Obama Does the Math on Deficit Reduction

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Obama Does the Math on Deficit Reduction

AP / Evan Vucci

“I will not support any plan that puts all the burden for closing our deficit on ordinary Americans,” the president said.

President Obama rolled out a plan on Monday to reduce the federal deficit by $3 trillion over the next decade by combining cuts to benefit rights and war savings with tax increases. He vowed to veto any bill that relies solely on spending reductions to address the deficit.

Tax increases for wealthy Americans and corporations make up $1.5 trillion of the package, part of which will come from an expiration of the Bush-era tax cuts. Reductions in health and benefit rights programs amount to $580 billion, with $248 billion coming from Medicare and $72 billion from Medicaid. The Obama administration said the change to Medicare would not result in any increase in the program’s eligibility age.

It is virtually impossible to imagine Republicans agreeing to increase taxes on the rich. Anti-tax conservatives are already attacking the plan as socially divisive. The president anticipated as much: “This is not class warfare,” he said. “It’s math.” —ARK

The New York Times:

Mr. Obama is seeking $1.5 trillion in tax increases, primarily on the wealthy and corporations, through a combination of letting Bush-era income tax cuts expire on wealthier taxpayers, limiting the value of deductions taken by high earners and closing corporate loopholes. The proposal also includes $580 billion in adjustments to health and entitlement programs, including $248 billion to Medicare and $72 billion to Medicaid. In a briefing previewing the plan, administration officials said on Sunday that the Medicare savings would not come from an increase in the Medicare eligibility age.

... $800 billion of the $1.5 trillion in tax increases would come from allowing the Bush-era tax cuts to expire as scheduled for wealthier taxpayers, while extending them for individuals making less than $200,000 a year and families making less than $250,000.

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By Lafayette, September 20, 2011 at 9:17 am Link to this comment

RENDER UNTO CAESAR THAT WHICH IS CAESAR’S

NYT: Mr. Obama is seeking $1.5 trillion in tax increases, primarily on the wealthy and corporations

Well, that makes sense. Guess where the money is?

And why is it there? Because corporate taxes are the lowest of most developed econoies. (24th out of 31, See here.)

Ditto individual tawation. See the link above, click on the ranking icon within the column-header “Individual” - see which pops up amongst the lowest countries taxed.

Americans think that taxation rates should be low because, supposedly, individual initiative should not be bridled or constrained.

No kidding? There is NO empirical evidence on earth that low individual taxation correllates with high average personal income throughout a nation.

So, that excuse is exactly what it seems to be ... mindless nonsense to serve a very selfish purpose.

In a country with the worst Income Unfairness on earth of any developed country there is no doubt, to the intelligent eye, that taxes on the rich do indeed need to be raised. Back to pre-Reagan days when they were above 70% - or, better yet, to 90% as they were during the 50s and sixties. (See here.)

Frankly, that threat is the reason why the Rabid Right is in such an exited dither. They know full well that that their gorging at the income-trough was selfishly exaggerated since Reagan brought the tax rates town, effectively, to only 22/25% (after deductions).

Why else would the Koch Bros. want to finance the Crazies into office? Why else would the Crazies stonewall any proposition by Obama to stimulus spending financed by an increase in taxes?

MY POINT

When it comes to measuring the harm that has been done to this nation (by lowering tax rates) at the moment when we chose our national and congressional leadership in the November 2012 elections, shall we forget that which is written above?

Let’s hope not ...

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By SteveL, September 19, 2011 at 8:11 pm Link to this comment

INHERTANCE, capital gains, and dividends need to be taxed at the same rate as income. The money from these spend the same and need to be taxed the same. Taxing job creators? Who still believes that? The dead don’t write checks. The so called “death tax” is just another creation of the right wing think tanks.

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By Robespierre115, September 19, 2011 at 6:33 pm Link to this comment

Hike taxes somewhat for the rich, which they will happily accept since he’s outsourcing most of his “jobs program” to them, meanwhile the rest of us deal with cuts to medical programs. Sad part is Obamatrons will delude themselves into sleeping better now while my local public library can’t afford to update its shelves.

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By CenterOfMass, September 19, 2011 at 11:42 am Link to this comment

Simple outcome: Obama will not follow through. Not because he will be “blocked by Republicans” or “blocked by Democrats”, but because he is a corporatist. Same as he ever was. This was proven as soon as he appointed Geithner and Summers. Remember? Early in his term? No visible baggage? Hope and change? And he appointed Geithner and Summers.

Right there, is the measure of Obama.

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