Barack Obama

"Obama's 10 New Taxes": Collect 'em all!

President Obama's budget doesn't just propose spending more money than ever before. It also raises taxes all over the place.

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President Obama's new budget plan doesn't just propose spending a historic amount of money over the coming decade. It also seeks to jack up the amount of tax revenue, all in the name of Mom, apple pie, and the great American middle class.

Politico identifies "biggest and boldest among his tax proposals." The estimated revenue would be collected over 10 years. Among the highlights (emphasis in original):

2. LIMITING ITEMIZED DEDUCTIONS FOR THE WEALTHY: Obama wants to limit the value of itemized deductions used by the wealthy, such as mortgage interest, to 28 percent of their income[*]. As it stands now, a write-off of $1,000 by a person in the top 40 percent bracket saves the taxpayer $400. Under the proposal, that same write-off would save that taxpayer just $280 because the value of the break is capped. Would raise $640 billion….

3. CAPITAL GAINS: The administration wants to hike the top rate to 28 percent from the current rate of about 25 percent with various surcharges, while expanding the number of things that would be subject to it. It would do that by cracking down on what's known as a "stepped-up basis."

Here's how it works: If you were to sell stock for $1 million that you bought for $100,000, you would pay capital gains taxes on the $900,000 profit. But if you die, and your kid gets the stock, he or she would be excused from paying taxes on the $900,000. For your child, the new starting point in calculating capital gains taxes would be the $1 million, so that $900,000 would escape taxation. It's a tax break that would mostly, though not exclusively, benefit the wealthy.

The administration's plan would end the stepped-up basis "loophole," though it would add various provisions aimed at shielding the nonwealthy and small businesses from having to pay the tax. Would raise $208 billion….

9. TOBACCO TAX: The administration proposes to nearly double taxes on cigarettes and small cigars to about $1.95 per pack from about $1.01 per pack, and index the tax for inflation. The hikes would pay for two politically powerful initiatives: an extension of the Children's Health Insurance Program — which is due to end this year if Congress doesn't extend funding — and Obama's ongoing proposals to guarantee universal access to preschool. Would raise $95 billion.

Read more here.

Congressional Republicans have declared Obama's budget "dead on arrival." Brain dead on arrival would be a better description. It seeks to spend $4.1 trillion in fiscal 2016, up from about $3.9 trillion in 2015. The main reason for spending more? To generate jobs, invest in the future, blah blah blah. The same rhetoric that Obama has used in every speech that he has ever given. The idea that the government might do more with less—or better yet, less with less—has never crossed his mind. The only way forward into the future is to do more less with more.

The 10-year spending and revenue plans that are included in budget plans are always jokes, but Obama doesn't even fake reaching budget balance and in fact shows growing deficits over time. At the same time, he increases defense spending in 2016 (the only year that really matters in any budget document since it's the only one that's actually under direct consideration during negotiation). So who knows, maybe Republicans, who had no trouble spending the country to oblivion during the Bush years, will go along. In any case, under their 2015 budget plan, the country would be spending $4 trillion in 2018, just two years later than Obama proposes.

For the entirety of the 21st century, we've seen the federal budget hit historic highs while national debt piles up and stupid, nonsensical, and failed policies and pursuits ranging from the wars in Iraq and Afghanistan to the drug to mass surveillance of Americans have eroded trust and belief in the government's ability and authority to dictate terms in our lives. Large majorities of Americans distrust the government and think it is trying to do too much.

And the response of the two major parties is, on the one hand, to spend even more money for the foreseeable future. And on the other hand, there's Obama's plan, which spends slightly more.

[*]: Economist David Henderson writes in to note that in fact Obama "wants to limit the tax break to 28% of their interest," not income.

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  1. 1. BUFFETT TAX: Reprising billionaire Warren Buffett’s gripe that he pays a lower tax rate than his secretary ? because ordinary income is taxed at higher rates than capital gains ? the White House wants millionaires to pay a minimum tax rate of 30 percent. The contrast between taxes on wages and investment was highlighted during the 2012 campaign, when Mitt Romney’s relatively low tax rate became an albatross for the Republican candidate. Would raise $35 billion.

    How about a Buffett tax on just Warren Buffett? I think we can all get behind that one.

