Obama to propose new tax rate for millionaires

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Obama to propose new tax rate for millionaires

From Jessica Yellin, CNN Chief White House Correspondent
September 19, 2011 12:08 p.m. EDT

Washington (CNN) -- The White House will propose a new tax rate for people earning more than $1 million a year to ensure that they pay at least the same percentage of their earnings in taxes as middle-income Americans, administration and White House officials told CNN on Sunday.

Called the Buffett Rule, the proposal will be part of a comprehensive deficit reduction plan that President Barack Obama will unveil on Monday, according to a senior administration official and White House sources who spoke on condition of not being identified. The information was first reported by The New York Times.

The plan's name refers to billionaire Warren Buffett, who has complained that wealthy Americans pay less than their fair share in taxes under the current tax code.

In particular, Buffett says, wealthy taxpayers who generate significant investment income pay the lower capital gains rate on that money. Obama's proposal would be designed to prevent a resulting imbalance.

Obama will propose several tax changes, one White House official said, adding that the Buffett Rule would replace the current Alternative Minimum Tax that was created to ensure people paid a minimum percentage of their income in taxes.

According to the White House official, the Buffett Rule would impact only 0.3% of taxpayers -- fewer than 450,000 individuals. The president will not specify a specific rate or details of the Buffett Rule in announcing his proposal, leaving it to Congress to decide how to calculate such a rate as part of the larger debate over rewriting the tax code, the official said.

Obama's deficit reduction plan is expected to also propose changes to the Medicare and Medicaid government health care systems for senior citizens, the disabled and the poor.
John Boehner wants tax reform
Lower taxes for the rich: Is that fair?
GOP slams 'Buffett Rule' to cut debt

It will come out as a special congressional committee created under last month's debt ceiling agreement continues its early efforts to forge a deficit reduction plan that can pass Congress by December 23. If the committee's effort fails, more than $1 trillion in spending cuts will automatically kick in, on top of $900 billion in cuts already mandated under the debt ceiling deal.

The issue of tax increases has been at the heart of a divisive policy dispute between Democrats and Republicans. Obama wants to end Bush-era tax cuts on families earning more than $250,000 a year, but Republicans have blocked his efforts, arguing it will hinder investment.

House Speaker John Boehner, R-Ohio, last week reiterated his opposition to any tax increases being part of a deficit reduction package being negotiated by the special congressional panel.

On Sunday, House Budget Committee Chairman Paul Ryan, R-Wisconsin, told "Fox News Sunday" that Obama is essentially calling for raising the capital gains tax, which he said would harm growth.

"If we tax investment in job creation more, you will get less of it," Ryan said, calling the initial details of the Obama proposal "not a very good sign, because it looks like the president wants to move down the class-warfare path."

Another top Republican, Senate Minority Leader Mitch McConnell of Kentucky, also said raising taxes on the wealthy will hurt the economy, particularly small business owners who file individual tax returns instead of corporate tax returns.

"We're not opposed to more revenue," McConnell told NBC's "Meet the Press," adding that his party wants a growing economy to bring in more money, rather than higher taxes that he said would hinder growth.

Asked about Buffett's point that the wealthy pay too little in taxes, McConnell invited him to send in a check "if he feels guilty about it."

On the same program, former President Bill Clinton said tax reform is necessary, but that "the least harmful tax increases are the ones that Sen. McConnell and people who agree with him hate the most," in reference to ending the Bush-era tax cuts.

"Right now we don't need what the Republicans want, which is further spending cuts," Clinton said.

"Conflict seems to be better politics; cooperation is better economics," Clinton said of what he described as Republican obstruction of Obama policies, such as the $447-billion jobs plan introduced last week.

Ryan, however, argued on the Fox program that it is Obama and Democrats sowing conflict.

"Class warfare may make for good politics, but it makes for rotten economics," Ryan said.

http://www.cnn.com/2011/POLITICS/09/18/obama.buffett.tax/index.html


:action-sm
 

VMS

Victim of high standards and low personal skills.
Apr 26, 2006
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#2
Can someone tell me if capital gains tax is paid on realized profits (ie- only if you actually sell your stocks/bonds/whatever) or on the paper profit?

Either way, the President is treating the different rate for long term capital gains as a "gimme" to rich people. It isn't. The purpose isn't to give something to rich people: it's to encourage people to fucking invest their money. The more of their money that people invest, the better off the economy is.

Is the President more interested in playing class warfare than he is in actually helping the economy?
 

Owenay

Those who fail to learn from history are doomed...
May 10, 2007
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"It's not class warfare, it's math."

AP Fact Checks Obama: Are the Rich Really Taxed Less Than Secretaries?

Posted on September 20, 2011 at 7:16am by Billy Hallowell
Comments (114)

WASHINGTON (AP) — President Barack Obama makes it sound like there are millionaires all over America paying taxes at lower rates than their secretaries.

“Middle-class families shouldn’t pay higher taxes than millionaires and billionaires,” Obama said Monday. “That’s pretty straightforward. It’s hard to argue against that.”

