WASHINGTON--On Day Two of domestic policy week, White House hopeful Sen. Barack Obama (D-Ill.) on Tuesday is calling for a variety of income tax cuts and making it simpler to file taxes. Congress has been flirting with income tax simplification for years but the forms are still unfathomable to many. Obama is offering a great deal for lower income seniors--a powerful politiical bloc because a high percentage of them vote. He wants to exempt seniors making below $50,000 from paying any income tax.
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Obama to Announce Major Middle Class Tax Relief Plan
Excerpts Provided Below
Washington, DC – U.S. Senator Barack Obama plans to announce a bold and innovative plan to reform America’s tax code so that it works for the middle class in a speech to the Tax Policy Center today in Washington, DC. Obama’s plan would provide a substantial tax cut for nearly all working Americans, for homeowners, and for low- and middle-income seniors.
Obama will make the case that our current tax code reflects the wrong priorities, by rewarding wealth instead of work and pledge to restore fairness to the tax code to strengthen the American economy.
Obama’s middle class tax relief plan would provide $80-85 billion in tax cuts to America’s workers, seniors and homeowners by:
Cutting taxes for 150 million Americans and their families allowing them to get a tax cut of up to $1000.
Easing the burden on the middle class by providing a universal homeowner’s tax credit to those who do not itemize their deductions, immediately benefiting 10 million homeowners, the majority of whom make under $50,000 per year.
Eliminating the income tax for any American senior making less than $50,000 per year, eliminating income taxes for about 7 million American seniors.
Simplifying tax filings so millions of Americans can do their taxes in less than 5 minutes.
Obama would pay for his tax reform plan by closing corporate loopholes, cracking down on international tax havens, closing the carried interest loophole, and increasing the dividends and capital gains rate for the top bracket.
The plan can be viewed in full HERE.
Tax Fairness for the Middle Class
“We believe that there is a place in the American economy for every American’s dream. And we know that when we extend that dream of opportunity to more Americans, all of us gain.”
“Instead of working to find ways to relieve the burden on the middle class, we’ve developed creative ways to remove the burden from the well-off. Instead of having all of us pay our fair share, we’ve got over $1 trillion worth of loopholes in the corporate tax code. This isn’t the invisible hand of the market at work. It’s the successful work of special interests. For decades, we’ve seen a successful strategy to ride anti-tax sentiment in this country toward tax cuts that favor wealth, not work. And for decades, we’ve seen the gaps in wealth in this country grow wider, while the costs to working people are greater.”
“…to get through these uncertain times, we have to recognize that we all have a stake in one another’s success. When folks are hurting out there on Main Street, that’s not good for Wall Street. When the changes in our economy are leaving too many people behind, the competitiveness of our country risks falling behind. When that dream of opportunity is denied to too many Americans, then ultimately that pain has a way of trickling up.”
“If we’re going to keep that social compact for a new century, we need a tax code that’s fair – a tax code that rewards work and advances opportunity. Every American who is ready to work for their American dream should be able to trust that they have a government that works for them. I’ll keep that trust by cutting taxes for working people, homeowners, and seniors, and by simplifying tax filing for middle class Americans.”
“I’d reward work by providing an income tax cut of up to $500 per person – or $1,000 for each working family – to offset the payroll tax that they’re already paying...Under my plan, 150 million Americans – and their families – will get a tax cut. And because this credit would be greater than their income tax bill, my proposal would eliminate all income taxes for 10 million working Americans.
“The second thing I’ll do to ease the burden on the middle class is provide a universal homeowners’ tax credit….This will immediately benefit 10 million homeowners in America. The vast majority of these are folks who make under $50,000 per year, who will get a break of 10 percent of their mortgage interest rate.”
“It’s time to give America’s seniors a break. So I’ll give retired folks the same kind of relief I’ll offer to working people. When I’m President, we’ll work to see that no retiree making less than $50,000 each year has to pay income tax. This will eliminate income taxes for about 7 million Americans, at a savings rate of roughly $1,400 each year.”
“When I’m President, we’ll put in place a system where 40 million Americans with a job and a bank account who take the standard deduction can do their taxes in less than five minutes. The government already collects wage and bank account information, so there’s no reason the IRS can’t send Americans prefilled tax forms to verify. This means no more worry. No more wasted time. No more extra expenses for a tax preparer.”