Obama proposes $1.5 trillion in new taxes- Deficit reduction plan targets rich
CBC News
Posted: Sep 19, 2011 11:13 AM ET
Last Updated: Sep 19, 2011 2:32 PM ET
Source - CBC News
Key features:
* $1.5 trillion in new revenue, which would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.
* $580 billion in cuts in mandatory benefit programs, including $248 billion in Medicare and $72 billion in Medicaid and other health programs. Administration officials said 90 per cent of the $248 billion in 10-year Medicare cuts would be squeezed from service providers.
* $430 billion in savings from lower interest payment on the national debt.
* $1 trillion in savings from drawing down military forces from Iraq and Afghanistan.
U.S. President Barack Obama Monday presented a deficit-cutting plan that is aimed predominantly at increasing taxes on the wealthy and on large corporations. (Chip Somodevilla/Getty )
U.S. President Barack Obama Monday proposed $1.5 trillion in new taxes â aimed predominantly at the rich â as part of his proposal for cutting the American public deficit by more than $3 trillion US.
Everybody from America's wealthiest to its largest corporations, "should pay their fair share," Obama said.
Obama's tax plan for slowing the rise of the debt is sure to conflict with congressional Republicans who oppose tax increases.
Just days ago, Republican House Speaker John Boehner ruled out tax increases to lower deficits.
But Obama, speaking at the White House Rose Garden, said spending cuts aren't enough.
"We can't just cut our way out of this hole," he said, a reference to the U.S. debt of more than $14 trillion.
It also came as members of Obama's own Democratic Party pressed him to take a tougher stance against Republicans.
The plan stands little chance of passing Congress, but its populist pitch is one that the White House believes the public can support.
Republicans have accused Obama of resorting to "class warfare," but the president said it's only fair to have "a hedge fund manager âĶ pay the same tax rate as a plumber or teacher."
Republican reaction was swift.
"Veto threats, a massive tax hike, phantom savings, and punting on entitlement (social program) reform is not a recipe for economic or job growth â or even meaningful deficit reduction," Senate Republican leader Mitch McConnell said in a statement issued minutes after the president's announcement.
"The good news is that the joint committee is taking this issue far more seriously than the White House."
Called 'Buffett Rule'
The tax increase is called the "Buffett Rule," for billionaire investor Warren Buffett, who has complained that he and other wealthy people have been "coddled long enough" and shouldn't be paying a smaller share of their income in federal taxes than middle-class taxpayers.
It focuses on preventing millionaires from using tax-avoidance schemes to pay lower rates than middle-income taxpayers.
It totals just more than $2 trillion in deficit reduction over 10 years through a combination of new taxes with $580 billion in cuts to mandatory benefit programs, including $248 billion from Medicare.
The administration also counts savings of $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.
On Sept. 8 Obama unveiled a $447-billion plan in tax cuts and new public works spending proposed as a short-term measure to stimulate a foundering U.S. economy.
He's submitting his deficit fighting plan as a way to pay for the jobs bill while still reducing the American public debt. It will be submitted to a special joint committee of Congress that is charged with recommending deficit reductions of up to $1.5 trillion over 10 years.
In a defiant note, administration officials made clear Sunday that Obama would veto any Medicare benefit cuts that aren't paired with tax increases on upper-income people, those making over $250,000 US a year.
Obama's plan came in sharp contrast with the negotiations he had with Boehner in July as the White House sought a deal with Congress tolift the federal debt ceiling and to avoid a government default.
As a result, it included no changes in Social Security and no increase in the Medicare eligibility age, which the president had been willing to accept this summer.
With files from The Associated Press
CBC News
Posted: Sep 19, 2011 11:13 AM ET
Last Updated: Sep 19, 2011 2:32 PM ET
Source - CBC News
Key features:
* $1.5 trillion in new revenue, which would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.
* $580 billion in cuts in mandatory benefit programs, including $248 billion in Medicare and $72 billion in Medicaid and other health programs. Administration officials said 90 per cent of the $248 billion in 10-year Medicare cuts would be squeezed from service providers.
* $430 billion in savings from lower interest payment on the national debt.
* $1 trillion in savings from drawing down military forces from Iraq and Afghanistan.
U.S. President Barack Obama Monday presented a deficit-cutting plan that is aimed predominantly at increasing taxes on the wealthy and on large corporations. (Chip Somodevilla/Getty )U.S. President Barack Obama Monday proposed $1.5 trillion in new taxes â aimed predominantly at the rich â as part of his proposal for cutting the American public deficit by more than $3 trillion US.
Everybody from America's wealthiest to its largest corporations, "should pay their fair share," Obama said.
Obama's tax plan for slowing the rise of the debt is sure to conflict with congressional Republicans who oppose tax increases.
Just days ago, Republican House Speaker John Boehner ruled out tax increases to lower deficits.
But Obama, speaking at the White House Rose Garden, said spending cuts aren't enough.
"We can't just cut our way out of this hole," he said, a reference to the U.S. debt of more than $14 trillion.
It also came as members of Obama's own Democratic Party pressed him to take a tougher stance against Republicans.
The plan stands little chance of passing Congress, but its populist pitch is one that the White House believes the public can support.
Republicans have accused Obama of resorting to "class warfare," but the president said it's only fair to have "a hedge fund manager âĶ pay the same tax rate as a plumber or teacher."
Republican reaction was swift.
"Veto threats, a massive tax hike, phantom savings, and punting on entitlement (social program) reform is not a recipe for economic or job growth â or even meaningful deficit reduction," Senate Republican leader Mitch McConnell said in a statement issued minutes after the president's announcement.
"The good news is that the joint committee is taking this issue far more seriously than the White House."
Called 'Buffett Rule'
The tax increase is called the "Buffett Rule," for billionaire investor Warren Buffett, who has complained that he and other wealthy people have been "coddled long enough" and shouldn't be paying a smaller share of their income in federal taxes than middle-class taxpayers.
It focuses on preventing millionaires from using tax-avoidance schemes to pay lower rates than middle-income taxpayers.
It totals just more than $2 trillion in deficit reduction over 10 years through a combination of new taxes with $580 billion in cuts to mandatory benefit programs, including $248 billion from Medicare.
The administration also counts savings of $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.
On Sept. 8 Obama unveiled a $447-billion plan in tax cuts and new public works spending proposed as a short-term measure to stimulate a foundering U.S. economy.
He's submitting his deficit fighting plan as a way to pay for the jobs bill while still reducing the American public debt. It will be submitted to a special joint committee of Congress that is charged with recommending deficit reductions of up to $1.5 trillion over 10 years.
In a defiant note, administration officials made clear Sunday that Obama would veto any Medicare benefit cuts that aren't paired with tax increases on upper-income people, those making over $250,000 US a year.
Obama's plan came in sharp contrast with the negotiations he had with Boehner in July as the White House sought a deal with Congress tolift the federal debt ceiling and to avoid a government default.
As a result, it included no changes in Social Security and no increase in the Medicare eligibility age, which the president had been willing to accept this summer.
With files from The Associated Press