President Barack Obama presented his budget for fiscal 2010, including about $318 billion in tax increases mainly targeted at the wealthy. Capital gains will be taxed at 20% for taxpayers whose adjusted gross income is more than $250,000.
http://www.cnn.com/video/#/video/podcasts/ac360/site/2009/02/26/cooper.podcast.wednesday.cnn
CNN's Anderson Cooper has a very good analysis of the new Democratic budget proposal, increasing discretionary expenditures by some 8%, with over 8,000 pork projects.
http://www.mercurynews.com/news/ci_11788298
Administration officials said the president would propose to reduce the value of itemized tax deductions for everyone in the top income tax bracket of 35 percent and many of those in the 33 percent bracket — roughly speaking, starting at $250,000 in annual income for a married couple.
Under existing law, the tax benefit of itemizing deductions rises with a taxpayer's marginal tax bracket (the bracket that applies to the last dollar of income). For example, $10,000 in itemized deductions reduces tax liability by $3,500 for someone in the 35 percent bracket.
Obama would allow a saving of only $2,800 — as if the person were in the 28 percent bracket. A White House official said it's unfair for high-income people to get a bigger tax break than middle-income people for claiming the same deductions or making the same charitable contributions.
http://online.wsj.com/article/SB123561551065378405.html
Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions.
Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.
Note that federal income taxes are already "progressive" with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He'd also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won't come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.
