Tags: Geithner | Tax | Hikes | Wealthy

Geithner: Tax Hikes on Wealthy Will be ‘Modest’

Thursday, 26 April 2012 09:26 AM

Any tax hikes on the wealthy will be modest and only apply to the very rich, and the government won't finance itself with an across-the-board 11 percent hike the Romney camp says the Obama administration has planned, says Treasury Secretary Timothy Geithner.

In a Wall Street Journal OpEd, Columbia Business School Dean and Mitt Romney adviser Glenn Hubbard said everyone earning under $200,000 a year could expect to see taxes go up 11 percent under President Barack Obama's spending plans.

"That's a completely made up, remarkably hawkish observation for an economist," Geithner tells CNBC.

Editor's Note: Obama’s Last-Ditch Effort to ‘Fix’ America Will Cause the Unthinkable

The White House aims to bring the country's deficits down to below 3 percent of gross domestic product over the next four years to ease the economy's debt burdens.

"In our plan, in our strategy, we propose a series of tax reforms that would modestly increase the burden, but only on the top 2 percent of Americans," Geithner says, adding "98 percent of Americans would see no increase in their effective tax burden."

Furthermore, the wealthy 2 percent will only see modest tax hikes at that, Geithner adds.

"We believe, as part of a balanced strategy, you have to ask for a modest additional increase in revenues from the top 2 percent of Americans. Again, only 2 percent of Americans, the people in the strongest position to withstand that."

President Barack Obama's recent proposal to slap a minimum 30 percent tax floor on those earning $1 million a year suffered defeat in the Senate recently.

The proposal, dubbed the Buffett Rule as it was championed by legendary investors Warren Buffett, drew criticism of serving as a political tool used for election-year politics that didn't address needed fiscal reform, experts say.

"Politicians' time would be better spent working on an overhaul of the tax system that could actually pass rather than reforms that are likely to go nowhere," says Maya MacGuineas, president of the nonpartisan Committee for a Responsible Budget, according to Reuters.

Editor's Note: Obama’s Last-Ditch Effort to ‘Fix’ America Will Cause the Unthinkable

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Thursday, 26 April 2012 09:26 AM
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