(Part 4 of a 7 part series)
Barack Obama's Plan for America: Taxes
The plan laid out by President Obama includes continued tax cuts for middle class families and small businesses. His plan calls for extending tax breaks that are currently in place for the middle class and eliminating tax cuts that are in place to the top wage-earners. His plan also calls for shielding the “working poor” and prevent them from seeing any additional tax burden.
Tax Cuts for the Middle Class
Obama has tried to offer tax payers a clearer picture of taxes, including where their tax dollars are spent. Beginning in 2011, American tax payers are now able to go online and see how their tax dollars are spent. This opportunity offers tax payers the chance to get a clearer picture of where their money is spent. The American Recovery and Reinvestment Act of 2009, signed into law shortly after Obama took office, offered tax cuts to middle class families. The president has cut taxes for 160 million working Americans.
In order to balance the budget and lower the deficit, the president’s plan also calls for increases on high income tax payers, otherwise known as “The Buffet Rule." This plan states that millionaires pay a lower effective tax rates than the working class and the president wants to correct this issue immediately.
The president has asked Congress to extend the tax cuts that are set to expire in 2012, which gave a family earning $50,000 per year a tax cut totaling $3,600. The Senate has passed the extension so that 98 percent of American taxpayers will not see an increase on their tax bill. The Republican dominated House of Representatives is refusing to approve the extension to middle class families unless tax cuts to the wage earners paying taxes on earnings higher than $250,000 (those with incomes over $800,000 would be even higher) are extended as well. The Republican proposal would also take away the child tax credit from 5 million families, causing their taxes to increase by an average of $500. The Republican plan would also eliminate the American Opportunity Tax Credit, which will cause 11 million families and students paying for college expenses to see an average increase of $1,000.
Tax Cuts for Small Business
Small businesses are the backbone of America. The President has signed 18 tax cuts for small businesses. The intention of the tax cuts is to allow small businesses to hire new employees, provide affordable health insurance and make capital investments. The president has called for a $3,000 tax credit to small businesses for each new employee they hire.
Closing the Loopholes
The president is calling for Congress to close the tax loopholes currently being used by the highest level of tax payers. Due to the high level of complexity in the current tax code, only people who can afford to pay for the advice on how to take advantages of weaknesses in the tax code are able to benefit from flaws in the code. Obama’s plan calls for eliminating special tax breaks for oil and gas companies, closing loopholes used by investment fund managers and eliminating benefits realized by corporate jet owners.
The president is working very hard to level the playing field for hard-working Americans. He has offered many provisions that will grant tax breaks for America’s middle class. He plans to raise the taxes paid by the highest earning Americans and shift the load from the middle class and working poor.
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Additional articles in this series:
Analysis of President Obama’s plan (summary)