Obama's plan to raise taxes on wealthy meets fierce opposition

Wednesday 04th March, 01:00 PM JST

WASHINGTON —

President Barack Obama’s call to raise taxes on high earners and greenhouse gas polluters met fierce opposition Tuesday from congressional Republicans and also a few Democrats. “I would never want to adversely affect anything that is charitable or good,” Rep Charles Rangel, D-NY, chairman of the tax-writing House Ways and Means Committee, said of Obama’s call to limit high-income taxpayers’ itemized deductions for charitable donations and mortgage interest.

Republicans said the president’s plan to charge fees to industries that spew greenhouse gases amounts to a stealthy tax increase for all Americans that will far exceed the new $400 annual tax cut for workers that he wants to extend beyond 2010.

“The president’s budget increases taxes on every American, and does so during a recession,” said Rep Dave Camp of Michigan, the top Republican on the Ways and Means Committee.

Treasury Secretary Timothy Geithner argued that the Obama proposal would reduce taxes for most Americans. Any increases, he said, wouldn’t occur until 2011, when the economy is “safely into recovery.”

Geithner said Obama’s plan would cut income taxes for 95% of families and 97% of small businesses. Raising taxes on couples that make more than $250,000 would make the tax system more equitable, restoring the balance that existed before a series of tax cuts were enacted under former President George W Bush, he said.

“This budget targets tax relief to families that have lost ground the past eight years,” Geithner said.

Geithner and White House Budget Director Peter Orszag testified at separate congressional hearings Tuesday, giving lawmakers their first opportunity to publicly question administration officials about Obama’s spending plan.

Questioning was pretty much along party lines. Democrats for the most part praised Obama’s proposal.

“It is making the tax code more fair,” Rep John Lewis, D-Ga, told Geithner.

But the Treasury secretary acknowledged that consumers could face higher electric bills because Obama would impose fees on greenhouse gas producers, including power plants that burn fossil fuels, by auctioning off carbon pollution permits. The goal is to reduce the emissions blamed for global warming while raising a projected $646 billion over 10 years.

“Now, if people don’t change how they use energy, then they will face higher costs for energy,” Geithner said.

Most of the $646 billion from the pollution fees would be used to pay for Obama’s tax credit, which provides up to $400 a year to individuals and $800 a year to couples. The plan also would raise money for clean-fuel technologies, such as solar and wind power.

Geithner also said the administration plans to unveil a series of proposals in the coming months to limit the ability of international companies to avoid U.S. taxes.

Obama plans to propose legislation to limit U.S. companies’ ability to shelter foreign earnings from taxation, Geithner said. The president also will move to limit wealthy Americans’ ability to use tax havens to avoid taxation, Geithner added.

Obama’s budget proposal last week included raising an additional $210 billion from “international enforcement” and “other tax reform policies” but provided few details. Geithner said those details will come in the next few months.

› Login to comment

Latest 15 of 94 Total Comments Show All

adaydream at 01:58 AM JST - 5th March

TexasAggie

These two have flaunted the laws for years and never had to pay a fine and now they are going to go after others. Democrats are such hypocrites.

You are correct that these two didn't pay their fair share till it was discovered.

How about all the Americans that send money out of country to avoid paying taxes on that money? How about the money earned from US businesses that were shipped overseas?

I pay taxes on ALL my money. Not just the money I want to disclose. There are a lot of people who don't pay their taxes on purpose, also. < :-)
HonestDictator at 09:53 AM JST - 5th March

250k is rich if thats what ONE person in a family is MAKING each year. How much of that are they spending on cost of living, how much on family expenses (I can understand if they have 8+ kids they're raising), how much on buying their home? (not their 2nd or 3rd or 4th home), how much on extravagance? (luxury is acceptable, but extravagance is pointless). I'm happy if I can at least make 35k a year after taxes and still be financially secure taking care of my family.
I remember there was some millionare that said that some people that make 6-7 figures can't quite understand that they can live quite well even if they aren't making 200k,500k,or Millions each year. Its a simple thing called budgeting your expenditures.
skipthesong at 12:11 PM JST - 5th March

I'm happy if I can at least make 35k a year after taxes and still be financially secure taking care of my family."

YOu are not happy. You are settling for less. If you are still in your early 20's, I can understand. But if you are not and you have a family and live in a big city, you are not happy nor are you financially secure, you just simply budget well.

