The President's new budget

President Obama is about to submit to the Congress the new budget proposal, the key feature of which is higher taxes on "the rich":
"The president’s blueprint calls for reductions in spending on federal health programs and the military, a small raise for federal workers and more than $1.5 trillion in new taxes on corporations, hedge-fund managers and the wealthy, in part through the expiration of the George W. Bush-era tax cuts on annual incomes of more than $250,000.

Obama also has called for changes to the tax code that would require households earning more than $1 million a year to pay at least 30 percent of their income in federal taxes, but senior administration officials said Friday that the blueprint will provide no additional details on how such a levy would be structured."


My comments:
1. Regardless of whether one supports higher taxes or not, we are all aware that none of these tax proposals has a chance to be approved by the Congress. Hence, expect the next round of the government near-shutdowns, credit downgrade threats and so on. At best this is simple politicking, at worst - political extremism.

2. Pay attention how the language regarding the "Buffet tax" transforms as the tax creeps into the tax code: while previously it was about taxing the fortunate individuals, who make more than a million a year, now it is about households, which more often than not consist of several individuals (e.f. parents and children) with income per person much less than a million.