President Obama set to call for tax increases during State of the UnionPosted by Lawrence Lease on January 18, 2015
President Obama is set to deliver his State of the Union speech on Tuesday in front of a Republican controlled Congress. White House officials reported on Saturday that the President will introduce a tax package calling for billions in tax increases on top earners in an attempt to fund new tax credits and other projects the White House claims will help the middle class. President Obama has been touting how he wants to revamp the tax codes and close loopholes in hopes of keeping the American economy growing, and help grow the middle class.
In preparation for Obama’s second to last address, he has been traveling the country and unveiling White House proposals including free community college to qualified students, paid sick leave and improving online security following the Sony Pictures cyber-attack.
The Obama administration said that closing loopholes for the wealthy would generate revenue of $320 billion over 10 years; the new tax breaks that Obama plans to propose would cost $235 billion over 10 years. The increased taxes would help fund the free community college plan. The highlight of the president’s proposal is his increase on the capital gains and dividends for couples who make more than $500,000 per year to 28 percent. President Obama is hoping to move the revenue earned into several measures which include:
- A credit of up to $500 for families in which both spouses work. The administration says 24 million couples would benefit from the proposal, which would apply to families with annual income up to $210,000.
- Expanding the child care tax credit to up to $3,000 per child under age 5. The administration says the proposal would help more than 5 million families with the cost of child care.
- Overhauling the education tax system by consolidating six provisions into two, a move that could cut taxes for 8.5 million families. Republicans have been open to the idea of consolidating education tax breaks.
During Obama’s radio broadcast, he gave a preview of whom he selected to sit in the “presidential box” during his speech. He has invited a woman who expanded her business through federal loans, an Afghanistan war veteran and student who is repaying his loans and obtained healthcare through federal programs. I’ll call on this new Congress to join me in putting aside the political games and finding areas where we agree so we can deliver for the American people,” Obama said.
Following his speech, he will speak at Boise State University in Idaho on Wednesday and then travel to the University of Kansas. Senate Majority Leader Mitch McConnell (R-KY) has warned the president again that he needs to abandon his “go-it-alone” approach and hopes that Tuesday can be a fresh start for working together. President Obama is not expected to make any major foreign policy announcements but will probably call for Congress not to increase sanctions against Iran.
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