REPUBLICAN lawmakers, who took over both chambers of Congress starting this year, are already signaling that they will do what they can to block President Barack Obama’s proposal for tax increases on the wealthiest Americans.
Obama made his pitch on taxes, as well as other national and global issues, during the televised State of the Union address on Tuesday night, Jan. 20, in hopes of putting the new GOP-led Congress in the position of defending top income earners over the middle class.
Leading up to the president’s sixth address, the White House and GOP leaders have said they want to “find ways to compromise” over policy issues, but the president was likely to offer up proposals which are unlikely to advance in Congress within his final term.
The theme of the address was “middle-class economics,” with the President focusing heavily on ways to improve wage stagnation and economic mobility.
Officials said over the weekend that Obama would call for raising the capital gains rate on top income earners, as well as eliminating a tax break on inheritances. The revenue generated by those changes would fund new tax credits and other cost-saving measures for middle-class taxpayers, administrators said.
Tax increases are rarely welcomed by congressional Republicans, and will likely be dismissed by Republican lawmakers, if not outright ignored.
Rep. Adam Kinzinger (R-III.) said that he had heard all five of President Obama’s State of the Union addresses, which he said are filled with proposals “both good and bad.” Kinzinger told ABC that the president has fallen short this time, by failing to establish close ties to Congress.
Key Republicans in both chambers have indicated their opposition to the plan.
“Slapping American small businesses, savers and investors with more tax hikes only negates the benefits of the tax policies which have been successful in helping to expand the economy, promote savings and create jobs,” said Sen. Orrin Hatch (R-Utah), chairman of the Finance Committee.
“More Washington tax hikes and spending is the same, old top-down approach we’ve come to expect from President Obama that hasn’t worked,” said Michael Steel, a spokesman for House Speaker John Boehner.
White House aides were not surprised by the move. Officials disclosed details of the tax proposals on the condition of anonymity.
The centerpiece of the President’s tax proposal is an increase in the capital gains rate on couples making more than $500,000 per year to 28 percent, the same level as under Reagan’s administration. The top capital gains rate has already been raised, from 15 to 23.8 percent during Obama’s term.
Obama also wants to close what his administration is calling the “trust fund loophole,” a change that would require estates to pay capital gains taxes on securities at the time they are inherited. Officials said the overwhelming impact of the change would be for the top 1 percent of income earners.
Another proposal the president will make is one they hope the GOP would support: a fee on the roughly 100 US financial firms with assets of more than $50 billion.
Aiming to put more money into measures that will help middle-class Americans, Obama’s tax proposals—raising the capital gains rate, ending the inheritance loophole, and tacking a fee on financial firms—would generate $320 billion in revenue over a decade, according to the administration’s estimates.
“Are they going to agree on everything? Absolutely not,” said senior adviser Dan Pfeiffer in a CBS interview. “I think we should have a debate in this country between middle-class economics and trickle-down economics and see if we can come to an agreement on the things we do agree on.”
(With reports from Associated Press, USA Today)
(www.asianjournal.com)
(LA Midweek January 21-23, 2015 Sec. A pg.1)
