Politics
Obama lays out deficit plan, says the rich must ‘pay their fair share’
The deficit reduction plan represents an economic bookend to the US$447 billion in tax cuts and new public works spending that Obama has proposed as a short-term measure to stimulate the economy and create jobs. He’s submitting his deficit fighting plan to a special joint committee of Congress that is charged with recommending deficit reductions of up to US$1.5 trillion over 10 years.
Republicans were already lining up against the president’s tax proposal before they even knew the magnitude of what he intended to recommend.
“Class warfare may make for really good politics but it makes for rotten economics,” Paul Ryan, chairman of the House Budget Committee chairman, said Sunday in reaction to one Obama tax proposal to impose a minimum tax rate on wealthy filers.
Former President Bill Clinton on Monday dismissed Republican claims that the tax on the wealthy would discourage jobs creation and hamper economic growth.
“Republicans in Washington always say the same thing,” Clinton said on NBC’s “Today” show. He called their argument an insult to wealthy Americans, including many who don’t mind paying more.
One of Obama’s proposals would set a minimum tax on taxpayers making US$1 million or more in income. The measure, Obama is going to call it the “Buffett Rule” for billionaire investor Warren Buffett, is designed to prevent millionaires from taking advantage of lower tax rates on investment earnings than what middle-income taxpayers pay on their wages.
At issue is the difference between a taxpayer’s tax bracket and the effective tax rate that taxpayer pays. Millionaires face a 35 percent tax bracket, while middle income filers fall in the 15 or 25 percent bracket. But investment income is taxed at 15 percent and Buffett has complained that he and other wealthy people have been “coddled long enough” and shouldn’t be paying a smaller share of their income in federal taxes than middle-class taxpayers.
Copyright 2011 The Associated Press.
