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Obama socking it to the rich?

By Judy Martel · Bankrate.com
Tuesday, February 14, 2012
Posted: 5 pm ET

President Obama's proposed 2013 budget is asking a lot of the rich -- specifically, $1.4 trillion in new tax burdens.

Uncle Sam wants you income.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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6 Comments
Dmitry
February 17, 2012 at 5:13 pm

I support this even though it most likely will affect me in the worst possible case - our combined income will (if everything goes as it does now) barely exceed the threshold, with significant part of it being dividends. But we'll manage.

As for republican claims "senior citizens will be hurt in retirement" - senior citizens in or near retirement with income levels affected by this proposal do not know the meaning of financial "hurt".

Personally, I believe that people making 6-7-(or more figures) from investments are unfairly excepted from paying their fair share. Lower rate was supposed to encourage savings among all those layers of middle class, but instead resulted in tax evasion by the likes of Mitt Romney and hedge fund managers.

And even if "the plan will not improve the economy" it's not going to make it worse either - those money just make pockets deeper, not spent on hiring workers.

And it this plan somehow will survive and make it into the bill (I will not hold my breath) our president will be assassinated before he get's a chance to sign it. It would take an act of GOD to have republican and his money parted. Even if they are made unfairly.

Harry
February 15, 2012 at 1:03 pm

We've been living on free lunches since WW2 and the president's doing what we elected him to do. Survive! That's what we do, right? In any event we shall see what we can get away with in 2012.

Homeless
February 15, 2012 at 12:22 pm

What's left out is that this does nothing to clear the debt and is actually going to be used for another 1.4trillion in SPENDING!

First, of...marriage penalty again. An individual making 200k, but a couple that makes 250K...generally, that hits the small business owners most.

Second, Warren Buffet has so many tax loopholes that he never PERSONALLY reports a million dollar salary...and Warren Buffet knows that. All of his money flows through different corporations and loopholes (allowed by the tax code) that someone that can afford to hundreds of thousands in tax compliance staff can afford to find. The hardest hit will be small businesses and yes, those that use dividends to help fund their retirement...that man is an idiot!

Deadpool
February 15, 2012 at 12:11 pm

You can tell it's election year.
It sounds all nice and pretty, but it'll never happen.

Dave McReynolds
February 15, 2012 at 10:12 am

While I have nothing to worry about on this announcement (don't make anywhere near $200,000), this is nothing more than Obama pandering to his core base. Anyone with an IQ over 65 realizes this will do nothing to address our huge government debt. Just election year politicing and the usual class warfare game democrats love to play.

What needs to happen to realize real deficit reduction, politicians in Washington don't have the guts to do and that's real spending cuts.

John
February 15, 2012 at 10:06 am

I totally support The President on this issue.