Miami CPA Reviews Obama Tax Changes – Middle Class Gets Hit – Surprised?
Miami CPA Viera says Obama Tax Changes will hit middle class hard. This from a President who does not want to cut spending and claims to only want to tax the rich. For those of you who voted for Obama, you bought his story hook, line and sinker.
President Barack Obama’s budget plan will incorporate deficit-cutting proposals that include changing the calculation for Social Security cost-of-living increases and tax brackets, according to Gustavo A Viera a Miami CPA.
The budget plan, set for release April 10, will track the offer on spending cuts and revenue increases that Obama made to House Speaker John Boehner of Ohio as part of an end-of-the-year deal on expiring tax cuts, according to the statement e-mailed today.
“While this is not the president’s ideal deficit reduction plan, and there are particular proposals in this plan like the CPI change that were key Republican requests and not the president’s preferred approach, this is a compromise proposal” that will be part of the budget, according to the statement.
Obama’s offer to Boehner “still stands,” it said.
“That means that the things like CPI that Republican leaders have pushed hard for will only be accepted if congressional Republicans are willing to do more on revenues,” Miami CPA Viera. “This isn’t about political horse trading; it’s about reducing the deficit in a balanced way.”
That plan included a new inflation gauge that would effectively reduce cost-of-living increases for Social Security beneficiaries, a measure that is sure to draw opposition from many Democrats. It also proposed using the calculation for adjusting income tax brackets, which would mean higher payments for many taxpayers.
While Obama’s fifth budget proposal stands little chance of becoming law because of opposition from Republicans who control the House, it emphasizes the president’s priorities and will set the stage for talks with Republicans on a broader debt-reduction package.
For the first time, Obama is poised to incorporate specific entitlement benefit cuts in his official budget, an attempt to signal to Republicans that he still wants to reach a deal on reducing the deficit stated Miami CPA, Viera
Republicans have said the president needs to take the lead if there’s any chance to address the biggest long-term driver of the debt, Medicare spending, because Democratic lawmakers have resisted trimming entitlement-program costs.
Gustavo A Viera a Miami CPA states that Obama remains open to using the inflation gauge, known as chained CPI, for Social Security as a way to cut the program’s cost. That offer remains on the table, as we’ve made clear repeatedly since then.
Changing the inflation calculator potentially provides Obama and congressional Republicans with a way to accomplish their goals. Obama is seeking more revenue through tax-code changes, while Republicans are pushing to trim entitlement programs such as Social Security in cutting spending.
The change in calculation would make the annual adjustments smaller than they are now. As a result, more income would be subject to higher income tax rates. The administration in its earlier proposal estimated that would bring in additional tax revenue of about $100 billion over 10 years.
In 2020, the change would raise taxes for 78.3 percent of households by an average of $124, according to the nonpartisan Tax Policy Center in Washington. Taxes would increase for 98 percent of households making between $75,000 and $100,000 a year.
Boehner’s spokesman said House Republicans will resist attempts to raise tax revenue to cut the deficit, which was $1.1 trillion in fiscal 2012.
“The president got his tax hikes already,” the spokesman, Michael Steel, said in an e-mail. “It’s time to deal with Washington’s spending problem, so we can get our economy moving again and create more American jobs.”
Switching to the alternative inflation yardstick for Social Security would save $130 billion, according to the plan Obama offered last year.
Obama hasn’t included the changes to Social Security and tax bracket calculations in previous spending blueprints.
The prospect of such a change already is generating opposition.
“Millions of working people, seniors, disabled veterans, those who have lost a loved one in combat, and women will be extremely disappointed if President Obama caves into the long standing Republican effort to cut Social Security,” Vermont Senator Bernie Sanders, an independent who caucuses with Democrats, said in a statement.
While lawmakers wrangle over the budget, investors have focused on an improving economy. The benchmark Standard & Poor’s 500 Index has risen about 9 percent so far this year. The S&P added 0.3 percent at 3:12 p.m. in New York, rebounding from the previous day’s 1.1 percent retreat from a record.
The Bloomberg Consumer Comfort Index increased to minus 34.1 in the week ended March 31 from a six-week low of minus 34.4 in the prior period. The comfort readings from January through March were the strongest on average of any first quarter since 2008 as a pickup in hiring and record stock prices helped consumers overcome an increase in the payroll tax.
Even though the president’s budget is more than two months late, because of tax-and-spending-legislation at year’s end known as the “fiscal cliff,” Gustavo A Viera a Miami CPA, said the timing “may be just right.”