High Taxes Coming
From ABC News:
President Obama’s budget proposes $989 billion in new taxes over the course of the next 10 years, starting fiscal year 2011, most of which are tax increases on individuals.
1) On people making more than $250,000.
$338 billion – Bush tax cuts expire
$179 billlion – eliminate itemized deduction
$118 billion – capital gains tax hike
Total: $636 billion/10 years
$17 billion – Reinstate Superfund taxes
$24 billion – tax carried-interest as income
$5 billion – codify “economic substance doctrine”
$61 billion – repeal LIFO
$210 billion – international enforcement, reform deferral, other tax reform
$4 billion – information reporting for rental payments
$5.3 billion – excise tax on Gulf of Mexico oil and gas
$3.4 billion – repeal expensing of tangible drilling costs
$62 million – repeal deduction for tertiary injectants
$49 million – repeal passive loss exception for working interests in oil and natural gas properties
$13 billion – repeal manufacturing tax deduction for oil and natural gas companies
$1 billion – increase to 7 years geological and geophysical amortization period for independent producers
$882 million – eliminate advanced earned income tax credit
Total: $353 billion/10 years
So the idea is to stimulate the economy within a couple years…and then raise taxes? We’ll see how that works out. Bob Krumm offers this wry analysis:
If the government took 100% of earnings from those making more than a half-million dollars a year, it would add only $1.3 trilion to federal tax receipts. Even the most ardent demand-side economists who usually scoff at the Laffer Curve, will have to admit a 100% tax rate is going to yield significantly smaller receipts.
Barack Obama’s plans to hyper-inflate the government bubble while he taxes the rich at confiscatory levels, is so certain to collapse the economy that I can only conclude that he is a brilliant Rovian plant whose purpose is to finally drive a stake into the heart of the era of big government.
Links to more analysis can be found at the TaxProf blog.
The numbers don’t work, so he’s banking on a recovery of some sort, then an impassioned plea for four more years so he can continue the recovery and then in January 2013 here comes the 55% tax bracket on anyone making over $100k.
If he doesn’t get the economic recovery he needs to make his case, I think we can welcome in President Mitt Romney in 2013.
People earning over $250K per annum already will pay about $6 trillion over the next ten years, not adjusted for inflation, raises, etc. This tax increment is a 10% surcharge, but I’m sure it isn’t applied evenly.