    1. the Buffett Tax is a nice example of the condescension the ruling class has for regular folks. Buffett’s tax rate is different not because he is rich but because his income is not derived from a traditional salary like his secretary’s. Same with Romney and it became tiresome to explain that to the economically retarded. Obama, no shock, is doubling down on the retardation.

      1. And rather than recognize that perhaps the solution is to reduce the tax burden on hard-working people, the idea is to nick the rich a bit. So it’s triple retardation.

    2. Why doesn’t the sanctimonious creep just pay the billion dollars in back taxes that he already owes now that he’s been fighting in tax court for the last several years?

      1. Because he’s a lying hypocrite and his demand to “pay more taxes” is self-serving bullshit that won’t really affect him, but create incentives for others to do business with him on terms he finds favorable?

      2. He doesn’t owe any back taxes, you fucking idiot. Quit reading wingnut.com.

        1. Let me guess, your dodge is that it it BRK/A and not Warren Buffett…

          http://www.huffingtonpost.com/…..41099.html

          You really are a disingenuous fuck.

        2. It’s amazing to me the people you will defend that, if given the chance, would shit on you in a heartbeat.

          Are you against gov giving handouts to rich businessmen?

          Well, Buffet’s companies receive billions in subsidies from the gov. But go on believing he’s for higher taxes.

          http://www.againstcronycapital…..n-buffett/

          1. He’s for higher taxes…just not taxes that negatively affect him.

            For example, he believes in increasing estate taxes, because a large part of his business deals with arbitrage (identifying investments that are priced below their true market value). A lot of estates are comprised of illiquid assets (family farms, businesses, paintings, jewelry, etc) that are taxed at what the IRS determines are their market rate, so a huge tax bill means that many of those assets have to be sold to pay the taxes…and since they’re often in a hurry to sell, that means they are usually going to sell at terms favorable to the buyer. Buffett’s company goes after those assets. His company also sells vehicles by which to avoid those estate taxes.

            And that’s why he’s for higher taxes…because it fucks other people but improves his bottom line.

      3. I’ll be damned; I missed it at the time, but it turns out that Buffett actually beat the I.R.S. in court a week ago.

        Of course, the lying scumbag Dave Weigel here didn’t know that either. He has been lying all along every time that he claimed that this case wasn’t taking place. But good for you, Uncle Warren.

        1. The hypocrisy isn’t in winning the tax case.

          The hypocrisy is in fighting it at all while complaining he doesn’t pay enough.

        2. But I don’t understand, he wants to pay more!

          1. Gleefully pay more!

        3. Berkshire beat the IRS. That makes them something like 14 for 14. Buffett never owed a dime.

          1. Why didn’t he just pay it? He’s always bitchin he doesn’t pay enough.

            I don’t understand.

            Let me guess, you think Sharpton is a stand up guy too.

          2. But according to him, he owes them lots of dimes just by virtue of being rich. Funny how he never pays up though.

    3. Has anybody sent him the U.S. treasury’s mailing address yet? I’m sure he’s just misplaced it.

  2. The hikes would pay for two politically powerful initiatives: an extension of the Children’s Health Insurance Program ? which is due to end this year if Congress doesn’t extend funding ? and Obama’s ongoing proposals to guarantee universal access to preschool.

    Smoke up, America – it’s for the children!

    1. This is what kills me. I can almost see the rationale in collecting taxes to pay for the costs of long term smoking. But do they keep that money in a fund to pay for those costs? Fuck no. They use it to fund everything else so you can never get rid of it.

      Hennepin county’s special tax to pay for the Twin’s stadium collects more than it needs each year. Do they use the excess to pay down the debt early? Nope. They use it to pay for extended library hours and recreation for disadvantaged youth in the city. That means we will never get rid of the tax, even long after the stadium is paid off.

      1. But do they keep that money in a fund to pay for those costs? Fuck no.

        And now employers are gearing up to punish smokers in their paycheck by charging them more for health coverage. I once pointed out to HR the well-known fact that smokers die younger than non-smokers and therefore use less coverage but it fell on deaf ears. The notion that it’s all really about kultur and image isn’t sinking in.

  3. This is all just for show. He and his cronies know that this won’t pay down our deficit but for some reason his base get their panties wet whenever they hear the word tax hike.

  4. Hey Obama, don’t you get it? The American people want SPENDING, not taxes! What’s wrong with you?

    1. SPENDING, not taxes!

      Nice bumper sticker.

