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February 1, 2010 in Nation/World
Obama budget would impose host of tax increases
President Barack Obama delivers a statement on his budget that he sent to Congress on Feb. 1, 2010, in the Grand Foyer of the White House. From left are Council of Economic Council Chair Christina Romer, Treasury Secretary Timothy Geithner and the president.
(Full-size photo)
WASHINGTON — While President Barack Obama is proposing to cut some taxes for companies that hire workers, his budget would raise a host of other taxes on businesses and wealthy individuals.
Obama’s budget would extend his signature Making Work Pay tax credit — $400 for individuals, $800 for a couple filing jointly — through 2011. The administration released the budget Monday.
But it would also impose nearly $1 trillion in higher taxes on couples making more than $250,000 and individuals making more than $200,000 by not renewing Bush-era tax cuts for them. Obama would extend tax cuts enacted under former President George W. Bush for families and individuals making less.
Obama revived numerous proposals for business tax increases that didn’t fare well in Congress last year, including a scaled-down plan to increase taxes on U.S. companies with major overseas operations, and plans to increase taxes on oil and gas companies.
His budget features $38 billion in tax cuts that he wants Congress to include in a new jobs bill. It would give companies a $5,000 tax credit for each new worker they hire in 2010. Businesses that increase wages or hours for their current workers in 2010 would be reimbursed for the extra Social Security payroll taxes they would pay.
The tax increases on wealthy families would fulfill a campaign pledge by Obama, who has blamed Bush’s tax cuts and Medicare prescription drug program for swelling the government’s debt by $7.5 trillion.
The Making Work Pay tax credit provides families with up to $800 a year and individuals up to $400 a year through small increases in their weekly pay. Extending the tax credit through 2011 would save them $31 billion.
Some of Obama’s other tax proposals would:
• Raise the top two income tax rates for individuals, from 33 percent and 35 percent, to 36 percent and 39.6 percent, respectively. Unless Congress intervenes, those rates will rise next Jan. 1 when Bush’s tax cuts expire. That government would reap $365 billion over the next decade.
• Limit the itemized tax deductions high earners can claim for charitable donations, mortgage interest and state and local taxes, raising about $210 billion for the next decade.
• Increase the top capital gains tax rate from 15 percent to 20 percent for families making more than $250,000 a year and individuals making more than $200,000. The proposal would raise about $105 billion.
• Make the research and experimentation tax credit permanent, saving businesses about $83 billion over the next decade.
• Extend a provision allowing businesses buying equipment such as computers to speed up depreciation through 2010, saving them $20 billion over the next decade.
• Impose a “financial crisis responsibility fee” on large financial institutions, raising $90 billion over the next decade.
• Repeal a widely ignored law that taxes the personal use of company-issued cell phones like other fringe benefits, saving taxpayers $2.8 billion over 10 years.
• Restrict the ability of international companies to defer taxes on profits made overseas, raising about $26 billion over the next decade.
• Impose a total of about $39 billion in tax increases on oil, gas and coal companies over the next decade.
• Change the way profits made by investment fund managers are taxed, raising an additional $24 billion over the next decade.
© Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Megan_B on February 01 at 11:24 a.m.
“…not renewing Bush-era tax cuts for them. Obama would extend tax cuts enacted under former President George W. Bush for families and individuals making less.”
(increase fairness on who gets the majority of the tax burden)
“…increase taxes on U.S. companies with major overseas operations”
(save jobs here in the U.S.)
Perhaps a less right-wing, biased title would be more appropriate for adequate, fair, journalism.
spokanecommunistparty on February 01 at 11:28 a.m.
Obama just owned Rich people! Ba-hahahaha!
Jimmy on February 01 at 11:38 a.m.
How is the title right-wing? Because it’s true? Obama is increasing taxes…there’s no other way to put it. Let’s increase taxes on businesses and watch those increases get passed down the line to consumers. Let’s increase taxes on people who have worked hard to get where they are (200-250k or more) and promote mediocrity and a desire to aim for the middle. Let’s increase taxes on oil, gas, coal (aka how we get our energy and fuel our cars) and watch those increases get passed onto the consumer.
Yippee! Let’s drag out this recession.
johnclarke on February 01 at 12:28 p.m.
