President Obama's proposed 2013 budget is asking a lot of the rich -- specifically, $1.4 trillion in new tax burdens.
The $3.8 trillion budget proposal includes higher tax rates for couples making at least $250,000 and individuals earning at least $200,000. Dividends for these Americans would be taxed as ordinary income -- a whopping increase from the current 15 percent to 39.6 percent for those in the top income tax bracket. Prior to 2003, dividends were taxed as ordinary income.
The current top income tax bracket is 35 percent but would revert to 39.6 percent under the proposal, which would end the Bush-era tax cuts. Capital gains tax would increase from 15 percent to 20 percent.
The administration claims the increased dividend tax would raise $206.4 billion over the next decade. Supporters maintain that the increased taxes on the wealthy will help spur the economy and control the deficit. Republicans are opposed, saying senior citizens will be hurt in retirement, and the plan will not improve the economy.
Obama is leveraging one of the best-known billionaire names in his proposal, Warren Buffett. In what's being called the "Buffett rule," he's replacing the alternative minimum tax with a 30-percent minimum tax on those earning $1 million or more. Last year, Buffett wrote an op-ed article in the New York Times in which he maintained that the rich aren't paying enough taxes.
Do you think Obama's proposal imposes a too-heavy tax burden on the rich?
Read more details on the proposal in this Bankrate article.
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