WASHINGTON D.C.—President Obama’s 2013 budget plan calls for a hike in the dividend tax rate from the current 15% it is now to a higher personal income tax rate of 39.6%. Once deductions and exemptions that are being phased out are factored in, the new tax rate would be 44.8%, according to the Wall Street Journal.
Those that will be hurt the most are retirees and seniors who depend on dividends as part of their retirement income. Over half of the people over 65 depend on dividend income, and nearly three-quarters of retirees over 55 depend on dividends to live on.
Obama, of course, draws that magic $200,000 figure for individuals and $250,000 for couples as the line from which these increases will apply. But as we have seen in previous legislation, these magical figures are arbitrary and subject to change at the whims of this administration.
The president’s budget says it will achieve $1.5 trillion of deficit reductions with tax increases on the “wealthy” and by removing certain corporate tax breaks. In an economy that is floundering under higher fuel costs and high unemployment rates, increasing taxes on those able to stimulate the economy seems ludicrous at best. His statement that the payroll tax cut will help Americans buy a tank of gas shows just how out of touch with mainstream America this administration is.
His budget also calls for the permanent elimination of the Bush-era tax cuts.
According to Congressman Lynn Westmoreland (R-GA), the president’s budget is dangerous, fiscally unsound, and detrimental to seniors. “If we followed the president’s ten year budget proposal submitted to Congress today, our country would be $25.9 trillion in debt by the end of FY 2022,” Westmoreland said.
In addition, this budget addresses none of the concerns with the financial instability of Medicare and Social Security, leaving these programs to flounder into bankruptcy and the possibility that seniors will see drastic reductions in benefits, or benefit payments stopping altogether.
This budget proposal just adds bits and pieces to an already behemoth tax code with no serious overhaul of an onerous tax code that is patently unfair to middle America. It leaves retirees and seniors to the wolves, increases funding to the Justice Department, the Department of Housing and Urban Development, the Energy Department, the Education Department, the Labor Department, the National Science Foundation, the State Department, and last but not least, the Transportation Department. The Treasury Department alone gets a 7% increase.
While Obama is boosting federal pay, the American workforce remains on life support. While businesses are being loaded with even more taxes, government spending in those areas that have cost the taxpayers billions of dollars increase.
If President Obama was serious about slashing the national debt and reigning in the budget, the first thing he would do would be to fire his board of economic advisors.