President Links New Federal Tax Plan to New Initiatives

As reported on The Hill, The White House has released details about the President’s new tax plan in advance of the upcoming State of the Union Address.

His plan would generate $320 billion over 10 years by raising the capital gains and dividends rate to 28 percent — the same rate under President Reagan, White House officials point out — on inherited assets, such as trust funds. The proposal calls for raising the base capital gains rate to 24.2 percent from 20 percent. The 3.8 percent Medicare surcharge pushes that level to 28 percent total, White House officials said, up from 23.8 percent. The plan would affect couples with incomes of at least $500,000 a year.

About $210 billion would be generated from the capital gains changes and $110 billion from adding a new fee on financial firms with more than $50 billion in assets – an estimated 100 companies – that would make it more costly for them to borrow heavily and take on more risk, officials said. . . Administration officials say the funds generated by the plan are more than enough to cover the estimated $235 billion in new initiatives proposed by the president over the past week. Those proposals include the $60 billion over 10 years for two years of free community college. Other plans include expanding sick leave for workers, lowering mortgage premiums and extending broadband Internet service. . .
The plan is similar to a Democratic proposal released last Monday by Rep. Chris Van Hollen (D-Md.) that would also add a financial fee and aim to rebalance the tax code back toward middle-class workers.
For more information, read the full story from The Hill here.