Jump to content

Obama's 2011 Budget Tax Hikes Contradict Focus on Job Creation

Mr. T

Recommended Posts

Obama's 2011 Budget Tax Hikes Contradict Focus on Job Creation


President Obama has said his number one goal for 2010 is to create jobs, but the abundance of tax increases in his recently released 2011 budget contradict this objective. Higher taxes on businesses, upper-income taxpayers, and fossil fuels; an increased death tax; and new taxes to pay for health care would destroy jobs and slow economic recovery. Congress should reject these higher taxes and the rest of its business-killing agenda to speed economic growth and encourage job creation.


President Obama's 2011 budget calls for $2 trillion in higher taxes over 10 years--after accounting for the $154 billion in tax cuts called for in the budget. This would be a $17,000 tax increase for every American household during that span. This figure does not include possible revenue from the cap-and-trade legislation currently before Congress.


The budget claims additional tax cuts, such as the Making Work Pay credit for 2011 and 2012, the research and experimentation credit, and bonus depreciation for certain assets. Each of these provisions is an extension of current policy and should not count as an additional tax cut. The tax increases proposed in the budget break down into six broad categories:


1. Higher Taxes on Businesses. The higher taxes on businesses include the recently proposed "bank tax" that is supposed to recapture the money lent to big banks as part of the TARP program--even though most of the banks hit by the tax have already paid back the funds they received.[2] The Obama budget would also repeal the "last in, first out" method of inventory accounting that allows businesses to deduct their more costly inventory from income first. This would increase taxes for many businesses.


The most damaging tax increase on businesses, however, would be the higher levies on businesses operating internationally. The budget would restrict their ability to deduct interest expenses associated with foreign income until the business recognizes it in the U.S. The budget would also make it more difficult for businesses operating internationally to claim a credit for taxes paid in foreign countries, increasing the likelihood of double taxation.


2. Higher Taxes on Upper-Income Earners. President Obama's 2011 budget would allow the 2001 and 2003 tax cuts to expire for families making over $250,000 a year and raise their top two marginal tax rates from 33 and 35 percent to 36 and 39.6 percent, respectively. The budget would also limit the amount these families could deduct from their income and reduce their personal exemptions. President Obama also proposes raising the tax rates on dividends and capital gains from 15 percent to 20 percent for taxpayers



3. Death Tax Increase


4. Higher Energy Taxes.


5. Health Care Taxes


6. Other Taxes. The budget includes several other tax increases, including taxing carried interest as regular income, closing the tax gap through stricter enforcement, more taxes on businesses, and making the unemployment insurance surtax permanent.


President Obama has said repeatedly that job creation is his number one priority in 2010. But if Congress passes the tax hikes included in the budget into law, countless jobs will be destroyed.


Get the Full story here

Link to comment
Share on other sites


This topic is now archived and is closed to further replies.

  • Create New...