Senate Democrats push through Obama’s tax hike plan

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Despite warnings that President Barack Obama’s tax plan, which would raise taxes on families making more than $250,000 a year, could have a severely negative impact on the economy, Democrats pushed the bill through the Senate yesterday afternoon:

Senate Democrats on Wednesday narrowly passed President Obama’s plan that would extend Bush-era tax rates for family income up to $250,000 a year.
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By a 51-48 tally, Democrats overcame two defections to win passage of the measure, which would also raise the top rate on capital gains and dividends, as well as continue several targeted tax provisions that Democrats say help the middle class.

Earlier in the afternoon, the Senate turned aside a Republican proposal, by a mostly party-line vote of 45-54, that would have extended all current rates on income, capital gains, dividends and the estate tax, also for a year. Two Republicans, Sens. Susan Collins (Maine) and Scott Brown (Mass.), voted against both plans, and Sen. Mark Pryor (D-Ark.) voted against for the two proposals. Pryor is up for reelection in 2014.

The dramatic roll calls came as Vice President Biden presided over the tally. He was in the chamber in case his vote, as president of the Senate, was needed to break a tie.

If you’re interested in seeing how your Senators voted, you can see the roll call for the GOP proposal here and the Democratic version, which passed, here. President Obama’s plan has no chance of clearing the Republican-controlled House, which will soon pass a one-year extension of all current tax rates.

As has been noted recently, these tax hikes will likely have a negative impact on the economy. Citigroup showed a 2.9% contraction in the economy as a result of President Obama’s tax hike proposal. And Ernst and Young shows that Obama’s plan is a jobs killer, which wouldn’t be much better than letting all tax cuts expire — a worse-case scenario that would lead to a recession, according to the Congressional Budget Office.

Unfortunately, President Obama and Senate Democrats are ignoring the fact that higher-income earners, those targeted by their tax hike, already pay 69.1% of all income taxes paid; not to mention that the revenues expected are only a drop in the bucket compared to the spending anticipated in the next 10 years.

There are four months to go until these tax hikes go into a effect, but we’re already paying the price of the political games being played by President Obama and Senate Democrats.


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