President Obama’s new deficit proposal includes $1.5 trillion in new tax revenue — nearly half of the plan’s $3.6 trillion deficit reduction target.
So what’s in it?
Most of the $1.5 trillion comes from policies Obama has proposed before. Letting the Bush tax rates for the top two income brackets expire nets about $800 billion. The rest comes from ending myriad tax preferences that benefit wealthy Americans and businesses. This includes a plan he unveiled several days ago that would pay for his new jobs bill — if the Super Committee can’t find extra savings on its own — that would limit the amount high-income earners can deduct from their tax filings. And, of course, it would end loopholes benefiting wealthy corporations.
The biggest unknown about the plan surrounds the new so-called “Buffett rule” — a new Alternative Minimum Tax of sorts that would become required of people making over $1 million a year to make sure they pay at least the same percentage of their earnings as lower and middle class tax payers. Details there are scarce: What will the proposed rate be? Will it be indexed in a way that Congress won’t continually “patch” it to make sure middle class people don’t eventually become ensnared by it? How much is it projected to reduce the deficit?
Despite lacking full details, and after instituting decades of tax policy aimed at mollifying rich Americans and businesses, Republicans are already dismissing this plan as “class warfare.” We’ll find out what those missing details are, though, when the plan is officially unveiled Monday.
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