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Digital News Report – Digital News Report – Although President Obama said in his State of the Union Address last month that he has not raised taxes, his 2011 budget calls for a $1 trillion tax increase on families with income above $250,000.
Republicans questioned Treasury Secretary Timothy Geithner before the Senate Finance Committee Tuesday. Senator Chuck Grassley, R-Iowa, asked if tax increases are necessary. “Fiscal history in the past two decades shows that revenues grow strongly when the economy recovers,” Grassley said.
President Obama planned tax increases in his 2010 budget, but they didn’t materialize. But now that President George W. Bush tax cuts are set to expire, the tax increases are more likely.
The deficit is expected to exceed $1.6 trillion. The skyrocketing national debt worries economists who believe this could cause runaway inflation and / or runaway interest rates.
Geithner has also called for fees on large banks to help offset the cost of the bailouts.
Besides the tax increases, there are incentives for tax credits. The Obama Administration has proposed credits for green energy and credits to those companies who keep jobs and create jobs in the United States.
By: Tim Edwards