Obama Millionaire's Tax: President To Seek New Tax Rate For Wealthy

By JIM KUHNHENN, Associated Press

WASHINGTON -- President Barack Obama is expected to seek a new base tax rate for the wealthy to ensure that millionaires pay at least at the same percentage as middle income taxpayers.

A White House official said the proposal would be included in the president's proposal for long term deficit reduction that he will announce Monday. The official spoke anonymously because the plan has not been officially announced.

Obama is going to call it the "Buffett Rule" for Warren Buffett, the billionaire investor who has complained that rich people like him pay a smaller share of their income in federal taxes than middle-class taxpayers.

Buffett wrote in a New York Times op-ed piece last month that he and his rich friends "have been coddled long enough by a billionaire-friendly Congress."

The measure would be in addition to $447 billion in new tax revenue that Obama is seeking to pay for his short-term spending and tax cutting plan to jump start the economy.

House Speaker John Boehner said Thursday he would oppose tax increases to reduce the deficit. Boehner has urged Congress' deficit "supercommittee" to lay the groundwork for a broad overhaul of the U.S. tax code.

The panel has almost unlimited authority to recommend changes in federal spending and taxes and is working against a deadline of Nov. 23.

Boehner said the panel has "only one option, spending cuts and entitlement reforms," a reference to government benefit programs such as Social Security, Medicare and Medicaid.

Any broad compromise that clears the bipartisan committee is almost certain to require Democratic agreement to savings from programs such as Social Security and Medicare, along with Republican acquiescence to additional revenues, although any such trade-offs are rarely discussed openly until the last possible moment in negotiations.

Obama's new tax proposal was first reported by The New York Times.

Comments

[Zero Gear]

10:37 PM on 09/21/2011

When it comes to taxes, we're just awful apparently.

Businesses are sitting on a massive amount of money that would be better off being circulated into the economy. I feel that the middle class people do not have the resources or the amount of money to spend to spur the economy in a significant way.

The wealthy and large businesses should be taxed more, given how they're living so comfortably atop a mountain of cash reserves. Take APPL for instance, they're sitting on $76-Billion dollars in cash reserves, some of which would be better off distributed in the economy so it ends the stagnation period that we're in now. Really though, if it was that simple we would have done so a long time ago. The economy will be stagnant for a while but a tax increase on millionaires would be a step in the right direction.

[2012TP]

09:01 PM on 09/22/2011

"The CBO figures paint a more specific, and stark, contrast. In 2007 (the most recent year listed), the top 1 percent of earners paid 19 percent of their income in federal individual income taxes, and for people earning less, the rate went steadily down, to a rate of minus 6.8 percent for people in the lowest 20 percent of taxpayers."

Ok so even though the rich's rates have dropped so has everyone else's. So even when the top 1% pay 19% tax rate, it is in reality more like 25.8% compared to the lowest 20% of the country. So even though the numbers seem low they (the rich) are still paying more than any other class, and if we want to be truly honest, the rich should not be taxed more but the lowest 20% as they end up with a negative federal tax rate. Even the President’s report states that the rich still pay more than the other classes.

So either was raise everyone’s rate including the poor to make sure they are really paying something to the Federal Government, or we need to make real cuts (and not to just stuff like the military, but government run social programs) in Washington, which would you like?

[Christina-Xena]

03:58 PM on 09/21/2011

We're NOT in a RECESSION, the correct analysis is we're in a period of STAGNATION.

Ex-Preside­nt Clinton has been sharing how the critical housing market will take a few more years to shake out. Manafactur­ing capacity is still way under ultilized.. The financial and business investment markets are sluggish and fearful. Our international trade deficit now is a tad LESS worse but we're been running deep shortfalls for many years.

On top of that, business has been outsourcin­g jobs overseas by the tens of thousands. We're now having to deal with the long-term cumulative effects of many negative trends, and we no longer have the tax revenues, or the ability to absorb major budget deficits, which served to cover up the underlying problems. The economy is at a major TILTING point, and it could go easily stay stagnet for 3-5 more years, then barely improve..

Simply put, the poor and the middle class don't have the income to take and interject into the programs that can get this country growing again. But the wealthy and big business are sitting on the additional resources needed, and it's past time for them to give up their special tax breaks, selfish views, and fulfill the broader role they need to play at this time.... whether they think it's "fair" or not. They need to support the needed economic stimulas programs, including jobs.

In the end analysis....they will benefit the most as the economy improves.

[2012TP]

04:15 PM on 09/21/2011

Washington might say we are not in a recession, but here on Main Street the recession is not over. Go to the business owners that are either having to make major cuts or closing shop, ask the people that still loss money every day in the poor stock markets, as the people at the unemployment lines if we are still in a recession or not. Washington has proven, they know nothing about what is happening on or with Main Street. Sorry to bust their nice little “were not in a recession” bubble but Main Street knows better.

