President Obama wants to adopt an idea put forth by Warren Buffet to raise tax revenue. The Buffet rule, as it is called, would target the wealthiest Americans for more taxes.
The White House is also proposing a higher tax on the oil and gas industry, fund managers and private estates. At the same time he would let the tax cuts to the wealthy from the Bush years expire. A further measure would raise dividend taxes on wealthy investors to the same level as ordinary income tax.
These tax proposals are part of his overall budget plan, which sets the stage for another fiscal clash with congress after the November elections.
Obama wants to replace the Alternative Minimum Tax with the Buffet Rule, which would tax income over $1,000,000 at 30%. The AMT is having unintended consequences on middle class Americans, because it was never indexed to inflation and the thresholds have not increased enough to keep middle income people from being effected. Congress has approached the issue with some patch work legislation that only makes the tax code more complex.
The Buffet rule has not gotten a favorable reaction in Congress, and with the presidential campaign gearing up, taxes are going to be a politically charged issue for 2012. Congress is already at a standstill on deficit reduction and a lame-duck session of Congress later this year will only make it harder.
With a weak economy, an election year and a lame duck congress the president has a tough battle ahead of him on 2012 taxes.
- Review For TurboTax 2011 (2012tax.org)
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Budget Seeks To Boost Tax Revenue by Steve