The data tells a different story. On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. That, however, was less than 1 percent of the nearly 237,000 returns with incomes above $1 million.

In his White House address Monday, Obama called on Congress to increase taxes by $1.5 trillion as part of a 10-year deficit reduction package totaling more than $3 trillion. He proposed that Congress overhaul the tax code and impose what he called the “Buffett rule,” named for billionaire investor Warren Buffett.

The rule says, “People making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay.” (Blaze editorial note: MoveOn.org has created an ad surrounding the Warren Buffett and “fair share” mantra as well; watch it below.)

[video=youtube;RRl-AzugWSs]http://www.youtube.com/watch?v=RRl-AzugWSs[/video]

“Warren Buffett‘s secretary shouldn’t pay a higher tax rate than Warren Buffett. There is no justification for it,” Obama said. “It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million.”

Buffett wrote in a recent piece for The New York Times that the tax rate he paid last year was lower than that paid by any of the other 20 people in his office.

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.

The latest IRS data is a few years older – and it’s limited to federal income taxes – but it shows much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 percent of their income in federal income taxes, according to the IRS.

Those making $100,000 to $125,000 paid on average 9.9 percent in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3 percent.

Obama’s claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages. The top tax rate for dividends and capital gains is 15 percent. The top marginal tax rate for wages is 35 percent, though that is reserved for taxable income above $379,150.

With tax rates that high, why do so many people pay at lower rates? Because the tax code is riddled with more than $1 trillion in deductions, exemptions and credits, and they benefit people at every income level, according to data from the nonpartisan Joint Committee on Taxation, Congress’ official scorekeeper on revenue issues.

The Tax Policy Center estimates that 46 percent of households, mostly low- and medium-income households, will pay no federal income taxes this year. Most, however, will pay other taxes, including Social Security payroll taxes.

“People who are doing quite well and worry about low-income people not paying any taxes bemoan the fact that they get so many tax breaks that they are zeroed out,” said Roberton Williams, a senior fellow at the Tax Policy Center. “People at the bottom of the distribution say, but all of those rich guys are getting bigger tax breaks than we’re getting, which is also the case.”

Treasury Secretary Timothy Geithner was pressed at a White House briefing on the number of millionaires who pay taxes at a lower rate than middle-income families. He demurred, saying that people who make most of their money in wages pay taxes at a higher rate, while those who get most of their income from investments pay at lower rates.

“So it really depends on what is your profession, where’s the source of your income, what’s the specific circumstances you face, and the averages won’t really capture that,” Geithner said.
Fair share? I fucking HATE this lying scumbag.
 

whiskeyguy

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Jan 12, 2010
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#5
Can someone tell me if capital gains tax is paid on realized profits (ie- only if you actually sell your stocks/bonds/whatever) or on the paper profit?

Either way, the President is treating the different rate for long term capital gains as a "gimme" to rich people. It isn't. The purpose isn't to give something to rich people: it's to encourage people to fucking invest their money. The more of their money that people invest, the better off the economy is.

Is the President more interested in playing class warfare than he is in actually helping the economy?
I'm pretty sure capital gains are taxed when they are realized (at least in most or all situations)... being you are taxed when you cash out.

In response to the story, are people really this stupid when it comes to the tax code? Guess what, millionaires are not taxed at a lower rate than the rest of us. If one person makes $1 million, and another makes $1 billion, they both pay the same tax on the first million. The second, third, and fourth millions may be taxed at a different rate, and possibly the average is a lower rate, but when you hear a millionaire paid 20% in taxes it just isn't true.

Also, I'm not absolutely against raising taxes, but show us you can cut spending first. I'm not going to ask my employers to contribute more money into a system that is this fucked up. As an example (not putting much thought into the ratio) I'll support $1 in new taxes for every $5 cut out of the federal budget.
 

ruckstande

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Just flat tax everyone please. Why is this so hard to do? 10% across the board, no exemptions, this will make it easy for everyone to figure out. No tax breaks on donations, children, first time home buyers, nothing.
 

Creasy Bear

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high-income families and individuals, investment income is often taxed at a lower rate than wages.
And right there is the operative term... investment income.

If you don't know what that term means, and/or you don't understand what continuous investment means to the economic well-being of this country... THEN SHUT YOUR FUCKING YAP AND GO FIND OUT!

Fucking ridiculous... punish the productive and industrious and reward the shittums and the burdens. Fucking victim worship/success vilification run amok.
 

Creasy Bear

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Just flat tax everyone please. Why is this so hard to do? 10% across the board, no exemptions, this will make it easy for everyone to figure out. No tax breaks on donations, children, first time home buyers, nothing.
Because the government would collapse if they did that. The 10% crumb you'd get out of the lower shittums(and good luck even squeezing that out of them) wouldn't even come close to offsetting the massive hit in tax revenue you'd take when you cut 20-30% off of what the top earners are paying in taxes.

You have to realize how dependent the government/country is on the massively disproportionate gouge they take out of the top 10% of earners.
 
