President Obama is set to unveil a bold new $1.5 trillion tax proposal that takes aim at the super-rich and attempts to tackle the nation’s rising debt and manage the long-term deficit.
The president’s proposal would combine new taxes with $580 billion in cuts to benefit programs — including a $248 billion cut in Medicare, and $72 billion in Medicaid and other health programs. The strategy includes $430 billion in savings from lower interest payments on the national debt. Under the plan, the U.S. would see a $2 trillion deficit reduction over 10 years.
The plan is an economic bookend to the $447 billion in tax cuts and new public works spending that Obama has proposed as a short-term measure to stimulate the economy and create jobs, writes the Associated Press. Obama has been under mounting pressure to sort out the unemployment situation, which continues to climb for Blacks. In August, the African-American jobless rate climbed from 15.9 to 16.7 and the overall jobless rate remained steady at 9.1 percent. (See more on The American Jobs Act)
However, speaking on Sunday, administration officials made it clear that Obama would not allow any Medicare benefit cuts without complimentary tax increases on the wealthy. Millionaires may see a minimum tax on those earning $1 million or more in income. Called the "Buffett Rule" (named after billionaire investor Warren Buffett), the minimum tax is designed to prevent the super wealthy from taking advantage of lower tax rates on investment earnings. The proposal will also affect wealthy Americans by its repeal of Bush-era tax rates for couples taking home more than $250,000 a year, would place deduction limits for some filers and certain corporate loopholes and subsidies for oil and gas companies would also end under the plan.
Ahead of the official announcement, the plan is already catching flack from GOP members who are calling the plan “class warfare.”
In addition to the taxes and benefit cuts, the administration also plans to save $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.
(Photo: AP/Carolyn Kaster)