NEW YORK: Obama aides say he wants Congress to raise $320 billion during the next 10 years by clamping down on the rich and big businesses, and at the same time cut middle class taxes by $175 billion. President Barack Obama will try to capture the country’s imagination and garner its support for a bold populist agenda in his State of the Union address Tuesday evening.
White House aides say he will kick off an aggressive campaign against the rich and unveil or refresh a series of unilateral actions to prove that he is not an irrelevant lame duck.
What is likely to make the biggest splash–and start another political war over taxes and income inequality–is Obama’s plan to increase taxes and fees on the richest Americans and on the nation’s largest financial institutions in order to finance tax cuts for the middle class and other programs.
The added revenue would also be used to pay for other programs such as giving many community college students free tuition for two years, a proposal that Obama advisers say would cost $60 billion over a decade.
A key provision will be to eliminate a tax shield for inherited assets, which protects hundreds of billions of dollars from taxation every year. The Obama plan also would increase the top tax rate on capital gains from the sale of stocks and the like to 28 percent from 23.8 percent for couples earning more than $500,000 a year.
Middle-class taxpayers would get a $500 credit for families in which both spouses work; more tax credits for child care and education, and additional incentives to save for retirement.
Republicans say it’s a return to the tax-and-spend ways and class-warfare objectives of liberal Democrats in the past. Conservatives argue that increasing taxes, as Obama proposes, would slow economic growth and punish success. GOP leaders instead want to slash taxes, reduce spending and cut regulations.
