Obama Deficit Plan Delivers Bold Clash Of Visions

[ProSense]

Obama Deficit Plan Delivers Bold Clash Of Visions

By Matthew Yglesias

So as you’ll recall, having already agreed to large reductions in domestic discretionary spending to resolve the appropriations lapse fight at the beginning of the year, President Obama and GOP congressional leaders agreed to the super committee/trigger process to obtain further deficit reduction. If the super committee fails to agree, the trigger will be pulled and then there’s going to be an ensuing political fight over who’s to blame for that and who has the better vision for the long-term. That, I think, is the correct context into which to place the deficit reduction plan the president is proposing today. It’s not so much a negotiating position as it is a fall-back. If the super committee deadlocks, and we just need to head into Election Day 2012 with two different visions, this is the one the White House intends to run on.

What’s in it?

Well, $1.5 trillion of it is higher taxes. About half of that is the expiration of the “rich people only” portion of the Bush tax cuts. The rest comes from closing loopholes and for the proposed new millionaire’s minimum tax so that high-income individuals won’t be paying lower marginal rates than the middle class.

Then you have about $1 trillion in war savings as the fighting winds down in Iraq and Afghanistan.

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[Mass]

1. They need to change this term of new "millionaire" tax.

TYpically, a millionaire is somebody who has more than one million is assets, and while these people are generally comfortable, this is not what he is talking about here, but people with an income of 1 million dollars.

This is important because you can be sure the RW will say they are hurting the middle class. This morning, NPR was already confusing the two types of people.

[ProSense]

2. Frankly

"This is important because you can be sure the RW will say they are hurting the middle class. This morning, NPR was already confusing the two types of people."

...the RW is going to distort whatever is proposed. The fact is income over $1 million is a lot.

Here is what Robert Reich proposed earlier this year:

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The most direct way to get more money into their pockets is to expand the Earned Income Tax Credit (a wage subsidy) all the way up through people earning $50,000, and reduce their income taxes to zero. Taxes on incomes between $50,000 and $90,000 should be cut to 10 percent; between $90,000 and $150,000 to 20 percent; between $150,000 and $250,000 to 30 percent.

And exempt the first $20,000 of income from payroll taxes.

Make up the revenues by increasing taxes on incomes between $250,000 to $500,000 to 40 percent; between $500,000 and $5 million, to 50 percent; between $5 million and $15 million, to 60 percent; and anything over $15 million, to 70 percent.

And raise the ceiling on the portion of income subject to payroll taxes to $500,000.

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He started tax increases at $250,000.

[Mass]

3. yes, income over $1 million is a lot (too much)

but a millionaire is not somebody with over a million in income, but 1 million is assets. No need to help the RW. Ny $91 year old MIL has an asset of about $1 M between her house and her stocks/bond. Her income is about $70,000, less now with lower interest rates. While she is comfortable, she is not this type of rich people the bill is targeting. I had to convince her that she was not targeted.

So, may be it would be nice if they could find another terminology, because she is not going to be the only senior frightened.

[ProSense]

4. I understand what you're saying

but every proposal from Bernie Sanders' to the People's Budget refers to taxing incomes $1 million and over as a "millionaire's tax."

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Schakowsky millionaire tax rates proposal (adding 45%, 46%, 47%, 48%, and 49% top rates) The Schakowsky plan creates five additional income tax brackets, starting at 45 percent for married couples making over $1 million dollars a year and increasing to 49 percent for people making $1 billion and over. The current top tax rate is 35 percent for people making $379,150 a year or more.

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Millionaire's tax resonates with people. What are the chances that most individuals earning $1 million a year are not millionaires?

[Mass]

5. They are probably multi-millionaires or billionaires.