If you live in Japan, as many on this board do and are American, you can not possibly live well and you need to make sure you US taxes are not affected in anyway and that means by letting a pro do your taxes. That ceiling of 80k is not as automatic as many believe.
watarigarasu at 05:08 AM JST - 6th March

Tax increases only serve to slow an economy even more, by taking more money out of the private sector and putting it into Big Government, which will use it to make itself even bigger and more stifling. It's a vicious cycle that must be stopped. Government should not be allowed any more money - in fact, they should have their revenue cut sharply, and with it there should be drastic cuts in the size of government itself. Get Big Government out of the way and let the people do what they are good at!
HonestDictator at 05:51 AM JST - 7th March

@Skip, its not about being happy, its about being able to meet your basic needs and still have enough to get by on when things don't always go the way one wants (hint:the present economy/unemployment rates). Considering the fact that even some banks are pretty much unreliable in the long run even holding on to ones hard earned money kinda makes things interesting that there is no sure fire way. People lose jobs, become disabled etc.

My way of thinking is this, If I can live comfortably (not luxuriously)off of a lower catagory of income then I should be able to live extremely well of a much higher income. 35k (if only 1 person is working)I know can cover a family of 3 and might actually be able to save about 5k out of that. With a spouse working you may be able to add an additional 12k(part time low-income job) to an extra 70k+.
HonestDictator at 05:52 AM JST - 7th March

remember the old saying, "Be happy with what you HAVE." cos' it may not be around forever.
HonestDictator at 06:03 AM JST - 7th March

Dang I seem to be pressing the submit button too fast. If I were making a nice sum of 60k by myself (excluding family members) I would be able to live comfortably off of about 20k of that(that would still include some medium quality wants) and the rest could be tossed into savings. When I was younger (I'm in my early 30s now) I used to be able to live off spending and still was able to save at between $500~$600usd a month.
While spending does help the economy move, its bad when people don't know when they have enough and end up having to spend more to maintain what they have (i.e. overpriced houses, multiple cars, 1000 cable/dish channels). Well, I'm ending it at that since my poor mind is a little tired right now.
earthcreature at 01:11 AM JST - 9th March

All I have to say is that most rich don't care a thing about the poor, why should I care about them? I say tax them all!! tax them until they are not as rich but not as poor as me :(
Sarge at 01:18 AM JST - 9th March

Most poor just want to get rich.
zurcronium at 10:59 PM JST - 9th March

bush handed out tax breaks to the rich like candy to a baby. Only the top 2% has done well in the last 10 years. The rest of Americans have been going down the tubes. Letting wealth concentrate is the top 2% is a recipe for failure of an economy. Look at the Philippines for example. A handful of families run the country, 40% are in dire poverty. That is the america that bush and the republicans want, that is not what Obama wants. He wants fairness, not welfare for the rich.
70x4060d at 05:43 AM JST - 10th March

I am wealthy there guy, and I don't think Obama has the right to take away my hard earned cash there guy. This is a redistribution of wealth there guy that can only happen under a socialist government there hey guy.
Molenir at 10:48 AM JST - 10th March

All I have to say is that most rich don't care a thing about the poor, why should I care about them? I say tax them all!! tax them until they are not as rich but not as poor as me :(

Most of the rich give to charity. Sure it may be as a result of the Tax writeoffs that Obama is taking away, but nevertheless the majority of charitable donations come from those who can afford to give, and do. Still think they care nothing about the poor?
ANOTSUSAGAMI at 06:59 PM JST - 10th March

To those who say this new tax system is detrimental to their cost of living: WHAT is going on in your life that you can't live on 4850 dollars a week? HOW could you possibly be broke? I lived pretty comfortably making less than 200 a week in Philly a year ago. I even had satellite cable. Basic cable, but still. I was able to budget and pay all my bills and taxes. I wasn't driving or anything, but how could someone making more than 24 times what I was making complain about cost of living?
WilliB at 09:56 PM JST - 10th March

Even if he confiscated all of wealth of the richest 1%, that would still not pay for the mountain of new government spending that he introduced.

Taxing-and-spending its way to wealth has never worked for any government in history.

Btw, isn´t one definition of insanity to repeat the same mistake over and over, expecting a different result?
nisegaijin at 11:29 AM JST - 11th March

The best stimulus for the economy would be abolition of income tax and IRS all together. America did not have those when it was a real land of opportunities. Now it's just a land of welfare. Go Ron Paul!!