Obama to propose tax increases of $320 billion over 10 years

Obama aides previewing the president's State of the Union speech say that the administration plans to close "loopholes" in the tax system and charge a fee to big banks to curb risky borrowing. The tax increase package would total $320 billion over the next decade.

The president then plans to take that money and give it to the "Middle Class" in the form of tax incentives and cuts.

Here's the broad outline of the plan summarized by Reuters:

In a conference call with reporters to preview the taxation aspect of Obama's address, one official said some of the ideas the president is outlining already have "clear congressional bipartisan support or are ideas that are actually bipartisan in their nature."

Obama's proposals call for reforming tax rules on trust funds, which the administration called "the single largest capital gains tax loophole" because it allows assets to be passed down untaxed to heirs of the richest Americans.

They also would raise the capital gains and dividends rates to 28 percent, the level during the 1980s Republican presidency of Ronald Reagan.

As a way of managing financial risk that could threaten the U.S. economy, Obama also wants to impose a fee of seven basis points on the liabilities of U.S. financial firms with assets of more than $50 billion, making it more costly for them to borrow heavily.

The changes on trust funds and capital gains, along with the fee on financial firms, would generate about $320 billion over 10 years, which would more than pay for benefits Obama wants to provide for the middle class, the official said.

The benefits mentioned on Saturday would include a $500 credit for families with two working spouses, tripling the tax credit for child care to $3,000 per child, consolidating education tax incentives and making it easier for workers to save automatically for retirement if their employer does not offer a plan.

The price tag on those benefits, plus a plan for free tuition at community colleges that Obama announced last week, would be about $235 billion, the official said. Specifics on the figures will be included in the budget Obama will send to Congress on Feb. 2.

"We're proposing more than enough to offset the new incremental costs of our proposals without increasing the deficit," the administration official said.

So, a guy works his whole life, sets up a trust fund so that his kids can benefit from his labors after he's gone, and Obama thinks it's perfectly alright for the federal government to swoop in and scarf up 28%. Most families who take advantage of this tax "loophole" are the families of successful small businessmen - not "trust fund babies" who probably won't miss the 28% anyway.

But it's not so much the amount as it is the concept. Obama once again wishes to punsh the most successful Americans, who build for their family's future, only to see the feds appropriate a sizable part of that future. It is a rancid redistribution scheme and Republicans shouldn't even bring it to the floor.

As for hitting up the banks, this proposal makes more sense, although how much of a deterrent it will be to keep them from making risky loans and investments is a matter of conjecture - especially when the federal government has developed policies that encourage risky lending.

Some of the "Middle Class" benefits the president wishes to bestow make sense. The tax credit for working spouses and tripling of the child care credit would be great - if we could pay for it. And therein lies the biggest problem with the president's insistence on tax increases.

Is there a serious argument that there isn't $32 billion we can't cut from a $4 trillion budget every year for the next 10 years? Before we go raising taxes on anyone, every last dime of wasteful, unnecessary, bizarre, and fraudulent spending should be cut from the budget. I refuse to believe that there is no fat in a $4 trillion budget. That's nonsense and only 5 year olds and liberals believe otherwise.

The problem isn't that we don't take in enough in taxes. A mentally challenged orangutang knows that our problem is that we spend too much. Is it too much to ask to cut the budget intelligently? Or should we head to the zoo and look to replace Congress with mentally deficient simians?

Obama aides previewing the president's State of the Union speech say that the administration plans to close "loopholes" in the tax system and charge a fee to big banks to curb risky borrowing. The tax increase package would total $320 billion over the next decade.

The president then plans to take that money and give it to the "Middle Class" in the form of tax incentives and cuts.

Here's the broad outline of the plan summarized by Reuters:

In a conference call with reporters to preview the taxation aspect of Obama's address, one official said some of the ideas the president is outlining already have "clear congressional bipartisan support or are ideas that are actually bipartisan in their nature."

Obama's proposals call for reforming tax rules on trust funds, which the administration called "the single largest capital gains tax loophole" because it allows assets to be passed down untaxed to heirs of the richest Americans.

They also would raise the capital gains and dividends rates to 28 percent, the level during the 1980s Republican presidency of Ronald Reagan.

As a way of managing financial risk that could threaten the U.S. economy, Obama also wants to impose a fee of seven basis points on the liabilities of U.S. financial firms with assets of more than $50 billion, making it more costly for them to borrow heavily.

The changes on trust funds and capital gains, along with the fee on financial firms, would generate about $320 billion over 10 years, which would more than pay for benefits Obama wants to provide for the middle class, the official said.

The benefits mentioned on Saturday would include a $500 credit for families with two working spouses, tripling the tax credit for child care to $3,000 per child, consolidating education tax incentives and making it easier for workers to save automatically for retirement if their employer does not offer a plan.

The price tag on those benefits, plus a plan for free tuition at community colleges that Obama announced last week, would be about $235 billion, the official said. Specifics on the figures will be included in the budget Obama will send to Congress on Feb. 2.

"We're proposing more than enough to offset the new incremental costs of our proposals without increasing the deficit," the administration official said.

So, a guy works his whole life, sets up a trust fund so that his kids can benefit from his labors after he's gone, and Obama thinks it's perfectly alright for the federal government to swoop in and scarf up 28%. Most families who take advantage of this tax "loophole" are the families of successful small businessmen - not "trust fund babies" who probably won't miss the 28% anyway.

But it's not so much the amount as it is the concept. Obama once again wishes to punsh the most successful Americans, who build for their family's future, only to see the feds appropriate a sizable part of that future. It is a rancid redistribution scheme and Republicans shouldn't even bring it to the floor.

As for hitting up the banks, this proposal makes more sense, although how much of a deterrent it will be to keep them from making risky loans and investments is a matter of conjecture - especially when the federal government has developed policies that encourage risky lending.

Some of the "Middle Class" benefits the president wishes to bestow make sense. The tax credit for working spouses and tripling of the child care credit would be great - if we could pay for it. And therein lies the biggest problem with the president's insistence on tax increases.

Is there a serious argument that there isn't $32 billion we can't cut from a $4 trillion budget every year for the next 10 years? Before we go raising taxes on anyone, every last dime of wasteful, unnecessary, bizarre, and fraudulent spending should be cut from the budget. I refuse to believe that there is no fat in a $4 trillion budget. That's nonsense and only 5 year olds and liberals believe otherwise.

The problem isn't that we don't take in enough in taxes. A mentally challenged orangutang knows that our problem is that we spend too much. Is it too much to ask to cut the budget intelligently? Or should we head to the zoo and look to replace Congress with mentally deficient simians?