Posted by
Defend America on Tuesday, February 02, 2010 5:36:26 PM
President Obama’s budget seeks an end to tax break for the middle class
By Walter Alarkon
-
02/01/10 08:28 PM ET
Grappling to contain record deficits, President Barack Obama is seeking
to end a middle-class tax break he once said would be permanent.
The
$3.8 trillion budget request rolled out by the White House on Monday
would renew the Making Work Pay tax credit for fiscal 2011, but then
would have it sunset.
That’s a switch from last year, when Obama’s budget called for making the tax credit permanent.
The
cut costs the federal government about $63 billion in annual revenue
while putting up to $400 in the pockets of workers making less than
$95,000. It was approved for the first time in last year’s $787 billion
stimulus package.
An administration official said the tax credit reflects changing realities in Congress on climate change legislation.
...
The administration also wants to roll back former President George W.
Bush’s tax cuts for people making more than $250,000 annually. That
would reinstate the 36 percent and 39.6 percent tax rates.
http://thehill.com/homenews/administration/79161-presidents-budget-seeks-an-end-to-tax-break-for-the-middle-class
From Alan Viard at The American:
President Obama would permanently extend the Bush tax cuts for
households with incomes below $200,000 ($250,000 for couples);
statements that the president would allow the Bush tax cuts to expire
are true only for households above those income levels. The president
has also proposed some additional middle-class tax cuts.
Should this make us happy about President Obama’s budget? Quite the opposite. As Arthur Brooks, Alex Brill, and I have pointed out,
the middle-class tax cuts that the president would extend have large
revenue losses and do relatively little to promote economic growth. The
tax cuts at the top that the president would allow to expire would
significantly lower marginal tax rates on saving and investment and
promote long-run growth. Letting those tax cuts expire would ultimately
harm the middle class by lowering their wages.
http://blog.american.com/?p=10105