When the median income in this country is less than 50k, these changes all look fine to me. I’d recommend actually reading the proposed budget, you are most likely getting a tax break. Oh never mind, all those tax cuts for the 1.5% of the population worked out so well for everyone. Jimmy, I guess you are pulling in over 250k a year, not one of us poor mediocre slobs making a paltry 90k a year. By the way, the median HOUSEHOLD income in Spokane is $39k. Yes, more tax cuts for the wealthy because they will share all that with us little people.
Jimmy on February 01 at 12:56 p.m.
Actually I’m pulling in a whopping 35k and I have two kids. I just don’t see the ethics in taxing people who make X amount of money more than I do, simply because they are successful in what they do. What kind of message does that send our kids? That if you aim high the government will take more from you.
Again, when you tax things like business and energy who ultimately pays the price for that? I do.
Ol_Blue on February 01 at 1:32 p.m.
I don’t recall getting any breaks from big business when Bush put in the tax breaks. Trickle down is nonsense, any and all profits go into the companies and share holders pockets, if they need to increase infrastructure or deal with increases in their operating costs they raise the price of goods, services, utility rates, etc onto our back. Tax them, we’re screwed either way.
johnnygriffith on February 01 at 1:40 p.m.
Oh Spokesman-Review, your right wingnutiness never fails!
Headline: Obama budget would impose host of tax increases
First paragraph: While President Barack Obama is proposing to cut some taxes for companies that hire workers, his budget would raise a host of other taxes on businesses and wealthy individuals.
You may want to bury a first paragraph which points out your bias in the headline.
How about we go back to everybody’s favorite president - Ronald Reagan’s tax plan. What’s that? Oh it would really raise taxes on the rich. Oh never mind then.
johnclarke on February 01 at 2:09 p.m.
Jimmy I guess I don’t follow your reasoning. If you are making 35k and raising kids, this budget is designed to help you. Also “imposing taxes” and simply not renewing the Bush tax relief for the wealthy is not the same thing. He is simply not continuing a flawed program. You are correct, if you make more - you pay more in taxes. My plan is to make more - and I’ll pay the taxes. I may not like it, but I’m not going to make LESS just to pay less in taxes ! Anyway, I respect you for raising your two kids on 35k. BTW, the gas companies can afford to cough up some dough. They have been recording record profits for years.
Renata29 on February 01 at 4:19 p.m.
I find it unlikely anyone would choose not to make $250,000 a year in order to avoid paying high-income-earner taxes. Doesn’t it seem a little over the top to claim that taxes “promote mediocrity”? People aim high and work hard out of personal pride and healthy ambition, not solely to be the richest kid on the block.
Also, it’s good to remember that people who make that much are the only ones successful at what they do. They just get the most money.
lewis8457 on February 02 at 12:04 a.m.
It would be fairer if we just all paid the same percentage of tax across the board if you make more you pay more and vise versa. I made 14 grand last year, but I do know people that make money and they tell me if they have to pay more tax then who will be giving to the charities and non-profits?
If they do have to pay more then is it possible we I will become a nation of under achievers, meaning earn less pay less in tax. The government is just trying to find ways to keep its money spending machine alive, but if they fine business’s and industry isn’t that just going to make unemployment more of issue?
I saw in the latest copy of the health reform bill that employers would have to give part time employees health insurance, say good by to small business when that comes down the pike.
Look at what our own local government does, we are in a budget crisis, but we still have money for racetracks, new jails, etc. They don’t get it, and won’t until the wheels fall off.
Megan_B on February 03 at 1:51 p.m.
The giant elephant no one is bringing up is that there is a trickle down. The problem is, the trickle down doesn’t go to us—it goes to foreign workers and suppliers. That is why the other components of the Obama budget make so much sense, taxing corporations that hire foreign workers to keep our jobs (and trickle down) here.
I’m so thankful that SOMEBODY gets it, and luckily for us, he’s our president. Now let’s just hope that Congress does their homework and votes on what’s best for the people rather than for their next election…
eagleproducer on February 04 at 12:04 p.m.
jimmy: Increasing taxes on top earners does not have the effect of removing incentive. That is a lie that has been disproven, time and again. Increasing taxes on top earners is a way of saying they owe more to the culture that enabled their success than those left behind by free market ideology.