As my morning begins the “BIG” political news appears to be the Republicans agreement of $200 billion dollars in increased tax revenues. The media is acting like this is some major capitulation on the Republicans part. The Republicans, however, since Paul Ryan’s budget, have shown a willingness to close tax loop-holes to raise revenues.
Let us remember the President’s response to Paul Ryan’s budget. He produced an unprecedented second budget proposal. Although, he never formally introduced a second plan, even after his original budget was voted down unanimously by the Senate.
Let us look at some of the major components in the President’s proposal:
- Raise the tax revenue target from 18-19 percent of the economy (historical) to 21 percent of the economy.
- Raise net taxes by $1, $2, or $3 trillion over the next decade.
- A promise of $3 in spending cuts for every $1 in tax hikes.
- A tax hike “trigger” to pay for higher levels of government spending.
- Raise the rate at which two-thirds of small business profits face taxation, from 35% to 39.6%.
- Raise the tax rate on capital gains and dividends from 15% to 23.8%
- Raise the death tax rate from 35% to 45%, and cut the exemption from $10 million to $3.5 million.
- No rate target on “tax reform.” .
- Keep the higher taxes of Obamacare in place.
What are some of those higher taxes in Obamacare?
I’m glad you asked:
- the excise tax penalties associated with the individual and employer mandates
- the 3.8 percent surtax on investment income
- the “Cadillac plan” tax on health insurance plans
- the cap on flex accounts that will hurt families with special needs children
- the hike in the Medicare payroll tax to 3.8 percent
- the “medicine cabinet tax,” which prevents buying over-the-counter medicines with pre-tax dollars in a FSA, HSA, or HRA
- the new tax on medical device manufacturers
- the new limitation on medical itemized deductions
- the tanning tax
Every time the President uses his ridiculous line about millionaires and billionaires sharing the sacrifice, stop and think. Think about these taxes he wants. They are not just for millionaires and billionaires, many of these taxes affect the middle class. While the President claims to want to get only the corporate jet loop-hole, remember he is also eyeing other pockets, many of which are not that deep. Then remember his promise not to raise taxes on anyone making less than $250,000. It is clear that is a promise he is more than willing to break or rather already broke.(The tanning tax has already been implemented.)