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World

Obama’s search for 3 trillion dollars

Translated Wednesday 21 September 2011, by Jayne McKenzie and reviewed by Bill Scoble

Following the downgrading of the United States’ credit rating by Standard and Poor’s, Obama was forced to attempt to narrow the gaping hole that is America’s debt. The bankers and Republicans were complaining too much.

He at least promises that the efforts will be shared. This will indeed be necessary with such an ambitious target: reducing the budget deficit by 3,000 billion dollars (2200 billion euros) over the next ten years. “We can not get out of this abyss only by reducing spending”, stated Obama. Revenues will therefore have to rise.

In particular, with a special tax on millionaires’ incomes. The “Buffett” tax, named after the investor and multimillionaire Warren Buffett who suggested it, involves taxpayers who earn more than one million dollars (around 725,000 euros). This measure remains symbolic, but is slightly less useless than the light policy presented by François Fillon several weeks ago. For example, tax loopholes are to be shrunk, saving up to 340 billion euros. Tax on the highest-level incomes should also rise slightly. The goal, Obama explained, is that the tax rate for the richest American taxpayers goes back to the level it was at in the 1990s, and that the middle class does not pay proportionately more than the millionaires. Overall, the richest people should see their tax rate rise from 15% to 30%. Obama also stated that he intended to make businesses contribute, but did not reveal the details of this plan.

But, make no mistake, these tax rises will undoubtedly go along with drastic cuts to the Nation’s budget. And not only to the military sector (with a withdrawal from Iraq and Afghanistan planned), but also to Social Security for retirees, for one. And in the area of health, the "troubled" Medicare and Medicaid programs will be severely cut, by more than 400 billion euros.


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