WASHINGTON — President Barack Obama’s budget proposal would shift much of the tax burden from middle- and low-income families to the wealthy, while increasing taxes on many businesses.
WASHINGTON — President Barack Obama’s budget proposal would shift much of the tax burden from middle- and low-income families to the wealthy while increasing taxes on many businesses.
Oil and gas companies would be hit with big tax increases, as would U.S. companies doing business overseas. Hedge fund and other private equity managers would also see significant tax increases.
Most of the tax increases would be delayed until 2011 when the economy will presumably be improved.
Several of the tax cuts would be permanent extensions of those enacted in the economic recovery package this month.
Among them, a new tax credit that provides up to $400 a year for individuals and $800 for couples, and an expanded $2,500 tax credit for college expenses.
The budget outline released Thursday lacked many details about the tax provisions. But the policies represent a clear ideological break from the Bush administration.
Tax cuts enacted under Bush for families making more than $250,000 would be allowed to expire in 2011, increasing the top income tax rate from 35 percent to 39.6 percent. The top capital gains tax rate would be increased from 15 percent to 20 percent.
Republicans and business groups said the tax package would delay an economic recovery that has yet to happen, while Democrats hailed the proposal as a break from the policies that caused the recession in the first place.
“This is a budget about a new era of responsibility,” House Speaker Nancy Pelosi said. “This is about accountability, fiscal discipline, cutting waste, fraud and abuse.”
Marty Regalia, the chief economist at the U.S. Chamber of Commerce, called Obama’s tax proposals “the biggest return to the welfare state that we’ve seen in decades.”
Couples making more than $250,000 would face new limits on the amount of deductions they could take on their taxable income, including deductions for mortgage interest, charitable donations and state and local taxes. The change would raise about $180 billion over 10 years.
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