$1.75 Trillion Deficit Seen as Obama Unveils Budget Plan – Obama Plans Major Shifts in Spending
Middle-income families:
Same tax rates, some tax credits
For families in the middle, the Bush tax cuts would remain in place. The budget would also extend tax breaks included in the economic stimulus plan, like the $400 Making Work Pay credit and the credit for college tuition.
Household with $76,000 income
| Taxes under current law | Taxes under new plan | Change in taxes | |
|---|---|---|---|
| Single, no children | $10,400 | $10,100 | -$380 |
| Married, two children | $4,100 | $3,300 | -$800 |
Assumes a small amount of tax saving provided by the newly created Making Work Pay credit, which offsets some Social Security taxes.
The potential perils of Washington’s staggering deficits are known, but trying to overcome them during a recession carries its own risks.
Editorial – Misguided Budget Cuts – NYTimes.com
Tax Changes Under the New Budget – Interactive Graphic – NYTimes.com: “Under the president’s proposal, 95 percent of earners would not see a tax increase, while the top 5 percent would see major increases.”
Snap Judgment 