Topic: Obama budget plan to tax the rich | |
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US President Barack Obama will seek to raise taxes on the wealthy as he unveilshis budget later, prompting an election year fight with Republicans.
The spending proposal includes$1.5 trillion (£950bn) in new taxes, much from allowing Bush-era tax cuts to expire. He will also call for a Buffett Plan tax hike on millionaires and job-creating infrastructure projects. The budget must be agreed between the White House and Congress. Mr Obama will address students at acollege in Virginia on Monday morning as he outlines his 2013 spending proposal toCongress. Dead on arrival? The BBC's Steve Kingstone says the budget will offer a clear contrast between Mr Obama's vision and that of Republicans. At its core will be the idea that the wealthiest Americansshould pay more in tax and that, in the short-term, a chunk of that extra revenueshould be spent on job creation, manufacturing and upgrading the nation's schools. But Republican leaders, who portray Mr Obama as a tax-and-spend liberalstoking class warfare,have already pronounced the budget dead on arrival. Mr Obama's plan to allow George W Bush-era tax cuts to expire would affect families making$250,000 or more peryear. The president would also put in place a rule named after billionaire Warren Buffett to tax households making more than $1m annually at a rate of at least 30%. In a populist touch, over the next decade,the plan would levy anew $61bn tax on financial institutions, in an effort to recover the costs of the financial bailout. And it would raise a further $41bn by cutting tax breaks foroil, gas and coal companies. Republicans have been railing against the budget, which would entail a fourthyear in a row of trillion-dollar-plus deficits. The spending plan, which would take effect on 1 October, projects a deficit for this year of $1.33 trillion, with the amount shrinking to$901bn by 2013 and$575bn in 2018. Mr Obama will also propose more than$100bn in investments for transportation projects, revamps for tens of thousands of schools and for the hiring of teachers and emergency service workers. The plan would seek to defer major spending cuts until the economy is on a more steady footing, a priority as Mr Obama seeks re-election in November. "I think there is pretty broad agreement that the time for austerity is not today," new White House chief of staff Jack Lew told NBC's Meet the Press on Sunday. http://www.bbc.co.uk/news/world-us-canada-17014744 |
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Keep blowing up that bubble...
Economic suicide.. |
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A $901 billion deficitnext year translates to 5.5 percent of GDP, according to the administration, and would be the first time since Obama took office that the shortfall fellbelow $1 trillion.
The plan, for the fiscal year that begins Oct. 1, wouldwring $360 billion insavings out of Medicare and Medicare over the next decade. Another $278 billionin savings would come from farm subsidies, federal workers’ retirementplans and the Pension Benefit Guaranty Corporation, which insures company pensions. Defense spending would fall by 5 percent from last year’s levels, according to the summary. The budget also relies on what Republicans call an accounting trick to count hundreds of billions in savings tied to the drawdown of the war in Iraq. |
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Among the winners in the plan would be college students and their families, who would see an expiring tax break designed to defray tuition costs extended.
A pending rise in student-loan interest rates wouldbe postponed, the number of work-student jobs would be expanded and the maximum Pell Grant for poor college students would be kept at$5,635 through 2014-2015. Congressional Republicans had proposed cutting the maximum grant by 15 percent last year. Also, the plan wouldprovide new incentives for universities to rein in tuition costs. And the budget will contain a new $5 billion program to encourage states and schools to train and reward teachers, the administration said. Manufacturing would be another winner, with a 19 percent increase in spending for advanced manufacturing research and development. It would eliminate taxbreaks the White House says encourage manufacturers to send jobs overseas while offering tax incentives for companies to invest in areas hit hard by job losses. |
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