President Obama is proposing $58 billion in addition taxes to finance health care reform
12 05 09 - 12:26
Obama wants $58 billion in taxes to offset errors
By Stephen Ohlemacher - Associated Press Writer
WASHINGTON—The Obama administration on Monday proposed $58 billion in additional taxes to offset budgeting errors that overstated revenues in the president's plan to finance health care reform.
The tax measures target a host of activities, including people who for tax purposes aggressively reduce the value of property received as gifts or in estates. To reduce fraud, other provisions would require investors, contractors and taxpayers to provide more information about certain transactions to the Internal Revenue Service.
The largest budgeting error overstated the amount of money that would be raised by limiting charitable and other deductions for high-income taxpayers. The limits would generate $267 billion over the next 10 years -- $51 billion less than the administration projected in February.
A smaller error overestimated the amount of savings expected from changes in Medicare and Medicaid over the next decade. The changes are now expected to save $309 billion -- $7 billion less than projected in February.
White House Budget Director Peter Orszag said the numbers were "re-estimated" in a blog posted to the Office of Budget and Management's Web site. A Treasury official said the projections had to be done quickly after President Barack Obama took office, resulting in the errors.
Congress has been cool to limiting deductions for individuals making more than $200,000 and couples making more than $250,000, fearing that charitable groups would be hurt. The proposal, however, is a big part of Obama's plan to pay for health care reform.
Obama wants to create a $634 billion fund that he says will serve as a downpayment on health care reform. A consortium of hospitals, insurance companies, drug makers and doctors added to the effort Monday by promising to cut $2 trillion in costs over the next decade.
Obama called the offer "a watershed event" in the long search for a solution to the millions of uninsured.