We have known since the early days of the campaign that President Barack Obama hoped to roll back the 2001 Bush tax cuts on upper income earners to finance his expansive domestic policy agenda. It was just a matter of when. And with the economy in free-fall and companies shedding more jobs by the minute, the prospect of an income tax hike on those individuals and corporations who already pay the most in taxes is troubling enough.
But yesterday we learned that Obama won’t just raise the income tax on those who earn more than $250,000 a year.
He also wants to reduce the value of tax deductions for mortgage interest and charitable contributions for people in higher tax brackets - making it less appealing for wealthy people to donate to charity. Sure, that ought to help all those struggling nonprofits.
And a hit on mortgage deductions is bound to do wonders for the housing market, isn’t it?
Meanwhile the administration also wants to require wealthier Medicare beneficiaries to pay a higher premium for the Medicare prescription drug plan, as part of its plan to reform health care.
And corporations will take a hit, too, with the administration venturing down that well-worn path to raising revenue by closing tax “loopholes.” There will be a slew of new taxes on oil and gas interests, including a new excise tax for offshore drilling, among other levies.
Yes, the president plans to follow through on his promise to extend tax cuts for middle-class Americans and the working poor in part by imposing new permitting fees on companies that emit greenhouse gases. Those companies wouldn’t dream of passing on those costs to energy consumers, would they?
All told the tax increases amount to about $1 trillion in Obama’s budget plan and will be used to help finance new spending on health care, education and energy.
Heck, even The New York Times [NYT] described it on the front page yesterday as a “pronounced move to redistribute wealth.”
Turns out Joe the Plumber wasn’t all that far off.