Higher Taxes Coming, Just Like Obama Promised
Posted May 12, 2009 04:36pm EDT by Aaron Task in Newsmakers, Recession
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People always complain when politicians break their campaign promises. But "this White House feels strongly on the need to keep the promises and deliver" on campaign pledges, says Mike Allen, chief White House correspondent of Politico.com.
Of course, Barack Obama's campaign featured numerous pledges to raise taxes. As Allen and I discuss in the accompanying video, tax hikes and fear of more to come have taken center stage this week for a number of reasons of both immediate and long-term concern:
Fears about a financial system meltdown have subsided (for now).
The CBO upped its estimate for the government's deficit to $1.84 trillion for fiscal 2009 vs. a February projection of $1.75 trillion. For fiscal 2010, the deficit is now estimated at $1.26 trillion, up from $1.17 trillion.
Obama asked for $59 billion in additional taxes to pay for his health care program. The new proposals "are in addition to more than $1 trillion in tax increases over the next decade the president wants to impose beginning in 2011," Bloomberg reports.
The trustees who oversee Social Security predict the fund will be effectively wiped out by 2037 and that benefits paid will outweigh tax revenues brought in by the system by 2016.
The "green book" report showed the new 36% top tax rate would hit couples with about $235,000 of taxable income, or income after deductions and exemptions; not the $250,000 level Obama has long cited.
In addition, Obama stepped up efforts to close offshore tax loopholes, a highly contentious area where businesses are pushing back hard. Allen believes the president might be stymied on that front but won't be deterred from his broader agenda: "The president is willing to propose a lot, hoping he gets a little," Allen says.
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The figure keeps going lower and lower and lower.
