This won’t take long. If you are blue-collar wage earner, a low-income family with children, or a college student, you should love President Obama’s tax plan. On the other hand, if you are making more than $250,000, you may not be so happy: By 2011, you'd be paying a lot more tax than you've gotten used to over the past few years. To the surprise of absolutely nobody, Obama’s budget includes many of the tax changes he promised during the campaign. He’d make permanent many of the “temporary” tax cuts in the just-passed stimulus. Working families would continue to get an $800-a-year tax cut long after the recession ends, and they’d continue to enjoy the benefits of a more generous Earned Income Credit and a more refundable child credit. Obama is proposing tax reductions for low- and moderate-income families of almost $800 billion over the next decade.    more »

To help pay for health reform, President Obama’s wants to limit deductions for high income taxpayers. He’s on to something, but I’ve got some questions about what he’s doing. This tax increase, sure to be politically contentious, would kick in starting in 2011 and raise about $318 billion over 10 years. That sounds like a lot, but in fact it would only fund about 20 percent of the total cost of the health plan Obama outlined in his presidential campaign. TPC estimated the price of that plan at $1.6 trillion over 10 years.    more »

Whatever his intentions, President Obama’s missed an opportunity at his fiscal summit yesterday. It is critically important for Washington to finally confront the long-term deficit. And Obama sent an important symbolic message by throwing this shindig. But the timing was all wrong. Right now the public and financial markets are obsessed with only one economic issue: the recession. With those fears so dominant, whatever was said at the White House yesterday will be quickly forgotten.    more »

Budget watchers Alan Auerbach and Bill Gale have just finished a new paper on the nation’s long-term fiscal future. I’ll get to the numbers in a second, but their conclusion could hardly be more grim: “The federal fiscal outlook is both bleak and uncertain.” And if that doesn’t get your attention, try this: Auerbach and Gale note a “discernable uptick” late last year in market fears of default in 5-Year Treasury notes. Have a nice day.    more »