Yesterday President Obama announced his intentions to reduce $4 trillion from the federal deficit. His plan includes $1 trillion of tax increases over the next decade, including new deduction limits and higher tax rates for wealthy Americans.
“I believe reform should protect the middle class, promote economic growth, and build on the fiscal commission’s model of reducing tax expenditures so that there is enough savings to both lower rates and lower the deficit,” Obama said in his remarks at George Washington University in the capital.
Until now, Obama’s calls for a tax overhaul had focused on the corporate tax code and on allowing income tax rates for high earners to rise in 2013. Under current law, all of the income tax cuts that were extended last year would revert to pre-2001 levels at the end of 2012.
He reiterated his support for those policies today.
“I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans,” Obama said. “But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can’t afford it. And I refuse to renew them again.”
Obama’s support for revenue-raising tax changes puts him at odds with many congressional Republicans, including House Majority Leader Eric Cantor of Virginia and Senator Orrin Hatch of Utah, the top Republican on the Finance Committee.