Obama to Propose $3.2 Trillion Deficit Reduction Plan, Including $1.5 Trillion in Tax Increases

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President Barack Obama has proposed a plan to reduce the federal deficit by $3.2 trillion over the next ten years.  The basic plan would include:

  • $1.5 trillion in tax hikes, mostly on the “rich”
  • $1.1 trillion in savings from winding down the wars in Iraq and Afghanistan
  • $580 billion in savings from “mandatory” programs, including $248 billion in Medicare cuts

The plan will be sent to the Join Select Committee on Deficit Reduction, the so-called Super Committee created during the recent federal government stalemate.

Although specific details of the tax related provisions of the plan are yet to be released, we do know the plan calls for raising $800 billion in taxes by raising the tax rates on families earning more than $250,000 at the end of 2012.

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