what does the president plan to spend it on?

A big chunk is designated for health care but other plans include $1 billion for FDA food-safety inspections and a nearly $4 billion boost for the EPA's clean-water program.

Mike O'Toole is hoping his tax increase will be offset by Mr. Obama's tax breaks for small business.

"Until I see this whole entire package, it is a lot of rhetoric, and he is darn good at that," O'Toole said.

Like many higher income earners, he will pay more if he has to, but he doesn't want to be taken for a ride.

[cg37102006]

How will the wealthy fare? Well, they were wealthy before Obama came in , they are wealthy now, and they will remain wealthy after Obama's gone. They will fare pretty well.

[harbinger19]

Oh and one other thing. She has great tax advisers. Late last year she sold her home in Malibu for $45 million. She made over $35 million on the sale. So let's see, at GWB's 15% capital gains tax vs. 28% under Bill Clinton and soon to be 28% under King Obama, Cher saved 13% on $35 million. So she saved around $4,500,000 in U.S. income taxes.

Oh yes those greedy republicans. Oops, Cher is no republican. Oh those greedy conservatives. Oops, Cher is no conservative. She may live like one, but her views are entirely liberal.

So how many of you liberals will even gross $4,500,000 in your life and Cher, well she saved it on one real estate sale, in a terrible real estate market no less.

She probably either sent the money to UBS in those special accounts or put it into muni bonds so she will not have to pay the higher taxes in the future. You see liberals, you are being played by these supposed friends of yours. They say what you want to hear, but they do the opposite. Wake up before your policies kill the U.S.
Posted by independenti at 4:55 AM : Feb 27, 2009


If she made 35 million on the sale, she would be subject to capital gains tax. IN addition, if this was not her primary residence, she is subject to tax on all the profit--if this was her primary residence, the only way to eliminate most of her capital gains would be to immediately roll it over into another home. There are plenty rich Democrats--the difference between them and rich Republicans is that rich Republicans think they should be able to keep all their money and help who they want--but if they suffer, they think the public should help them--and Democrats think that if they are rich, they should have to pay taxes and in addition, their monies also mean they have an OBLIGATION to help others.

It is all about perspective and self centeredness and social duty. One party has it (perhaps too much of it which leads to abuse) and the other prides itself on having as little as they can get away with--unless they can profit from it in some way. THAT is the main difference.

[harbinger19]

Why not get all the leeches off of welfare and make them get a life and a job. WHAT A CONCEPT!!! It won't happen though because the spineless Democrats don't want to anger their voting base. Do you realize how much money would be saved if we got rid of welfare all together and made them responsibile and accountable for their own actions. I realize that you cant use the words Democrat, responsibility, and accuntability together. We would save billions. It's not too early......we need to campaign to get rid of this communist dictator Obama after the first term before he totally destroys this country. I have a plan...if we can get the Democrats to think for themselves and not let the Democrat leaders think for them, they'll jump ship. It won't be easy though because that would require them to have smarts. One can always dream!!!!!
Posted by dongo3 at 3:20 AM : Feb 27, 2009


currently there are less than 2.9 million Americans nationwide on welfare. That would be less than 1% of our total. Find another scapegoat--this one is too old to work.

[harbinger19]

If they donate $10,000, they can now deduct $3,500 off their taxes. Under Mr. Obama's plan, that would drop to $2,800. That's a $700 tax increase.


This is misleading. Donations are voluntary--so instead of saying people who donate get a 700 dollar tax increase, they are getting a 700 dollar donation reduction. They could always not donate as much.

But I'm cool with this idea. mostly because with the economy contracting so much, we will no longer get year end bonuses. So our income will be just under 200K. LOL

I wonder why folks balk at these proposed tax rates. In the late 1940's and 1950's the tax rate was about 89% for the "wealthy", and the economy was pretty stable, with single-earner families buying homes, sending their kids to school, taking vacations, etc. Eisenhower really believed in a balanced budget, which required that he keep taxes on the upper incomes high: he also warned of the dangers inherent in a "military-industrial complex", both points in his favor, and remarkalbe for a Republican even then. It was his economic plan that created the interstate highway system, mostly because he was concerned about military mobility, but also because he could see the financial boon to the country in being able to move products from one place to another more easily. It was a government sponsored make-work program, and it worked.

[GODSnLIBERALS]

well what can i say..obama has a lot of constituents to feed

[mjvwsr]

According to psychologist David Myers, who wrote The Pursuit of Happiness, the answer is 'a little bit.' Considerable research shows that once we have escaped poverty and our basic needs are met, further income and possessions add remarkably little to our well being.

Posted by ShooShoeBush

I agree. I've made mine so now I'll close my business, put 25 people out of work, and just concentrate on being happy go lucky. Good luck

[winder50]

For all of you who are cheering about the increase of taxes on the rich, do you not realize that YOU are going to be next? If you really think that Obama is going to take care of you, and you will not "share the wealth" of the income tax increase, you have really been drinking the Kool Aid. With the (exponential) increase in deficits, do you really think the tax increase on the rich is going to be enough? How many of you are old enough to remember Bush the First, "Read My Lips... No new taxes". And that Clinton ran on lowering the taxes on the middle class, and the first thing he did in office was to raise taxes.

Come on, now, you have to have more sense than to really think that our taxes are not going to skyrocket., and he is really going to bring down the deficit. Use some common sense, people!

[payasyougo]

Obama.

Making the rich pay your fair share.

[wvu74621]

It seems the Obama kool-aid is wearing off. Not many lemmings in here beating the Slick Willie drum.