Dems Balk at Obama Tax on Rich
Increased burden on high-tax states to fund health reform, claims admin
By Gabriel Winant,  Newser User
Posted Feb 27, 2009 9:40 AM CST
Budget Director-designate Peter Orszag testifies on Capitol Hill in Washington, Jan. 14, 2009, before the Senate Homeland Security and Governmental Affairs Committee hearing on his nomination.    (AP Photo/Susan Walsh)
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(Newser) – President Obama is about to get into his first tax battle and, surprisingly, it might be with Democrats. Politico reports that Obama’s proposal to limit the federal tax deduction of state and local taxes for the wealthy is running into opposition from officials from high-tax, largely Democratic states. Obama’s fight will be with senators like Chuck Schumer, who calls the idea “a dagger aimed right at the heart of New York.”

Obama’s budget director stresses, “All that we are doing is returning the rate to what it was at the end of the Reagan administration.” The White House also, slyly, links the tax hike to health care reform. This is artificial—it’s all the same pot—but makes it harder for blue state senators to oppose.