    2. That is true.

      Ol’ Jeb knows this also. Big spending with tax cuts for everybody!

      1. Right…because everyone here is such a big fan of the Bush presidencies and must really love Jeb.

        Fucktard.

  5. I’m generally for anything that keeps equities high, but the settlement with S&P that’s been reported the past couple of days is outrageous. Not sure if reason has reported on this yet, but it’s bad considering what their fake rating cost the markets.

    http://on.wsj.com/18K2bQU via @WSJ

    1. Their fake ratings cost us trillions. But they hide behind the 1A – “that is just our opinion, man” and SCOTUS agrees.

      Dodd-Frank supposedly makes them liable for misratings in the future.

      1. Turd.Burglar.

      2. Except when they downrated the governments bonds, the government sued them.

        Yeah, nothing fishy there.

    2. So after all these years, they determined that the ratings companies were the ones to blame for the crash?

      Gee, that’s nice to know. I could have sworn that it was George Bush and/or the banks that were to blame!

      1. Clinton more than Bush. And, the States were the big culprits, which everyone ignores because banks make such a great target.

        Something like 90% of the big first wave of foreclosures were from States that had no recourse against borrowers on homes. And, something like 90% of those were from people who had put less than 5% down.

        The States first, Clinton second, GWB third, lastly the banks. If you ask me. But, that doesn’t play out as well in the press.

  6. Can we call Tobacco Tax the Eric Garner Tax?

  7. Say, remember when Obama promised not to raise taxes on anyone making less than $250K?

    Yeah, neither does anyone else. Including Nick, who in the interest of fairness makes sure to get in a BOOOOOOSH!

    1. Say, I do remember that. His ability to turn every statement into a lie is quite astonishing. Bravo, Mr. President, bravo.

      1. Ah, but did he explicitly say *over what time period* the money had to be made?

        1. Actually, Rich, he did:

          Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes

          1. Linky? (Not doubting you, but want to use this).

            1. Here’s the quote on PolitiFact, shown as a broken promise.

            2. Here you go, Tonio: “Remarks in Dover, New Hampshire (September 12, 2008).” And here’s the whole paragraph:

              And I can make a firm pledge: under my plan, no family making less than $250,000 will see their taxes increase – not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes. My opponent can’t make that pledge, and here’s why: for the first time in American history, he wants to tax your health benefits Apparently, Senator McCain doesn’t think it’s enough that your health premiums have doubled, he thinks you should have to pay taxes on them too. That’s a $3.6 trillion tax increase on middle class families. That will eventually leave tens of millions of you paying higher taxes. That’s his idea of change.

              There are other zingers in there that make this a speech more against the Obama presidency than anything else.

            3. Thanks, guys.

    2. Can someone get me a broom handle or something? This memory hole is clogged.

  8. Is there no accounting for the decrease in these activities when a new tax is introduced? If you increase the cigarette tax, you will get less cigarettes sold.

    The step-up would affect everyone and impact the middle class the hardest. That tax would kill any money that comes from inheriting your parent’s house.

    Finally, why do we think the rich will sit there and take it? We saw what happened in France. The left loves to complain how the rich are cheating and getting out of paying their “fair share” but somehow by increasing taxes will prevent them from exploiting loop holes (rather than incentivize them to find more loopholes and spend more on tax lawyers).

    1. Taxes affect activity only when they’re intended to so so. Intent is magic.

    2. If you increase the cigarette tax, you will get less cigarettes sold.

      Well, fewer taxable cigarettes sold, anyway.

      1. ^^This^^

      2. There is evidence that increasing taxes on smokers encourages some people to quit. So yes, some of it will go underground, but others will quit.

  9. GOOBLE GOBBLE

    GOOBLE GOBBLE

    FAIR SHARE

    GOOBLE GOBBLE

  10. If you were to sell stock for $1 million that you bought for $100,000, you would pay capital gains taxes on the $900,000 profit.

    We loves the inflation, Preciouss.

    1. As someone who sold a house bought in the nineties: This, so much this.

  11. I will not sacrifice free enterprise. We’ve made too many compromises already; too many retreats. They invade our bank accounts, and we fall back. They assimilate entire industries, and we fall back. Not again. The line must be drawn here! This far, no further!

    1. +1 who is many

    2. Janeway could have said it better.

      1. Uh, huh. I actually thought that was kind of a weird moment for Picard, given the way his character operated during the series, but Stewart was pretty good in that scene. I wanted to kill the Borg myself.

