by Adam Lee Buller

Created on: August 28, 2009   Last Updated: August 31, 2009

Arise Capitol Hill and welcome to the White House Robin Hood and his political aide for the 21st Century President Barach Obama. This has been the comparison made by most of this high earners in Washington as Mr Obama delivered his budget plans for the fiscal year 2010 beginning October 1st of the same year. Why this comparison has been made is highlighted by the major aim of this budget, take from the rich and give to the poor. This is a complete and complex reversal of the failed policies of his predecessor President George W Bush who gave tax breaks to those who needed them the least which added to an increase in the wealth gap between the rich and poor in America!

What exactly are the tax implications of President Obama's plans though and how will they affect the various class distinctions in America both now and in the future?

Let's start with the tax increases that have so much angered the fat cats of the corporate world. It is no surprise that those who earn over the thresholds that have been set out by President Obama, that is those to be in line for a tax increase, have deeply criticized his plans and accused them of harming future job creation and stifling small business.

The first tool available to President Obama to begin his massive redistribution of wealth is to let the tax cuts for the super rich put in place by former president George bush expire when they are due to in 2010. This will mean a return to the previous tax rates introduced by Former President Bill Clinton over a decade ago of over 39% in comparison to the current 35% on those families earning over $378000 and 36% from a current 33% for those earning over $234000. Although these tax increases are long overdue and only affect around 3 million elite American families it is predicted to raise around half of the $1.3 trillion dollars of extra tax revenue President Obama is looking for to redistribute in tax cuts to middle and lower earners, as well as to try and reduce the ballooning US deficit from all the extra credit crunch bailouts and stimulus.

Let's not forget about the tax rise on investment income to 20% from the current 15%, so it's not just higher earners salary that will take a tax hit but their investments also. Obama also plans to raise another $318 billion by capping the overall value of itemized deductions at 28 percent. This will not be good news for business leaders either, who have lavished money on expensive vehicles and mortgages to significantly reduce their tax

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