Finance

Finance

Obama proposes doubling Romney’s taxes, with minimum 30% rate

25 January 2012 12:24 (UTC +04:00)

Baku - APA-Economics. President Barack Obama tonight called for millionaires to pay an effective minimum tax rate of at least 30%, more than twice the rate Republican Presidential Candidate Mitt Romneyâ€™s tax returns show he paid in 2010 on an income of nearly $22 million, Forbes reported.

In a State of the Union Speech that served mainly as a preview of his populist reelection campaign themes, Obama laid out a â€œblueprint for an economy thatâ€™s built to lastâ€ including tougher enforcement against unfair trade practices by countries like China; stepped up spending on roads and alternative energy; expanded domestic oil and gas production; a doubling of work study grants for college students; a new tax credit for manufacturers who bring jobs home; a minimum tax on the profits that companies earn manufacturing overseas; tax relief for small business; and a new fee on big banks to help cover the cost of helping some Americans refinance their mortgages at todayâ€™s low rates.

To reach the effective 30% rate, Obama called on Congress to eliminate tax deductions millionaires can now claim for mortgages, retirement, health care and child care, but not for charitable contributions. In an eight page blueprint document, the White House said it will â€œwork to ensure that this (Buffett) rule is implemented in a way that is equitable, including not disadvantaging individuals who make large charitable contributions.â€ Neither Obama nor the document made any explicit mention of the 15% rate on long term capital gains and dividends, which accounts for the low rate rich investors like Romney and Buffett now pay. Obama has called for allowing that rate to rise to 20% when the Bush tax cuts expire at the end of this year. In addition, as part of the financing plan for Obamaâ€™s health plan, an additional 3.8% Medicare â€œsurchargeâ€ will be imposed next year on investment income for couples earning more than $250,000. Obama did not say whether he would favor even further increases in the capital gains rate to make sure investors really paid 30%.

Obama again repeated his pledge to reduce the deficit without raising taxes on the 98% of American families earning less than $250,000 and made an impassioned pitch for Congress to pass one of the few items on his tax wish list that has a chance of becoming law this yearâ€”an extension, for the rest of 2012, of the temporary Social Security payroll tax cut now scheduled to expire at the end of February.