President Barack Obama has thought up a more equitable tax structure that will require the wealthiest people in the United States to shell out more money at tax time.
The 99% may be catching a break on their taxes, so you know rich conservatives are about to pitch fit!
During his weekly address, the president gave Americans a preview of what they can expect to hear during his State of the Union Address on Tuesday. This is often a time to reflect on what has gone on in the nation over the last year while looking ahead to the future; this time around President Obama will be sharing his proposal for revising the tax system.
As hinted above, he’d like to give middle class a bit of a break by extending some tax credits. However, the Huffington Post reports that that would come at a price for wealthier Americans and big banks because their taxes would increase under the president’s new plan. According to sources within his administration, these changes would “almost exclusively” hit the top 1 percent of earners in the U.S.
Under said plan there will be a hike in the capital tax from 23.8 percent up to 28 percent for couples earning more than $500,000 a year. It would also do away with a “step-up” tax break that exempts people from paying a capital gains tax when their receive a large inheritance. The president also plans to level a new tax against financial institutions with particularly deep pockets. This measure would affect about 100 banks worth at least $50 billion each. And just to make sure that they don’t engage in too much risky borrowing the tax will be based on their liabilities.
Republicans probably won’t like the president’s plan, but an official from his administration explained that “this proposal is probably the most impactful way we can address the manifest unfairness in our tax system.”
With the money collected under the President Obama’s plan, he plans to give more working people tools for a retirement account. Also, companies with 10 or more employees that don’t currently offer their workers a 401k would be required to enroll them in an automatic IRA.
Previewing his plan for the State of the Union Address does break from tradition, but at least his opponents can’t say he sprung this new tax outline on them.