White House Deficit Reduction/Tax Proposal (Sept. 19, 2011 Rose Garden Speech)

(Administration's plan continues application of $1.2 trillion in discretionary spending cuts that were already included in debt ceiling law previously enacted which is estimated to cut $350 billion from defense budget over next 10 years, and adds $1.1 trillion in defense cuts and unspecified spending reductions on benefits for military personnel; plan includes no structural reforms to existing major entitlement programs; no increase in age of eligibility for Medicare enrollment (remains at 65) instead of going to 67 which the President had supported during debt ceiling negotiations and which CBO estimates would save $124 billion from 2012 to 2021; proposal cuts Medicare spending by changing payments to rural providers and applying Medicaid rebate (i.e., price control system) for drug payments to Medicare Part D, among other things; proposal includes increase in Part B and Part D Medicare premiums for upper income retirees and increases from 5% to 25% the percentage of seniors paying such premiums; federal workers to contribute extra 1.2% of compensation toward their retirement; new fee on military retirees to participate in Tri-Care health program; no proposal to repeal any portion of the Patient Protection and Affordable Care Act of 2010 which CBO revised projections show an increase in deficit spending significantly in the out years; proposal includes $1.5 trillion tax increase, including a tax increase on families and businesses with AGI over $250,000 annually, and a 5.4 percent surcharge on families earning more than $1 million per year. (MFJ return); [Note: the proposal does not account for the fact that IRS data shows that, for all taxpayers, the current average tax rate is 11 percent (once credits and deductions are accounted for) and that the highest average tax rate paid by persons earning less than $100,000 annually is 8 percent and the average tax rate for persons between $1 million and $10 million is 25 percent with those earning more than $10 million paying an average of tax rate of 26 percent; no mention made of fact that top 0.1 percent of all income earners paid 16.4 percent of total tax burden and the bottom 80 percent of all income earners paid 10.9 percent of total tax burden; no mention made that top 0.1 percent of income earners paid more in total taxes than did the bottom 80 percent even though the bottom 80 percent made more than six times as much money as the top 0.1 percent.]; minimum 10-year term for grantor retained annuity trusts with such trusts having a remainder interest greater than zero; elimination of valuation discounts; reversion to 2009 estate and gift tax law; increased depreciation period for privately-owned jets; repeal of deduction for intangible drilling costs for five largest oil companies; repeal of I.R.C. §199 for domestic producers of oil and gas; President's extension of tax cuts to expire at end of 2012 on families earning more than $250,000; elimination of carried interest; no mention made of 1843 account established by U.S. government to accept gifts to the United States that is for general use by the federal government that can be made available for budget needs; many parts of proposal have bi-partisan opposition in the Congress and proposal likely dead on arrival).