Obama to offer tax hikes in budget showdown
In this April 8, 2011 photo, President Obama poses for photographers in the Blue Room at the White House in Washington after he spoke regarding the budget and averted government shutdown after a deal was made between Republican and Democrat lawmakers. / AP
WASHINGTON -- Higher taxes have been missing from the fierce budget battle that nearly shut down the federal government. But President Obama is about to put them on the table — at least a modest version that he had pushed before and then rested on the shelf.
Most economists and budget analysts say a comprehensive mix of spending cuts and tax increases is essential to any viable deficit-reduction plan. Yet few players in the negotiations have gone there.
It comes in the scramble to heed what is widely viewed as a loud clamor from voters to slam the brakes on runway government spending. There has been no corresponding public demand for raising taxes. That's not surprising, but the top-bracket U.S. tax rate now is the lowest it's been in decades, and it's far lower than those in many other industrialized countries, especially in Western Europe.
Tax elements of Obama's broad deficit-reduction plan, to be laid out in a speech Wednesday, seem likely to revive his earlier proposals.
Budget cuts target Democratic priorities
Video: Programs affected by the budget deal
Highlights of spending cuts in the budget deal
The president is expected to bring back his recommendation, first made in the 2008 campaign, to end Bush-era tax cuts for households earning over $250,000 a year. He temporarily set it aside when he signed onto a late 2010 agreement with Republicans to extend all Bush tax cuts for two years.
However, he did renew the bid earlier this year in his budget for the 2012 fiscal year that begins Oct. 1.
Any comprehensive deficit-reduction plan must include a mix of spending cuts and tax increases, experts argue from both sides of the political spectrum.
"There's no alternative, and I don't know of anybody who has seriously looked at this problem who thinks there is," said William A. Galston, a White House domestic policy adviser during the Clinton administration. "You're going to need to put together tough packages of programmatic cuts and revenue increases."
Video: Ex-Reagan budget boss says raise taxes for all
With a presidential election just around the corner, and voters demanding cuts in government spending, few politicians seem eager to climb out on a higher-taxes limb.
Even Obama's bid to end Bush-era tax cuts for the wealthiest Americans — bitterly fought by Republicans — would just take tax rates on them back to where they were in the 1990s, a decade of strong economic growth.
A sweeping Republican proposal laid down by House Budget Committee Chairman Paul Ryan of Wisconsin proposes trimming more than $5 trillion from deficits over the next decade, but it does so almost exclusively on the spending side of the ledger, including a drastic reshaping of Medicare and other federal safety-net entitlement programs.
The Ryan plan doesn't only fail to propose major new tax increases, it advocates lowering the top tax rates for both corporations and individuals to 25 percent from the current 35 percent.
This comes amid disclosures of low tax payments by some of the nation's biggest companies, including General Electric Co., which made $14.2 billion in worldwide profits last year, but paid no U.S. corporate taxes in 2010.
"We strongly disagree with the lack of balance in Congressman Ryan's approach," White House spokesman Jay Carney said Monday. "We understand that people will come to the table with different views, but the president believes that we have to have balance."
Heavy pressure from the tea party wing of the Republican Party, with its insistence on smaller government and strong opposition to new taxes, has complicated efforts by Republican leaders, especially House Speaker John Boehner of Ohio, to find common ground with the White House.
Democrats aren't exactly crying out for raising taxes now either. Not with approaching national elections and a restive electorate unhappy with levels of federal spending.
Obama's proposal to let the Bush tax cuts expire for families making over $250,000 or individuals earning above $200,000 will be woven into the upcoming presidential election. In emphasizing it now, rather than later, Obama all but assured that outcome.
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Cut funds for education, loans and grants to college students from low-income families, and safety-net services to infants, toddlers, the poor, and seniors. Force private and public sector unions to accept cuts in pay, benefits, or both, and/or set up a two tier system so that new employees won't receive the wages and benefits of existing workers.
Drain taxpayer funds off to charter schools. Outsource, generally under no-bid contracts, services which traditionally had been provided by public workers.
Seems as if Adam Smith was very patriotic, and on the other hand, the current crop of GOP morons, while wrapping themselves in OUR flag, and calling themselves teabaggin' patriots, are far from being patriotic, and only have a need to see that the wealthy and corporate elite continue to dodge taxes and not pay their fair share!
LOL!
Would that be the Hammer and Sickle Flag?
Leave it to the bully firm father figure Republi CONS and conservative wackos to blame it on the poor and workers. What an embarrassment to America and common sense are these radical right wing wackos.
Why should I pay for the rich to have everything. They can pay their fair share and then they won't have the money to buy and corrupt our government like they have done.
In his work Wealth of Nations, Smith advocated taxation. Smith argued that the rich should be proud to pay taxes because it was a symbol of their freedom. He argued that since society enabled to it citizens to prosper, its citizens owed something in return - in the form of taxes. Smith also argued that the people who prospered the most should be glad to pay a larger share of taxation.
Smith also did not like poverty - since poor people cannot participate in the economy. Therefore, he would advocate measures to reduce and eliminate poverty.
The GOP loves to claim they are capitalists - but they aren't. They really want socialism, subsidies and bailouts for the rich. If you don't believe me - count the number of GOP Congressmen who have forfeited their government-paid medical care.
Adam Smith understood that in order to remain a prosperous society, everyone in society must share in that prosperity. That's a far cry from what the GOP believes.
Paul Ryan is a puppet of Koch Industries, the insurance companies, and the banksters. Look at Center for Responsive Politics to bear that out. Now Paul Ryan wants to kill millions of Americans by eliminating their Medicare and Medicaid. Let's remember that in many states, WalMart employees are the biggest recipients of medicaid and food stamps because WalMart will not pay them a decent liveable wage.
My only criticism of Obama's approach is that the tax cuts are too modest. We need to eliminate all the tax cuts the rich and corporations enjoyed since Reagan took office. We can use the money to rebuild our infrastructure which is falling to pieces and to fight global warming. (Green tech is the new multi trillion dollar industry.)
as a rich democrat, I don't mind paying my fair share of taxes.
It's those loser teabaggers that refuse to work and sit on their faz a-zzes all day and are not paying any taxes but living on the public dole.
LOL!
So pay more, nobody is stopping you, Soros or Buffet from doing that.
As long as those tax hikes finally include those making over $250K a year and all the large corporate tax dodgers, I have no problem with it! Everyone needs to pay their fair share, not just the middle class.
LOL!
Why is IRS-Obama.gov reporting that 90% of all revenue is coming from everyone making over 250K including Corporations and the bottom 50% of wage earners contribute less than 2%?
You guys should do a better job of hiding that information.
President to give speech detailing deficit-reduction plan; Analysts convinced higher taxes needed
pahgre
Just go on record so the whole world can see you support Obama's effort to raise taxes.