Obama’s Budget Blueprint Targets the Rich
The White House released detail on Wednesday of President Obama’s 2014 budget blueprint, in which he outlines his plans to make high earners pay more to reduce the deficit, as well as new spending cuts to replace the temporary ‘sequester’ reductions which were brought in last month.
If the President were to get his way then US taxpayers earning over $1 million per year would be required to pay at least 30% of their income in taxes. He would also introduce a 28% cap on the tax deductions allowed to high earners. In combination with a tranche of spending cuts, this would allow the US to bring its budget deficit down to 2.8% of GDP by 2016, according the white house estimates. This stands in contrast to the 5.3% of GDP which the Congressional Budget Office has predicted for this year’s deficit.
Other notable inclusions in Obama’s budget proposal include a 10% tax credit for small business which hire new workers or raise wages for existing staff, and additional spending on infrastructure and early childhood education. The President has also chosen to adopt a more conservative measure of inflation to calculate cost of living for recipients of federal welfare programs, which would result in reduced benefit levels – this seems to be a compromise gesture to win greater support from the Republican opposition, but it is sure to be unpopular with many of his supporters….