        1. I was joking but now that I think about it she was way more badass than Picard.

          1. I dunno, sometimes, I guess. Though she did hang out with Chiun.

            1. Oh come on, Picard was always quoting Shakespeare and sipping tea or wine, while Janeway was slinging a laser rifle and cracking skulls.

              1. Well, there are only four lights, you know.

    3. And I will make them pay punitive damages for what they’ve done!

  12. Also, why do some of the taxes “encourage working” such as the family tax credits, but others they are trying to discourage working more.

    #10 on their list is also laughable. Why wouldn’t self-employed people run their income through a business? That is how you protect liability so you don’t go bankrupt after getting sued.

  13. If we *must* have new taxes — tax excess body weight.

    1. “Christie files for bankruptcy”

      /future NY Times headline

  14. You people just don’t get it, do you? We have to do something about all of that mindless austerity.

  15. Goddammit I hate this economic myopia which refuses to understand that money in private hands isn’t sitting around idle in Scrooge McDuck swimming pools, it’s actually being used, same as houses, car, ships, airplanes, factories, roads, everything — and when the government takes it, it’s as destructive as when a civilian thief breaks into a car to steal a $1000 radio which he fences for $100.

    Government theft doesn’t magically turn idle swimming pool money into productive job-creating manna from heaven.

    Fucking economic illiterates and proud of it.

    1. well, there is a matter of the Fed paying interest on excess reserves to the tune of $2T…

  16. 4. EXPAND MIDDLE- AND LOW-INCOME FAMILY TAX CREDITS: The administration’s plan would expand the child tax credit, the earned income tax credit for low-income workers and create a new $500 “second-earner credit.” The new provision is aimed at married couples, particularly those with young children, who may feel it doesn’t make economic sense for both to work. The credit would phase out with income, though couples earning up to $210,000 could claim at least a portion of the break. Other provisions would expand the EITC for childless workers and triple the credit for working families that pay for child care.

    WHAT THE FUCK

  17. in the interest of fairness makes sure to get in a BOOOOOOSH!

  18. “The administration proposes to nearly double taxes on cigarettes and small cigars ..”

    That’s a shocker. You don’t suppose lobbyists and politicians smoke big cigars, do you?

    1. NYC still has cigar bars. Imagine that.

  19. Goddammit.
    fourth try….

    in the interest of fairness makes sure to get in a BOOOOOOSH!

    That spendthrift ignoramus BOOOOOSH deserves every bit of scorn and derision which can be tossed, like flaming bags of dog shit, at him.

    Absent GWB, an incompetent prevaricating buffoon like Obama could never have been dumped in our laps.

    1. Yes, Bush should be cursed for his own badness and for the assist on an even worse president.

  20. “Will raise X billion…”

    Bullshit. Just as government programs always cost more than “projected”, tax increases never bring in the revenue that is promised. They do manage to bring additional distortion to the economy; maybe that’s the true intent.

  21. BOOOOSH can at least claim to be the tallest midget when it comes to spending (as a % of GDP), over the course of his administration.

    As for spending itself, during the George W. Bush years (2001-08), federal outlays averaged 19.6 percent of GDP, a little less than during the Clinton years (1993-2000), at 19.8% and far below Reagan, whose outlays never dropped below 21 percent of GDP in any year and averaged 22.4%. Even factoring in the TARP year (2009), Bush’s average outlays as a proportion of the economy was 20.3 percent ? far below Reagan and only a half-point below Clinton. As for Obama, even excluding 2009, his spending has averaged 24.1 percent of GDP ? the highest level for any three years since World War II.

    Needs updating for more recent Obama spending, but the math is the math.

  22. Obama wants to limit the value of itemized deductions used by the wealthy, such as mortgage interest, to 28 percent of their income.

    What is “wealthy” in this context?

    1. People who have money that they didn’t get from the government?

    2. I’m guessing anyone who is in the 33 percent bracket or above.

      That bracket starts at $186K for single filers and $226K for joint filers.

      1. I’m guessing

        It might be nice to actually know. As a Jew, I hate fiscal imprecision.

