Almost 1 1/2 years into Barack Obama's pres- idency, we're still waiting for that mid-dle-class tax cut that he promised during the campaign. "Here's what I can tell the American people: 95 percent of you will get a tax cut," Mr. Obama said in the first presidential debate. "And if you make less than $250,000, less than a quarter-million dollars a year, then you will not see one dime's worth of tax increase."
To highlight the difference between the candidate's words and the president's actions, Americans for Tax Reform this week released an "Obama tax hike exemption card." The bearer of this card supposedly can present it to any authorities that try to collect on new taxes imposed under the Obama administration. The list of these taxes grows longer by the day.
A number of the levies can be found in the recently passed Obamacare legislation. Beginning Jan. 1, for example, the "medicine cabinet tax" kicks in to prohibit the use of pre-tax dollars for the purchase of over-the-counter medicines with health savings accounts, flexible spending accounts or health reimbursement accounts. Users of all sorts of medical devices from prosthetic limbs and pacemakers to bedpans can expect to pay more. Thousands of new Internal Revenue Service agents will be hired to enforce Obamacare's tax on individuals who fail to buy health insurance.
Other taxes are going to go up, but we will have to wait until the end of the year to see by how much. The president's fiscal 2011 budget assumes that many of the George W. Bush tax cuts will expire in December. According to the Tax Foundation, the median family of four saved $2,200 in taxes each year under those provisions. Administration proposals suggest that, at a minimum, dividends will be taxed as long-term capital gains, the death tax will return, and the 33 percent tax bracket will rise to 36 percent. Although it sounds at first like these changes might only hurt "the rich," they affect family businesses, farmers and others making less than $250,000.
Mr. Obama's other proposals clearly would affect everyone, regardless of income. The president's budget initially estimated that his cap-and-trade taxes on energy would generate $646 billion in revenue over the next 10 years. The impact on families would be around $3,100 per year, on average. Combine that with other ideas the administration is exploring, such as the possibility of imposing new taxes on sodas and sugary snacks in the name of reducing childhood obesity. "Obviously there is resistance on Capitol Hill to those kinds of sin taxes," Mr. Obama told Men's Health Magazine. "It is true, though, that if you wanted to make a big impact on people's health in this country, reducing things like soda consumption would be helpful."
While the tax-exemption card is being produced in jest, the administration's proposed taxes are very real and definitely not funny.
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