Friday, February 27, 2009

Some Dems Oppose Obama's Budget

Now this is news to me but there seems to be some Senate Dems against the tax hikes for the wealthy to pay for pennies for the middle class.

Even Senate Budget Committee Chairman Kent Conrad of North Dakota, had misgivings. Conrad said he worried about the budget's long-term outlook, which sees deficits fall until 2013 and then begin to rise again. "I think that requires additional work," he said Friday on CNBC. And he predicted trouble for Obama's plan to limit itemized deductions for individuals earning more than $200,000 and couples earning more than $250,000. "I would put that high on the list of things that will be given a thorough scrubbing and may well not survive," he said.

I think Senator Conrad understands that limiting deductions for the wealthy will result in less charitable donations since they can't write off as much as they could before. Also it will cause even more mortgage woes for the bank as rich people pay off their homes instead of holding a small mortgage for the tax write-off.

Obama needs to understand if you raise the taxes of people making $250k or more he needs to provide a way for them to escape some of the burden. Especially if they are small business owners. According to the nonpartisan Tax Foundation:

Restoring the higher, Clinton-era tax rates on the top two brackets, as Senator Obama and some Congressional leaders have proposed, increasing the 33 and 35 percent rates to 36 and 39.6 percent, respectively, would raise taxes on 45 to 55 percent of small business income, according to a new Tax Foundation study.

So raising taxes on these people will just resort in them cutting job creation or passing that tax burden on to the consumer. That means that soaking the rich isn't a good idea if you want them to boost the employment and create more jobs.

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