The financial problems the nation has been confronted with are far from resolved even though the fiscal cliff was avoided to begin the year. Money News has reported today, Jan. 22, 2013, Obama Seeking to End Business Tax Breaks in New Term. Shortly after the U.S. House voted on Jan. 1 to set the top individual tax rate where Obama has wanted, the president already was beginning to talk about changing the tax system further, “so that the wealthiest corporations and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans.”
Further tax increases also remain an option for Obama. Richard Rubin has reported for Bloomberg, Often-Rejected Tax Increases Remain Among Obama Options. For several years Obama has insisted that higher taxes must be part of what he has called a balanced approach to deficit reduction that would at least stabilize the debt as a percentage of the economy. He has said that his re-election means that the country has endorsed that strategy. In the meantime the Congressional Budget Office has said the U.S. is on a long-term fiscal path which is unsustainable.
On Jan. 1, 2013, the $630 billion tax increase which was passed by Congress gave Obama about 40 percent of the $1.6 trillion in tax revenue which he has sought in talks with Republicans. Later in January Obama said that his goal for additional deficit reduction is $1.5 trillion over the next decade. This suggests a $750 billion tax increase, or somewhat less depending on how interest savings are given consideration, if this deficit reduction target is split between revenue and spending.