Obama’s Deficit Plan – Whose Class Warfare Is it?

Obama’s Deficit Plan – Whose Class Warfare Is It?

It’s no surprise that the Republican leadership has their Calvin’s in a bunch over President Obama’s new deficit reduction plan. By golly, it has a provision in it that would call for an increase in taxes on a specific economic class in America. That is simply Un-American.

Of course we’re referring to the poor rich people who would be forced to pay more in potentially a few different ways. First, Obama is suggesting that we follow one of Bush’s plans to completion (sort of) and let his ridiculous tax cuts finally expire like they were supposed to long ago. However, Obama would only repeal the cuts on couples making more than $250,000. Second, Obama would also place limits on deductions for wealthy filers. Third, he wants to end certain corporate loopholes and subsidies for oil and gas companies.

But probably the most interesting and perhaps the most controversial of all the ideas is one proposed by the “Oracle of Omaha,” Warren Buffett. Go figure, it’s called the “Buffett Rule” and it stems from the issue that Warren Buffett is upset that he and his fellow million- and billionaires generally speaking do not pay as much in taxes as most middle income filers.

Why, you ask? Good question. As CBS News explains:

At issue is the difference between a taxpayer’s tax bracket and the effective tax rate that taxpayer pays. Millionaires face a 35 percent tax bracket, while middle income filers fall in the 15 or 25 percent bracket. But investment income is taxed at 15 percent and Buffett has complained that he and other wealthy people have been “coddled long enough” and shouldn’t be paying a smaller share of their income in federal taxes than middle-class taxpayers.

In other words, many millionaires and billionaires live off of investment income. They don’t receive a paycheck or salary; instead they “pay” themselves with earnings off of their investments (i.e. capital gains, qualified dividends). The tax bracket for investment income is only 15%. That’s the low end of the tax bracket for the middle income filers.

Buffett believes this is way too low and Obama agrees. Therefore, one of Obama’s proposals is reported to set a minimum tax on taxpayers making $1 million or more in income which would create a new tax bracket.

The Republicans are calling this “class warfare.”

“He’s in a political class warfare mode and campaign mode. And that’s not good for our economy,” said Paul Ryan on Fox News Sunday.

“Pitting one group of Americans against another is not leadership,” John Boehner reiterated in a written statement. “This administration’s insistence on raising taxes on job creators and its reluctance to take the steps necessary to strengthen our entitlement programs are the reasons the president and I were not able to reach an agreement previously, and it is evident today that these barriers remain.”

FLASHBAAAAACK!!! (Wavy hands, doodly fingers!) Doodly-doo… doodly-doo… doodly-doo… doodly-doo… doodly-doo…

Just last week House Speaker John Boehner, Majority Leader Eric Cantor and other leaders wrote a letter to other House Republicans explaining their objection to President Barack Obama’s plan to cut payroll taxes/extend the current payroll tax cut to stimulate job growth. Yes, you heard right! Republicans said “NO!” to a TAX CUT!

WTF, you ask? Good question. We have no f***ing idea but we’re going to take a wild guess at to the Republican explanation:

It’s only class warfare when you “raise taxes” on the millionaires and billionaires. When you “raise” them on the working class it’s just “good economic policy.”