Semi-Retired President To Propose Tax Increases On The Rich

Last time he tried this, all his rich buddies, who were making massive donations to Obama’s campaign, along with other Democrats, Democrat groups, and outside Democrat groups, felt this was great. They were like “yeah, raise my income tax.” I doubt they’ll be so enthusiastic this time

(Huffington Post) During his State of the Union address on Tuesday, President Barack Obama will lay out a plan to extend tax credits to the middle class by hiking taxes on wealthier Americans and big banks, according to senior administration officials.

Under the plan, the capital gains tax for couples with income over $500,000 per year would be raised from its current level of 23.8 percent up to 28. The plan would also strip a tax break, known as a “step-up,” that allows heirs to avoid capital gains taxes on large inheritances.

In addition, the plan would institute a new tax on the biggest financial institutions, basing the fee on liabilities in order to discourage risky borrowing. The administration says the fee would hit the roughly 100 banks that have assets of $50 billion or more.

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So many of those rich folks, such as Warren Buffett, would not have been affected much by an income tax increase. Raising the capital gains rate, along with several of the others Obama is trotting out, will have a big effect on The Rich. This has zero chance of passing the Republican Congress. Not that Obama will actually do more than give a speech, as no one actually expects Obama to do anything as pedestrian as sending legislation over to Congress.

The president’s plan would use revenues from those tax code changes to finance credits aimed at the middle class, officials said. That includes extending the earned income tax credits to families without children, which would benefit an estimated 13 million low-income workers, while also tripling the maximum tax credits for child care in low- and middle-income homes.

This part could happen, I’d suspect the GOP Congress could jump on reducing taxes on the mid-low income citizens. Of Course, Team Obama partially portrays the entire thing as somehow helping make the economy run better. They never explain how, nor do they explain why they didn’t do this anytime over the last 6 years, particularly during his first two years when Congress was in the hands of Democrats. The other reason?

“This proposal is probably the most impactful way we can address the manifest unfairness in our tax system,” an administration official said.

Of course. Redistribution of wealth. Class warfare. The same ol’ same ol’ schtick. Of course, the tax code is in fact unfair, in that it fails to provide equal treatment under the law, having different rates for different earners. Having different breaks that only some people are eligible for.

In addition to the tax credits, the president’s proposals will also include a plan to give more workers access to retirement accounts. Employers with at least 10 workers who don’t currently offer their employees a 401(k) would have to enroll them in what’s known as an automatic IRA, a plan that Obama has included in previous budgets he’s proposed.

While it’s nice for companies to offer 401(k)’s, is it government’s job to force companies to offer them? No. No it isn’t.

Another reason for doing this?

(Fox News) Obama’s call for higher taxes on the wealthy is likely to further antagonize Republicans who are already angry with the president over his vows to veto several of the party’s priorities, including legislation to approve construction of the Keystone XL oil pipeline, make changes to the president’s signature health care legislation and block his executive actions on immigration.

Obama wants to pick a fight. It’s what he does. He knows that the tax increases won’t get through Congress, and he’ll assault and impugn Congress over the tax decreases which they will most likely support during the SOTU speech. This is the reason the plan was released early, to make sure Congress will have had time to read and hear about it: he can denigrate Republicans for not taking action immediately. Like Monday and Tuesday.

Expect this to be a very dry and very boring State Of The Union address, with even more people tuning out.

Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.

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