Posts Tagged ‘Upper bracket tax cuts’

The truth about President Obama’s budget

February 5, 2015

I like to write good things to write about President Obama.  It helps me to convince myself that I am a fair-minded person, and also convince my friends, most of whom are supporters of the President.

But usually when I do, it turns out there is a catch.  I feel as if I were Charlie Brown in the comic strip once again trusting Lucy to hold the football so he can kick it.

I wrote a post the other day praising the President for budget proposals, which contained some modest tax increases on the upper income brackets and some modest benefits from working people.

But now I realize I missed important parts—more spending for the military, tax reductions for the rich and cuts to Medicare.

Andre Demon, writing for the World Socialist Web Site, pointed out:

Obama’s budget proposal would increase Pentagon spending by 7 percent, adding an additional $38 billion to bring the total defense budget to $534 billion. 

Obama is separately proposing $51 billion in additional funding for the wars in Iraq and Syria, including money to back the so-called “moderate” opposition in Syria, as well for as the ongoing US troop presence in Afghanistan.

Newsweek - Obama - The Democrats ReaganThe budget calls for the corporate tax rate to be cut to 25 percent for manufacturers and 28 percent for other corporations, down from the current rate of 35 percent.

The proposal would also allow US corporations to repatriate past profits generated overseas at a tax rate of only 14 percent.  Foreign profits would be taxed at 19 percent in the future. 

Currently, US corporations pay a rate of 35 percent on foreign profits, which many corporations avoid by keeping their foreign earnings abroad.

These tax cuts are accompanied by $400 billion in cuts to Medicare, Medicaid and the Department of Health and Human Services. 

The budget proposes to raise $66 billion over ten years by charging higher Medicare premiums to upper-income patients, a move that would undermine Medicare’s status as a universal entitlement and open the door to means testing and the transformation of the government health insurance program for seniors into a poverty program.

The plan would cut another “$116 billion in Medicare payments to drug companies for medicines prescribed for low-income patients,” according to the New York Times. 

It would also slash $100 billion for the treatment of Medicare patients following their discharge from the hospital, affecting primarily the elderly.

via World Socialist Web Site.

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Taxes, welfare and Alan Greenspan

January 17, 2014

richpeoplejobs

Alan Greenspan, the former chair of the Federal Reserve Board, believed that the key to increasing a nation’s wealth is investment.  Every dollar that was collected in taxes on rich people and corporations and spent on unemployment compensation, food stamps and free health care was, in his view, one less dollar available for investment.  So he favored lower taxes on the rich and less spending on the poor.  We now know how this worked out.

American corporations are stuffed with cash, and the Federal Reserve System has pumped trillions more in cash into the big banks through its “quantitative easing” program.  But the U.S. economy, and to some extent the world economy is stalled, because of the lack of buying power of the American middle class.  That buying power was sustained in earlier eras by rising earnings, and then by rising participation in the work force and rising debt.  But all of these have run their course.  No rational business will increase production unless there is a good market for the product.

Click on Alan Greenspan’s ‘The Map and the Territory’ review by Robert Solow for a more in-depth discussion of this issue.

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The case for letting the Bush tax cuts expire

September 9, 2010

Click on the charts if they are too small to be readable.

Americans in all income brackets benefited from the tax reductions enacted in 2001 and 2003, but it was the upper-bracket tax cuts that had the big effect on the federal budget deficit.