[Christina-Xena]

06:15 PM on 09/21/2011

In a street level conversation I wouldn't have a problem if someone called this a recession...as a generality. But we're talking specifics here, and a recession is a period in which the economy is recessing,i.e. opposite of growth. Both are "active" TRENDING terms.

But a better description in more intelligent forum would be to called our economy as being "stagnant at a depressed level." The economy is going neither way, and the recovery didn't get far enough along for the Main Streeter to get the sense we were out of a recession. But there's in reality a BIG difference between recession and stagnation, and the degree of impute to correct each condition is a bit different, including the scale of any response.

We will be stagnant for some time to come, unless we further stimulate the economy, and tweak the underlying causes by proper oversight, taxes, regulation (overhaul including penalities for off shore tax havens, and for moving corporate headquaters and jobs overseas) and investment partnerships in industries that can compete internationally.

Main Street may well know the results, but they are mostly clueless about the causes.

The question is do you want the Teapublican "do-nothing" approach, or the let's get something going of the Democratic approach?

[NikitaKruschev]

09:27 PM on 09/20/2011

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08:53 PM on 9/17/2011
What jobs have they created with all their tax cuts for the last 10 years. Please enlighten us.

================================
Same nonsense regurgitated here every day from ignorant tr0LLs.

We havent had a tax cut since 2003. Blaming the economy today for the tax cuts of 2003 is like blaming the Reagan tax cuts for the problems today.

You Liberals always ignore the new taxes and regulations added since those tax cuts. We had 4.4% unemployment rate before the Democrats took over Congress in 2007.

[Diskatopia]

10:04 PM on 09/20/2011

Lol...it is caused by those tax cuts because they are STILL IN EFFECT.

Try to keep up, here is a graph from rightwing site Heritage.org so you can see visually what you have missed :

http://www.heritage.org/budgetchartbook/growth-federal-spending-revenue

PS-- check out those Reagan deficits, really massive ones for the times-- thanks to tax cuts for the wealthy

[2012TP]

11:23 AM on 09/21/2011

Then explain how after the Democrats took over congress, everthing fell apart?

[ladywiccan]

04:50 PM on 09/20/2011

@powerlift220 Oh I didn't miread your comment, I irgnored it and my family knows all to well why the Mex's are rushing the border. have 4 Hispanic grandchildren, an African American believe me I know what's going on south of the border. granddaughter

[Insightful]

03:54 PM on 09/20/2011

Obama sounds good when he is on his soapbox but he has shown many times that he will suddenly run out of steam and cave in. Our tax base is absolutely disgraceful with its tax giveaways to the richest among us. We should go back to the tax rates that were in effect during Bill Clinton's presidency. We began going down the drain with the policies of George Bush the 2nd. He gave away our stability with his giveaways to the multi-millionaires plus his war policies. He killed our health plans by giving the Insurance and Pharma corporations the freedom to run up prescription drugs and premiums to over the top prices. We are still circling the drain with a weak president who is unable to bring about any corrective legislation.

[2012TP]

04:04 PM on 09/20/2011

Why not ask the people that in reality pay no taxes to start contributing for the good of the country, or is that your agenda for the next go around?

You redistribute the wealth. First take from the haves, then take from the have- less so all that will be left is the have-nots and then force the people to rely on the Government to take care of you from the cradle to the grave.

[Insightful]

04:20 PM on 09/20/2011

I was addressing the fact that the tax burden should be more fairly distributed based on income. That is NOT what we have currently. The "cradle to grave" concept never entered my mind. I was addressing some factual issues that are killing us. Your reply was not relevant to my post.

[Eris23Skidoo]

07:50 PM on 09/20/2011

The current situation is that the have-more's are taking from the have-not's and they ran out of money so now they're taking from the have's. To put that in the parlance of modern political science, the extreme wealthy have been looting the poor for about forty years. In the recent decade they began taking from the middle class as well. They've looted our 401K's and our mortgages and now they're gunning for Social Security and Medicare. They want those programs ended so they can have more tax cuts. There are more of us than there are of them.

[Eris23Skidoo]

07:48 PM on 09/20/2011

It isn't that the president is weak it is that he doesn't have enough support. Right now he's got a teabagger congress trying to voucherize Medicare and he is doing everything possible to prevent them from doing so. It's true that he reauthorized the Bush tax cuts but only with a gun pointed to his head and the knowledge that good democrats had just stayed home from the midterm elections. He is the president of the entire country, not just the left and so far as he could tell the people had just spoken.

