Republicans on Sunday rejected a new proposal by President Obama to raise hundreds of billions of dollars in new taxes for the benefit middle and lower income workers.
Sen. Orrin Hatch, R-Utah, who will oversee an effort to reform the tax code as chairman of the Senate Finance Committee, said the proposal would hinder economic expansion and job growth and would shrink savings.
“The president needs to stop listening to his liberal allies who want to raise taxes at all costs and start working with Congress to fix our broken tax code,” Hatch said.
The White House on Saturday said closing tax loopholes and providing tax cuts and other benefits for the middle class will be a central part of President Obama’s State of the Union address on Tuesday.
Obama will make the pitch before a GOP-led Congress, which is all but certain to reject it.
Hatch is expected this year to work with House Ways and Means Committee Chairman Paul Ryan, R-Wis., to try to reform at least part of the corporate tax code. The goal is to achieve lower corporate tax rates, perhaps by closing some loopholes, say GOP aides.
Obama’s plan would use money from closing loopholes for certain individual tax breaks, not for lowering the corporate tax rate.
The plan would raise the capital gains tax to 28 percent, up from 23.8 percent, for couples earning more than $500,000.
It would also increase inheritance taxes and impose a fee on big banks and financial service firms.
In total, Obama’s proposed tax increases would raise $320 billion over a decade and would be used to pay for new tax cuts for middle class workers as well as a plan to offer free community college, which would cost $60 billion over ten years.
Republicans said Sunday they will work to lower tax rates in order to spur business growth.
“It’s a nonstarter,” Rep. Jason Chaffetz, R-Utah, appearing on CNN, said of Obama’s plan. “We’ve got to make sure that we get a regulatory environment that’s predictable, that we bring those tax rates down and then we quit spending this money that we don’t have. More government, a 300-plus-billion-dollar tax bill from Barack Obama is not the formula for this country to succeed.”
Obama’s plan won praise from some Democrats and others.
“At a time of obscene levels of income and wealth inequality, President Obama’s plan moves us in the right direction,” Sen. Bernie Sanders, I-Vt., said. “I look forward to working with the administration to adopt a tax system that eliminates unfair tax loopholes that only benefit the wealthiest people and largest corporations and to increase the take-home pay of working Americans.”
