Proposed tax hikes on capital gains and banks will be included in President Obama’s State of the Union address Tuesday, according to a White House announcement Saturday. The announcement continues Obama’s tradition of proposing tax hikes in his six previous State of the Union addresses dating back to 2009. Here’s a list detailing Obama’s proposed tax hikes:
Obama will call for a capital gains tax hike on high-earners from 23.8 percent to 28 percent, nearly double the 15.35 percent rate when he took office. He also wants to change the treatment of inherited capital gains so that inheritors end up paying more to the government. Banks with assets over $50 billion would also be hit with a new 0.07 percent tax on their liabilities, raising $100 billion over 10 years. These changes combine for a $300 billion tax increase over 10 years.
Obama proposed closing tax loopholes to raise effective tax rates and using the revenue for infrastructure spending. He also wanted to close tax breaks that he said give “$4 billion a year to fossil fuel industries.” The 2014 State of the Union had the fewest references to taxes of Obama’s addresses so far.
Obama proposed deficit reduction by lowering the number of “tax loopholes and deductions for the well-off and well-connected.” He reiterated support for the so-called Buffett Rule, which would raise taxes on the wealthy. He also called for reducing tax breaks for companies that move jobs overseas.
Obama called for reducing tax deductions for companies that outsource jobs and proposed a basic minimum tax on every multinational company. The 2012 State of the Union was the first address that included Obama’s “Buffett Rule,” where anyone with more than $1 million of income would have to pay at least 30 percent in taxes. Obama wanted to eliminate tax breaks for the top 2 percent of income earners, to the tune of almost $1 trillion in tax hikes. He also proposed a “small fee” on big banks. Obama mentioned taxes more times in his 2012 address than any other address so far.
Obama said “the only way to tackle our deficit is to cut excessive spending,” including “spending through tax breaks and loopholes.” This implies raising effective tax rates by cutting tax credits and deductions. He also called for a return to higher tax rates for the top 2 percent of income earners by allowing the Bush tax rates to expire for them and for the elimination of some corporate tax deductions and credits.
Less than two months before Obamacare was signed into law, Obama was talking about how his healthcare reform plan would reduce the deficit, although he did not mention how — Obamacare's $1 trillion net tax hike over 10 years. He also proposed a fee on the biggest banks, who he said needed to “pay back” taxpayers for bailouts. Obama also wanted to raise taxes on companies that outsource jobs, “oil companies ... investment fund managers and for those making over $250,000 a year.”
From the beginning, Obama wanted to close tax breaks for corporations that outsource jobs. He also wanted to end tax breaks for the 2 percent of Americans that earn the highest incomes, claiming that anyone who earned under $250,000 a year would not see higher taxes. Technically, in 2009, Obama only gave an address to a Joint Session of Congress, not a State of the Union address.