[2012TP]

08:53 PM on 09/20/2011

So even you agree that Obama has been doing nothing but playing politics while we (the workers) suffer. And now he is doing it again. He had his chance to pass a bill like this and did not, ask yourself why?

[loufalce]

03:17 PM on 09/20/2011

Don`t look ow obama, but the leftist Hollywood elite have just turned on you. You truly don`t know s-it from shinola.

[TheCycad]

01:37 PM on 09/20/2011

It's a start, but we need to return to the 1960's tax rate.

[Midnight Cry]

01:16 PM on 09/20/2011

Why doesn't Buffett pay his taxes regularly? What a joke! No wonder Buffett is kissing up. Berkshire Hathaway, the eighth-largest public company in the world according to Forbes, openly admits to still owing taxes for years 2002 through 2004 and 2005 through 2009, according to the New York Post.

[loufalce]

03:19 PM on 09/20/2011

Did you forget about Timothy Geithner too?

[2012TP]

06:08 PM on 09/22/2011

Why can't anyone from the left side of the isle address the fact that these people "want to give" their fair share, but never have? Please tell us why they have never given their fair share?

[jabailo]

01:02 PM on 09/20/2011

Billionaire on Millionaire Violence

Now, why, you ask would a Billionaire want a "tax on the rich"? The reason is that the Billionaire wants a tax on the Millionaire. Because the Billionaire has assets that are often dependent on government subsidies and contracts to maintain. So, what the Billionaire wants is for there to be more money in the System...money he can grab and enhance his holdings with...especially now in a stagnant financial capital market. The only way the Billionaire can hold on is through taxing Millionaires to get their money. Enter the Democratic party which for all its ballyhooing, is really giving to the voters what amounts to a few Billionaires worth of income to something like 75 million people and calling it "job creation" or whatever.

http://yrihf.com/viewtopic.php?t=4264&sid=7c64a5082ef7a49220428e59e45eb048

[Eris23Skidoo]

07:54 PM on 09/20/2011

You just cited your own blog post as if that would back up your mad ravings. Do you always quote yourself when you try to lend legitimacy to your rants?

[2012TP]

11:49 AM on 09/20/2011

In 09 Obama said that you do not raise taxes in a recession, what does he think we are in, a economic boom?

http://www.weeklystandard.com/blogs/obama-vs-obama_576524.html

As Churchill once said “We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

Mr. President; are you going back on your word, how are you to be trusted? I understand we need a bunch of cents, but you sir need a lot on sense.

[peter777]

02:15 PM on 09/20/2011

That was when he was in the phase of preventing the Bush recession from sliding into a depression. Now, the situation is different. Most economists agree that preserving tax breaks for corporations and the rich is not the best way to grow the economy. He hasn't gone back on his word. He has returned to what he promised in his election campaign, and about 80% of the American people agree with him.

[2012TP]

03:09 PM on 09/20/2011

You think, we are not out of a recession. Go ask anyone at the UE line if the recession is over, they will tell you no. It might be over in Washington politics, but in the real world, aka main street, it is not over by a long shot.

[Bankerrkt]

03:33 PM on 09/20/2011

"That was when he was in the phase of preventing the Bush recession from sliding into a depression"

There's is not a single shred of evidence to support that claim. Just a Liberal talking point to rationalize Obama's failed Stimulus.­

[Tanya OaksBrooks]

02:35 PM on 09/20/2011

Psssst...the recession ended in June of 2009.

[Loxinabox]

02:37 PM on 09/20/2011

Is that what Obama told you?

[2012TP]

03:16 PM on 09/20/2011

Go down to UE lines and ask them.

[tomdavis]

08:51 AM on 09/20/2011

Informative article regarding Buffett's statements.

From cbsnews with real numbers: http://www.cbsnews.com/stories/2011/09/20/politics/main20108710.shtml

Rich taxed less than secretaries? Maybe not.

This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes and payroll taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay 15 percent of their income in federal taxes.

Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent.

[mustardhead98]

09:30 AM on 09/20/2011

Thanks for the ACTUAL percentages. This new "tax on the rich" is just another example of the Obama administration skewing facts to suit their needs and rile up their base.

[Loxinabox]

12:38 PM on 09/20/2011

This is all about jobs well just one job his.

[Eris23Skidoo]

08:10 PM on 09/20/2011

If they are raking in 80% of the wealth why are they only paying 50% of the taxes?

[ivotedabsentee]

02:50 PM on 09/20/2011

[Households making between $50,000 and $75,000 will pay 15 percent of their income in federal taxes.]

The makeup of the household and the exact income level, even within that range of $50,000 to $70,000 makes that 15% just a ballpark number.

