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Obama to Propose ‘Buffett Tax’ on Monday; Update: $1.5 Trillion in New Taxes — ‘This is Not Class Warfare, It’s Math’

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By Doug Powers  •  September 18, 2011 09:50 AM

**Written by Doug Powers

No, not a “buffet tax” — that might come later as a “Let’s Move” initiative. This proposal will be a “Buffett tax” — as in Warren Buffett — who has called for the rich to pay a higher tax rate with plugged-up loopholes in an attempt to sacrifice even more money to Washington’s spending addiction:

(Reuters) – President Barack Obama, in a populist step designed to appeal to voters, will propose a “Buffett Tax” on people making more than $1 million a year as part of his deficit recommendations to Congress on Monday.

Such a proposal, among suggestions to a congressional supercommittee expected to seek up to $3 trillion in deficit savings over 10 years, would appeal to his Democratic base ahead of the 2012 election but likely not raise much in revenues.
[…]
Obama will lay out his recommendations in White House Rose Garden remarks at 10.30 a.m. (1430 GMT) on Monday and is expected to urge steps to raise tax revenue as well as cuts in spending.

Now Obama will be able to add “pass these tax increases” to the “pass this jobs bill” broken record so as to mix it up a bit.

But at least the “Patriotic Millionaires” might be about to get what they asked for, so there’s that little bit of economic schadenfreude. Just don’t get caught up in the stampede as they run to their accountants tomorrow to plan a way around these proposed new taxes they’ve been lobbying for.

It’s often been pointed out that Washington has a spending problem, not a revenue problem — and proposing something that might just chase more of America’s wealth overseas is the last thing we need, especially in this economy. Chances are Obama knows this won’t go anywhere, much like the jobs bill the tax increases would supposedly pay for, but the “Buffett rule” will be one more thing he can tell his diminishing base that he “tried” to do that Republicans blocked.

Update, Monday 1 p.m.: President Obama finished outlining his proposal a little while ago. Here’s the big picture:

In a blunt rejoinder to congressional Republicans, President Barack Obama called for $1.5 trillion in new taxes Monday, part of a total 10-year deficit reduction package totaling more than $3 trillion. He vowed to veto any deficit reduction package that cuts benefits to Medicare recipients but does not raise taxes on the wealthy and big corporations.

“We can’t just cut our way out of this hole,” the president said.

The president’s proposal would predominantly hit upper income taxpayers but would also reduce spending in mandatory benefit programs, including Medicare and Medicaid, by $580 billion. It also counts savings of $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.

Obama added, “This is not class warfare — it’s math!”

For just a few examples of why I don’t exactly trust this administration’s math skills, see here and here and here and here and here and here.

Nancy Pelosi called the plan “bold,” which means it’ll cost a fortune and then some.

Update II: Here’s a reminder for President Obama: The last thing you want to do is raise taxes during a recession (even on the wealthy).

That’s advice Obama should heed. Why? Because he said it:

**Written by Doug Powers

Twitter @ThePowersThatBe

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Categories: Barack Obama, Health care, New York Times, Paul Krugman