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From the estate to capital gains...


Obama’s OMB Chief Defends Raising Taxes

From the estate to capital gains…

President Obama’s budget boss yesterday offered a spirited defense of the Administration’s call for raising taxes on the highest wage-earners in its 2012 budget request. 

Over a lunch for reporters in Washington hosted by the Christian Science Monitor, HUMAN EVENTS pointed out to Office of Budget and Management Director Jack Lew that analysis by groups such as the Heritage Foundation and Americans for Tax Reform conclude the Obama budget, if enacted in full, would raise taxes by $1.7 trillion over the next decade.

Lew made no attempt to argue this and in fact, defended the budget’s proposed increases in the estate and capital gains tax as well as those on households that make more than $250,000 a year. 

“I think that if you look at the challenges we face in terms of getting our fiscal house in order,” Lew said, “the President made clear in December he didn’t believe we could afford to keep the tax rates in the highest tax brackets where they were set and where the December legislation continued them.”

Lew defended the President’s acceptance of the Bush tax cuts back in December because we need to “avoid a tax increase in January of this year [so]we needed to keep the provisions that were going to provide for more economic activity now.”

But when they expired at the end of two years, Lew added, “we needed to allow them to go back to the levels they were at in the 1990’s when we had the longest period of uninterrupted growth in our nation’s history.”

The OMB head insisted that “[w]e’re talking about tax rates that were totally consistent with and part of the economic landscape when we last had economic growth [sic].”

When HUMAN EVENTS pressed him on raising the estate tax, Lew made the somewhat surprising statement that “I think everyone agrees there needs to be a readjustment of the estate tax from where it defaulted to when the provisions that were in effect ran out.”  He added that “there was a bipartisan agreement that the levels that were in effect in 2009 were reasonable and as part of the December agreement, there were more generous terms put in place.  And at the time in December, I think it was also made clear that we thought the 2009 levels were more appropriate.”

“So what we tried to do in this budget was lay the foundation for going back to rates that had been the subject of considerable agreement and to use that as the policy base.

We noted that Lew served in the Clinton Administration when the 42nd President signed a cut in capital gains that brought in considerable revenue and was key to a budget surplus.  But Lew would have none of it.  Rather than try to argue about the White House proposal to raise capital gains tax rates from 15% to 20%, he simply said: “[I]f you look overall at our budget, we have provisions that encourage small business investment, provisions that normalize the treatment of capital gains with small and large businesses, and we’ve tried to put together a series of well-targeted incentives on economic growth.”

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John Gizzi has come to be known as â??the man who knows everyone in Washingtonâ? and, indeed, many of those who hold elected positions and in party leadership roles throughout the United States. With his daily access to the White House as a correspondent, Mr. Gizzi offers readers the inside scoop on whatâ??s going on in the nationâ??s capital. He is the author of a number of popular Human Events features, such as â??Gizzi on Politicsâ? and spotlights of key political races around the country. Gizzi also is the host of â??Gizziâ??s America,â? video interviews that appear on Gizzi got his start at Human Events in 1979 after graduating from Fairfield University in Connecticut and then working for the Travis County (Tex.) Tax Assessor. He has appeared on hundreds of radio and TV shows, including Fox News Channel, C-SPAN, America's Voice,The Jim Bohannon Show, Fox 5, WUSA 9, America's Radio News Network and is also a frequent contributor to the BBC -- and has appeared on France24 TV and German Radio. He is a past president of the Georgetown Kiwanis Club, past member of the St. Matthew's Cathedral's Parish Council, and secretary of the West End Friends of the Library. He is a recipient of the William A. Rusher Award for Journalistic Excellence and was named Journalist of the Year by the Conservative Political Action Conference in 2002. John Gizzi is also a credentialed correspondent at the World Bank and the International Monetary Fund. He has questioned two IMF managing directors, Dominique Strauss-Kahn and Christine LaGarde, and has become friends with international correspondents worldwide. Johnâ??s email is JGizzi@EaglePub.Com

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