Obama’s proposed tax hikes put him at odds with the Republican presidential hopefuls. They have all called for tax packages that would lower taxes but possibly add to the federal deficit.
Obama’s 2013 budget proposal mixes tax cuts designed to improve the economy with long-term tax increases aimed at reducing the federal budget deficit.
The plan calls for a tax reform package that would increase revenue by $1.5 trillion over the next decade. Obama did not offer a detailed plan for tax reform. Instead, he proposed a series of changes to the current tax system and several principles for what comprehensive tax reform would look like.
Administration officials said Monday that Obama would release a framework for corporate tax reform by the end of the month. The top corporate income tax rate of 35 percent is among the highest in the industrialized world. But the system is filled with so many deductions, credits and exemptions that many corporations pay taxes at a much lower rate.
Obama says he wants to simplify the tax code, lowering marginal tax rates while eliminating or reducing tax breaks enjoyed by wealthy individuals and U.S.-based multinational corporations.
Obama’s plan would allow Bush-era tax cuts for the wealthy to expire at the end of the year, and would impose a new rule that people making more than $1 million a year pay at least 30 percent of their income in taxes. The “Buffett” rule, named after billionaire investor Warren Buffett, would replace the alternative minimum tax, which was originally designed to ensure that wealthy families pay at least some tax.