Example - Single person earning $50,000, one exemption and standard deduction, per the 2010 Form 1040 numbers, would pay $5950 in Federal income tax, after taking into account the Making Work Pay tax credit. That person would also pay 7.62% for FICA and Medicare, $3810, so their total Federal tax hit would be $9750 or 19.52% effective tax rate.

Second example - Married couple with two children under 17, $50,000 income would have no no Federal income tax liabilty, for with four exemptions, standard deduction, child tax credit and Making Work pay credit, they'd actually get a Federal income tax liabilty of negative $34. Take the same FICA/Medicare of $3810, their net payment to the Federal government would be $3776, 7.55% of their income.

Exactly the same income, two different household situations and a nearly three to one percentage spread of Federal tax percentage.

[MUDPUPPY]

05:42 AM on 09/20/2011

Great idea. Obama needs more money to wisely spend like on another stimulus plan, cars for clunkers, shovel ready jobs, wind generators. His wise investment of our tax money on solar panels only cost us a little over a half billion bucks for nothing and only lost 1100 jobs. He spent around a trillion bucks to "create" jobs and lost over 2,000,000 more jobs. Don't give the government any more of our money in taxes till they quit wasting it.

[2012TP]

11:51 AM on 09/20/2011

Hey we need this extra money to invest in green technologies, you know since it worked so well the last time we gave a green company half a billion dollars..

[2012TP]

02:02 AM on 09/20/2011

"So while it is true that tax rates … are significantly lower than they were 30 years ago, the rich are paying a lot more of the overall tax burden," says Cato Institute economist Dan Mitchell. Federal figures show that the top 5 percent of taxpayers accounted for more than half of the income tax dollars paid”


But Geithner made a much broader assertion. He said the wealthiest 1 percent of taxpayers — about 1.4 million individuals or households — paid lower rates. And that isn't supported by the facts.


the 2010 Economic Report of the President. On page 154, a chart tracks the history of effective tax rates for people making more than $250,000 a year and the middle 20 percent of taxpayers who make considerably less. While the tax rate for the rich has clearly dropped, the chart shows, it remains visibly higher than the middle group.


The CBO figures paint a more specific, and stark, contrast. In 2007 (the most recent year listed), the top 1 percent of earners paid 19 percent of their income in federal individual income taxes, and for people earning less, the rate went steadily down, to a rate of minus 6.8 percent for people in the lowest 20 percent of taxpayers.


http://www.politifact.com/truth-o-meter/statements/2011/jul/12/timothy-geithner/geithner-says-top-1-percent-have-tax-rate-low-20s/

[2012TP]

02:19 AM on 09/20/2011

WOW, just wow; who would have thought?

[Eris23Skidoo]

08:12 PM on 09/20/2011

You just commented on your own article. Do you get paid extra for that?

[wayne the pain]

11:36 PM on 09/19/2011

Why didn't he propose a capital gains tax increase, that is where the rich make most of their money? It must have been an error of omission! It could not have been to keep his Wall Street friends happy!

[BMcCue7]

07:44 AM on 09/20/2011

Yeah, that must be it.

[Diskatopia]

10:20 PM on 09/20/2011

No need to increase cap gains rates, just treat capital gains above say $50k as regular income, subject to AMT, and raise the AMT to only hit above $250k. Then raise the top brackets first to Clinton era rates then to Kennedy era.

Problem solved-- this would incentivize DEDUCTIBLE business infrastructure investment and create jobs in droves, and lead to a new golden era in our economy.

[2012TP]

08:03 PM on 09/19/2011

“Carville said he believed the type of proposals that made it into the plan would help bolster Obama's reelection prospects.
"The most popular thing you can do to cut the deficit is to raise taxes on people making over a million dollars. That's not just a sop to the Democratic base, that is a sop to roughly 65 percent of the country," Carville said. "So, good. If this signals something new, then great."
http://www.huffingtonpost.com/2011/09/19/obama-debt-plan-super-committee_n_970681.html

No Obama would never increase the taxes just to booster his falling ratings and disenchanted voter base, never. If it looks like a ploy, smells like a ploy and moves like a ploy, it is probably a ploy. By God we can call this tax rate hike on the rich what it really is and that is a ploy.

[Loxinabox]

12:40 PM on 09/20/2011

It is very easy for him to fool his base kind of sad really

[Eris23Skidoo]

08:14 PM on 09/20/2011

I'd rather bank on it being real than reward the crew who voted to voucherize Medicare and give the savings to people who never contributed to the system. People who don't even pay payroll taxes would be getting all the tax cuts. Pure distribution from everybody else to the top .01%. Corruption at its most obvious.