Obama Targeting Super-rich with Tax Hikes

COMMENTARY | President Barack Obama is doing his best to bait Republican opponents into election-season conflict with a new set of proposed tax increases.

Obama fired off a new shot in the eternal ideological battle between the GOP and Democrats with the release of his proposed 2013 budget on Monday. The so-called "Buffett Rule" -- named after billionaire investor Warren Buffett -- was included in the proposal. This new rule would require individuals who make at least $1 million per year to pay at least 30 percent in income taxes. It is a cornerstone in Obama's plan to overhaul the tax code in order to generate a $1.5 trillion increase in revenue over the next decade.

Part of this plan would involve making tax cuts enacted under President George W. Bush in 2001 and 2003 permanent for certain segments of the American population. Only tax rates in the top two brackets -- currently at 33 percent and 35 percent -- would expire and revert to pre-2001 percentage levels. Obama would also raise the long-term capital gains tax rate from 15 to 20 percent on individuals who are making more than $200,000 and $250,000 for married couples filing a joint tax return. Additionally, he calls for itemized deductions for individuals and families above those thresholds to allow deductions of 28 percent on a qualified expense instead of 33 to 35 percent.

Obama's proposed 2013 budget also includes provisions to make a partially refundable college tax credit and an expanded low-income tax credit permanent. The President wants to do all of this in an effort to make the wealthy pay their "fair share." He has made it clear he does not support the average working person paying a higher rate of income tax than individuals who bring millions of dollars in annual income.

Few if any of these proposals will make it through Congress and become a permanent part of the 2013 federal budget. Republicans favor making all Bush-era tax cuts permanent. In an election season where they are trying to take back the White House, it will only serve for ammunition for each major party to paint the other side as not acting in the best interests of the nation. Opponents of Obama's proposed budget will paint it as another attempt to apply his brand of socialist philosophy. Supporters of the budget will accuse Republicans as obstructionists who simply act only to serve the interests of the wealthiest Americans.

This is all a familiar script that has played out before. The inevitable compromise, when it finally comes, is guaranteed to leave as much of a sour taste in the mouths of all taxpayers as all of the drama and conflict preceding it.