President Obama's Brand New Tax Plan That's a Year Old
Back in 2011, when President Obama was negotiating with John Boehner over extension of the debt ceiling, he offered up a deal that included $800 billion in tax increases (over ten years). While Boehner was waffling, a bipartisan committee produced a deal that would raise taxes by $1.2 trillion. Obama went back to Boehner and said he couldn't stick with the old deal when a bunch of Republicans had already agreed to $1.2 trillion, so that was his new offer. Boehner turned him down and talks collapsed.
Now a year and a half has passed and Obama just won reelection. So what's his offer now? $1.6 trillion over ten years. Take that, Republicans! The reaction from liberals has been generally positive: they're impressed that Obama is opening with a strong hand and upping the ante now that he has a mandate from the public.
But there's really no news here. Obama's proposal is the same one he campaigned on. A brief description is here, and a more detailed description from the Tax Policy Center is here. Here are the big ticket items:
- Allow the Bush tax cuts on high earners to expire. $849 billion
- Limit itemized deductions to 28 percent, close some loopholes and deductions on high earners, eliminate tax breaks for oil and gas companies, eliminate the carried interest loophole, plus a few other items. $584 billion
- Create a special "Buffett Rule" tax rate for millionaires. $47 billion
- Restore the estate tax to 2009 levels. $143 billion
- Limit corporate income shifting to low-tax countries. $148 billion
- Other miscellaneous tax increases and reductions. About -$200 billion
- Total: $1.6 trillion
Bottom line: there's nothing special about this proposal. It's pretty much the same as the one in his 2013 budget, and it's pretty much the same one he's been running on for the past year. It surely didn't come as any surprise to Boehner or the rest of the Republican caucus, and it shouldn't be a surprise to anyone else either.