President Obama Wants Tax Increase On The Wealthy, Will Announce At State Of The Union
On Tuesday, President Obama will take to the House of Representatives to deliver his State of the Union address, the sixth of his tenure. And in the weeks leading up to it, we're slowly but surely getting a sense of what he'll be discussing, from internet access and security, to immigration, to — you guessed it! — tax policy. That's right, it's finally that time again: President Obama wants a tax increase on the wealthy, a proposal which is sure to bring thunderous applause on one side of the House, and tense silence on the other.
Throughout the six years of the Obama presidency, few issues have proved as durable and explosive as taxation has. Obama, obviously, has long favored a deepening of our progressive tax system. In simplest terms, the rich ought to pay more, while the poor and middle-classes should get a break. That emphasis on cutting a break for middle-class taxpayers has long been a Democratic strategy on this issue, a way to duck the old-school "tax and spend Democrat" label, and avoid inflaming a big swath of the traditional Democratic constituency. And it's still in play here, as USA Today reports — Obama will call for the closure of some upper-income tax loopholes, while recommending new middle-class tax credits.
Here's what's known so far, although as with any State of the Union call to action, you can bet there are some juicy particulars that the White House will be holding back for the time being. Basically, Obama will call for raising the top rates of taxation on capital gains (the money someone nets through their investments, rather than traditional earned income, basically). As detailed by the Huffington Post, a couple earning more than $500,000 per year would be subject to a capital gains hike, from 15 percent to 28 percent. There would also be a revision of a tax break for those who inherit large sums of money, and new liability-based fees imposed on large banks, conceived to discourage over-borrowing, limiting risk.
For middle-class taxpayers, on the other hand, some new boons could be on the way — in particular, Obama wants to exponentially increase the value of child care tax credits, and expand the earned-income tax credit to include families with no children, a move which would open up the credit to millions.
Of course, proposing is one thing, and actually doing is another. Any attempt to change the tax code will require action by Congress, with both houses now controlled controlled by the Republican Party. And as basically everyone knows, the Republicans didn't get to where they are today by raising taxes on the rich. To the contrary, the very concept of progressive taxation is anathema to some in the congressional GOP, and how much of Obama's remaining two years of domestic policy actually gets done depends heavily on their cooperation. In other words, this is a starting point of negotiation, not a final one, and it'll be the subject of a whole lot of grumbling going forward.
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