    3. Of course, itemized deductions are already limited for higher incomes.

  23. 2. LIMITING ITEMIZED DEDUCTIONS FOR THE WEALTHY: Obama wants to limit the value of itemized deductions used by the wealthy, such as mortgage interest, to 28 percent of their income. As it stands now, a write-off of $1,000 by a person in the top 40 percent bracket saves the taxpayer $400. Under the proposal, that same write-off would save that taxpayer just $280 because the value of the break is capped. Would raise $640 billion….

    That is a bullet aimed right at upper middle class denizens of blue states. Obama defines “wealthy” as making over $250,000 a year. That makes you barely upper middle class in the I 95 Corridor or the better parts of California. And since real estate prices are so high and people in those states pay outrageous state income and property taxes, it would significantly raise the taxes on virtually everyone making over $250K a year in those states. I am guessing at least 60% and probably more of the people who would be most effected by this are loyal Democratic and Obama voters.

    If the Republicans were smart and as nasty as Democrats, they would pass that tax and let Obama sign it leaving the blue state Democrats to take the blame. It is amazing that these people don’t realize how much Obama hates them. It is almost Stockholm Syndrome at this point.

    1. Obama defines “wealthy” as making over $250,000 a year.

      In campaign speeches, sure, but what about in this specific proposal?

      1. The Politico article doesn’t say. But some googling shows that Obama proposed this same idea back in 2013 and

        The proposal would apply only to taxpayers with adjusted gross income (AGI) above $250,000 for married couples and above $200,000 for singles.

        http://ctj.org/ctjreports/2013…..ND-ZSzJ7qk

        I see no reason to think the threshold is any different this time. In fact, Politico’s failure to give the specific threshold and just call it against the “wealthy” whoever they are, is strong evidence it hasn’t. Politico being the dishonest hacks they are, didn’t want to give the actual threshold because making $250,000 a year doesn’t make you wealthy in most people’s minds. So better to just lie and use the word relying on people to assume it means what it says.

        1. “because making $250,000 a year doesn’t make you wealthy in most people’s minds.””

          You’re way off on this one. You probably run with people who think this, but to most people that is a fortune. Plus, you know everything is focus grouped, which is how they came up with the figure.

          1. It may be to someone who lives out west. But no one, not even poor people, who live in the Northeast thinks that.

            And tax the rich has never been a good political tactic. The Democrats have been trying to do it for years and really never had much success. They have just managed to sucker the GOP into making a bunch of people not pay taxes. But compared to the rest of the world, our highest rates really are not that high.

  24. 10. THE GINGRICH-EDWARDS LOOPHOLE: The budget would revive a proposal to prevent individuals from setting up pass-through businesses to avoid paying payroll taxes including Social Security and Medicare. The loophole got its moniker after tax returns showed former presidential candidates Newt Gingrich and John Edwards used it. Current law allows self-employed individuals like lawyers and investment bankers to recharacterize a large portion of their income as business profits rather than a salary. That cuts their taxes, since payroll taxes are currently charged only to wages, not company profits. The White House would limit that maneuver. Would raise over $74 billion.

    In other words, self-employed entrepreneurs get screwed. Gee thanks, Obama. I can see how much you care about helping to create economic growth for the middle class workers. Apparently not at all.

    Why does anyone take Obama seriously? He clearly lies all the damn time. Why do people still act like he is a serious person? Why is he not just ridiculed by all and sundries?

    1. The budget would revive a proposal to prevent individuals from setting up pass-through businesses to avoid paying payroll taxes including Social Security and Medicare.

      I’m no tax lawyer, but isn’t that what the self-employment tax already does, in spades because unlike SocSec, it doesn’t cap out?

    2. Why does anyone take Obama seriously?

      I’m not sure, but I think it has to do with Hope and Change.
      Whether Obama or Axelrod (or whoever) came up with this, it is pure genius. Every person can attach their own hopes to Obama with deep devotion. However, it seems that a day of reckoning must come when they eventually realize that he can’t fulfill the hopes of every individual. I eagerly await that day.

      1. You may be correct. Though I thought after the first four years of Obama nonsense he would have been voted out of office. Yet here we are, two years into his second term, and people still take him seriously. And he keeps getting his way, because apparently the only people dumber than he is are the Republicans in Congress. What the hell?

  25. “The administration’s plan would end the stepped-up basis “loophole,…”

    Am I the only one that hesitates to call anything you have to DIE to use a loophole?

  26. That is just great.. I enjoy vaping and it’s a matter of time the place I buy e-liquid at will be taxed.

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