Oct 4, 2004
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#9
Just flat tax everyone please. Why is this so hard to do? 10% across the board, no exemptions, this will make it easy for everyone to figure out. No tax breaks on donations, children, first time home buyers, nothing.
That 10% is bigger for someone making $30,000 than it is for someone making $3 million.

Gee, this new millionaire's tax may be bad. Anthony might have to lower his pool temperature to 85 degrees.
 

Party Rooster

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#11
Can someone tell me if capital gains tax is paid on realized profits (ie- only if you actually sell your stocks/bonds/whatever) or on the paper profit?
It's only if you sell it.

Either way, the President is treating the different rate for long term capital gains as a "gimme" to rich people. It isn't. The purpose isn't to give something to rich people: it's to encourage people to fucking invest their money. The more of their money that people invest, the better off the economy is.

Is the President more interested in playing class warfare than he is in actually helping the economy?
They were reduced in 2003. How many jobs did that create from 2003-2007?
 

Creasy Bear

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#13
That 10% is bigger for someone making $30,000 than it is for someone making $3 million.

Gee, this new millionaire's tax may be bad. Anthony might have to lower his pool temperature to 85 degrees.
And the manager of your restaurant might have to lower your salary to 8.50 dollars... or 0 dollars.

If you think the ramifications of a millionaire's tax are only going to be felt by millionaires, you need to do a little reading...

 

fletcher

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I dont know, Im all for it.

Bill O’Reilly Threatens To Quit If Higher Taxes For Millionaires Are Enacted
Reported by Ellen - September 20, 2011 - Comments (12)


Guess what, America? Bill O’Reilly plans to take his marbles and go home if we don’t play by his rules. Apparently, looking out for the folks has its price and it’s a steep one. Never mind that a large majority of Americans (i.e. “the folks”) want tax increases on the wealthy. If O’Reilly doesn’t get his way, he’s going to quit his job and stop making investments. Way to show your love for your country, O’Reilly!

O’Reilly said in his Talking Points segment that opens each show that he wants the federal government to get more money, but just not from him. “If you tax achievement, some of the achievers are going to pack it in,” he said, suggesting the money should come from people who are poorer - an idea he has previously floated. “My corporations employ scores of people. They depend on me to do what I do so they can make a nice salary. If Barack Obama begins taxing me more than 50%, which is very possible, I don’t know how much longer I’m going to do this. I like my job but there comes a point when taxation becomes oppressive. Is the country really entitled to half a person’s income?”

In fact, PolitiFact reports that during the Eisenhower administration, the top tax rate was about 90% for workers earning the equivalent of $1.6 million for an individual and $3.2 million for a couple. Someone making the 1954 equivalent of $373,650 in today's money would have paid a tax rate of 72 percent back then. I’m guessing O’Reilly is a lot closer to earnings of $1.6 million than $373,650.

In the segment immediately following the Talking Points, O’Reilly took it a step further, saying, “I’m absolutely not gonna buy stocks if he ups the capital gains to 40%... You raise that cap gains tax up above 20, I ain’t going on.”

Go ahead, President Obama. Call his bluff.
Link
 

Josh_R

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#18
Is the President more interested in playing class warfare than he is in actually helping the economy?
Do you even have to ask? Three years and the only thing he can propose to fix the economy is "stimulus package" and "tax the rich". That's it, period.

In response to the story, are people really this stupid when it comes to the tax code?
They voted for Obama, didn't they? Of course they are, 45% of them don't pay any taxes. How would they understand taxes?

Just flat tax everyone please. Why is this so hard to do? 10% across the board, no exemptions, this will make it easy for everyone to figure out. No tax breaks on donations, children, first time home buyers, nothing.
Fuck yeah.

Because the government would collapse if they did that. The 10% crumb you'd get out of the lower shittums(and good luck even squeezing that out of them) wouldn't even come close to offsetting the massive hit in tax revenue you'd take when you cut 20-30% off of what the top earners are paying in taxes.

You have to realize how dependent the government/country is on the massively disproportionate gouge they take out of the top 10% of earners.
Good, let it. Let these assholes see what it feels like to absolutely have to make cuts to stay alive.
 

Hate & Discontent

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Aug 22, 2005
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#20
Never mind the fact that someone paying 20% on a 1 million dollar a year income is paying as much as nearly seventeen people making 60k a year at the same tax percentage. Plus, people making that much money can and will find more ways to evade their taxes as you raise their effective tax rates. Hasn't it been proven time and again that raising tax rates actually LOWERS tax incomes? Just go to a fucking flat tax and be done with it already.
 

Josh_R

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Jan 29, 2005
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#21
Never mind the fact that someone paying 20% on a 1 million dollar a year income is paying as much as nearly seventeen people making 60k a year at the same tax percentage. Plus, people making that much money can and will find more ways to evade their taxes as you raise their effective tax rates. Hasn't it been proven time and again that raising tax rates actually LOWERS tax incomes? Just go to a fucking flat tax and be done with it already.
Jesus Christ, this video is from 2008 but it sounds like he could have said it yesterday.
[video=youtube;WpSDBu35K-8]http://www.youtube.com/watch?v=WpSDBu35K-8[/video]
 
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