Obama on Tuesday announced a plan to slash taxes for corporate and wealthy Americans, arguing that the federal government’s “wasteful” spending will spur economic growth.
The president’s plan, which will be formally unveiled on Wednesday, would allow taxpayers to deduct up to $10,000 of federal taxes from their taxable income.
Obama also pledged to raise the top marginal tax rate for those earning more than $1 million, which would be 10%, from the current rate of 33%.
The White House did not say how the federal tax rate would be adjusted, but said that for couples earning more, the rate would drop to 28% from 35%.
The White and Congressional Black Caucus have long criticized the president for using tax breaks for corporations and wealthy individuals to pay lower taxes than their paychecks.
Under the plan, taxpayers would also be able to deduct the full value of the tax credit that most taxpayers receive when they itemize their deductions, such as mortgage interest and charitable contributions.
A White House official said that a key goal of the plan is to make it easier for Americans to reduce their tax bills.
“We want to make sure that we’re helping the American people and helping them in this economy, so we’re going to be lowering the rate on a wide range of taxes,” the official said.
Earlier this month, the White House released a draft plan that included a proposal to eliminate tax breaks that some Republicans said were a giveaway to wealthy Americans.
But Democrats have said the plan could actually exacerbate the nation’s deficit, as the cuts would disproportionately benefit those at the top of the income scale.
The White house has also announced plans to increase spending on education, housing, infrastructure and other programs, to offset the expected tax cuts.
The budget plan was expected to be unveiled Wednesday by White House budget director Shaun Donovan.
White House spokesman Eric Schultz declined to comment on the plan when asked if it was possible to delay unveiling the plan until after the inauguration.
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