Obama To Propose Tax Hikes On Wealthy, Breaks For Middle Class

HUFFPOST ALERT Obama to propose tax hikes on wealthy, breaks for the middle class Anadolu Agency via Getty Images During his State of the Union address on Tuesday, President Barack Obama will lay out a plan to extend tax credits to the middle class by hiking taxes on wealthier Americans and big banks, according to senior administration officials. Under the plan, the capital gains tax would be raised from its current level of 15 percent up to 28 percent for couples with incomes over $500,000 a year. The plan would also strip a tax break, known as a "step-up," that allows heirs to avoid capital gains taxes on large inheritances. In addition, the plan would institute a new tax on the biggest financial institutions, basing the fee on liabilities in order to discourage risky borrowing. The administration says the fee would hit the roughly 100 banks that have assets of $50 billion or more. The president's plan would use revenues from those tax code changes to finance credits aimed at the middle class, officials said. That includes extending the earned income tax credits to families without children, which would benefit an estimated 13 million low-income workers, while also tripling the maximum tax credits for child care in low- and middle-income homes. Read the whole story Follow HuffPost on Facebook and Twitter Know something we don't? Email us at breakingnews@huffingtonpost.com Unsubscribe | Forward | Manage your notification preferences 770 Broadway, New York, NY 10003