President Barack Obama will propose tax hikes on investments and wealth transfer to fund breaks for the middle class in his State of the Union address later Tuesday.
He will detail the plan, which will raise $320 billion over 10 years, in his first address to a congress completely in Republican hands; they control both chambers now.
Republicans are not opposed to tax reforms. But they favour a more equitable approach — taxes should go up or down for everyone. Obama’s proposals raise taxes only for the rich.
“Now that we have fought our way through the crisis, how do we make sure that everybody in this country, how do we make sure that they are sharing in this growing economy?” Obama said in a video setting up the address.
President Obama is aggressively pursuing his agenda now with no fear of losing another election personally or for the party, and has said he will use executive powers if he has to.
Major highlights of the tax plan include closing the trust fund loophole, raising the total top capital gains and dividends rate back to the level under President Reagan, making the biggest financial firms pay their fair share. The revenue generated will be used to give tax credits to families with both spouses working, triple child care credit, make college education affordable and extend retirement benefits.