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Obama redux: Once again, please let me raise taxes
WASHINGTON — If President Barack Obama’s proposal Monday to raise taxes on the wealthy sounded familiar, it should. He’s been proposing the same thing since he first took office.
Like those earlier tries, this one is dead on arrival in Congress. So why try again? To frame the coming 2012 election and to stir his disillusioned political base on the left, which he’ll need in his upcoming run for re-election.
Instant reviews suggested his call for $1.5 trillion in tax increases on wealthy Americans over 10 years — coupled with $580 billion in spending cuts that would not touch Social Security or raise the Medicare eligibility age as he once suggested, and an earlier call for a jobs bill — accomplished much of his political goal.
"By barnstorming the country in support of taxing the rich and government investment in jobs, the president has followed the longtime advice of progressives and has taken big steps in the right direction for our country,” said Adam Green, co-founder of the Progressive Change Campaign Committee.
Daniel Mintz, campaign director at the influential liberal group Moveon.org, said activists for months lobbied Obama to forcefully push for a government jobs program financed by tax increases on the wealthy.
“We're glad to see this message reach the White House,” Mintz said Monday. “Americans need jobs not cuts, paid for by making millionaires and corporations pay their fair share.”
Obama last week proposed a $447 billion, one-year package of tax cuts and government spending to create jobs. On Monday, he proposed a $3.2 trillion package of tax increases and spending cuts over the decade starting Jan. 1, 2013, to pay for the jobs bill and reduce soaring deficits.
“We know what’s right. It’s time to do what’s right,” Obama said in the White House Rose Garden.
“Washington has to live within its means,” he added.
Even with the taxes and spending cuts he proposed, deficits would continue and debt would continue to rise, growing by another $9.7 trillion over the coming decade, according to the Republican staff on the Senate Budget Committee.
If the tax cuts are doomed in Congress, one top Republican said the proposed spending cuts are illusory.
“Total federal spending will increase under the president’s plan, not decrease,” said Sen. Jeff Sessions of Alabama, the senior Republican on the Senate Budget Committee. “On balance, there is not a penny of net spending that is cut. This plan is gimmick piled upon gimmick, adding up to little more than a tax hike camouflaged as fiscal restraint.”
White House aides said Obama's plan would get the budget to the point — in 2017 — where it would stop adding to the debt, at least as measured as a share of a growing economy.
Among his proposed $1.5 trillion in tax increases:
— Letting the Bush tax cuts expire as scheduled on Dec. 31, 2012, for individual incomes above $200,000 and family incomes above $250,000. The total over 10 years: $866 billion;
— Limiting itemized deductions for the same incomes. Total over 10 years: $410 billion;
— Closing loopholes for oil and gas companies. Total: $40 billion;
— Raising taxes on investment fund managers. Total: $18 billion;
— Raising taxes on owners of corporate jets. Total: $3 billion.
Obama also will propose principles for tax reform, including one he called the “Buffett rule” after friend Warren Buffett, the billionaire investor.
Buffett has lamented that he pays lower overall taxes than his secretary because he makes most of his income off of the sale of stocks, and capital gains on stocks are taxed at a lower rate than even middle incomes.
With that in mind, Obama will urge that any tax reform make sure millionaires pay the same overall tax rate as the middle class.
He’s proposed the tax increases before, only to see Congress under both Democratic and Republican rule say no.
In December, he had a chance to let the Bush tax cuts end for wealthier Americans when they expired on Dec. 31. But Republicans refused to extend expiring middle-class tax cuts unless the higher incomes were covered as well, and Obama agreed to a two-year extension.
He’s also proposed limiting deductions for higher income families, and wanted higher taxes as part of a grand budget deal last summer with House Speaker John Boehner, R-Ohio. The Republican said no, and forced a $1 trillion deal with all spending cuts and no tax increases.
Obama struck a more combative tone Monday, saying he’d veto any new budget deal that cuts programs without raising taxes. “It will not happen on my watch,” he declared.
Yet Republicans called the proposed tax increases on the wealthy dead on arrival in Congress _ all but daring Obama to take the issue to the electorate next year.
”This administration’s insistence on raising taxes on job creators and its reluctance to take the steps necessary to strengthen our entitlement programs are the reasons the president and I were not able to reach an agreement previously,” Boehner said in a statement.
“And it is evident today that these barriers remain.”
Obama‘s call to cut projected spending included:
— $248 billion cut from Medicare, the health insurance program for the elderly;
— $72 billion from Medicaid and other government health programs.
— $250 billion from other programs, including $77 billion from streamlining the government and eliminating “waste and fraud.”
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