Category: Stimulus Bill

Obama’s Proposals To Increase Tax Revenue

President Obama proposed that a unpopular category of taxes be replaced with one that raises 2012 taxes for the 1% of the wealthiest Americans.

His proposals asked for higher tax rates on estates, fund managers, and the gas and oil industries. Bush era cuts would be allowed to expire, and taxes on dividends for the wealthiest citizens would rise to ordinary levels.

The proposals put forth are the first phase of the White House plan to deal with a projected shortfall in tax revenue expected to occur after the presidential elections.

Incomes over $1 million would be taxed at a 30% rate as suggested by Warren Buffet. This proposal (The Buffet Rule) would negate the alternative minimum tax adopted in 1969. The plan was considered to be irrelevant because it was never indexed to take inflation into account. The result was a tax on middle class Americans that was complicated by many deductions and credits which forced Congress to take many temporary steps to fix the problem.

The loopholes may have made sense if the tax system had been completely revised. The wealthy needed  to pay their fair share of taxes, and not attempt to avoid their fair share of tax responsibility, which is what the old rules allowed. Republicans regard Obama’s attempt as a form of class warfare, choosing instead to focus on reducing spending as opposed to agreeing with the democrat insistence on raising taxes by eliminating tax cuts.

The president was in favor of allowing the tax cuts of 2001 and 2003 to expire for individuals earning more than $200,000 annually and $250,000 for households. Upper income earners would see their deductions limited.

Related articles

What You Did Not Know About The Brownback Tax Plan

Poor Kansans would be affected most by the Brownback tax plan

Sam Brownback, Kansas Governor, came up with this new tax plan with the aim of overhauling the Kansas tax code.

Under the new tax plan, taxpayers who earn less than 25,000 dollars per year will be required to pay 156 dollars more in income taxes. In contrast, more than 21,000 taxpayers who make more than 250,000 annually will get an average reduction of around 5,200 dollars in income taxes.

On average, 185,692 taxpayers who earn between 50,000 dollars and 75 dollars will pay 282.90 dollars less in the proposed plan.

These figures were concocted by Kansas Department of revenue and not by some special interest group.

After submission to a special senate committee that specializes in tax codes, the plan raised a storm as critics say that its a government conspiracy to shift the cost of running the government from the rich to the impoverished Kansans.

Anthony Hensley minority leader called it, Robin Hood in reverse. He said that the plan would basically rob the poor to make the rich richer.

The Brownback administration insisted that the plan is meant to help the most impoverished Kansans.

Nick Jordan, Revenue Secretary, claimed that the plan would create new economic opportunities across the state for all Kansans regardless of their income level.

The tax plan lowers the tax bracket for the lowest earners, those earning less than 15,000 dollars, to 3 percent from 3.5 percent and that of the highest earners from 6.45 to 4.9 per cent.

The intention of the state was to make 2012 taxes flatter and simpler for all Kansans.

Related articles