Republicans are already warning President Obama not to anticipate a warm embrace when he outlines in detail his new tax proposal during the State of the Union address Tuesday evening.
Rep. Jason Chaffetz (R-UT), chairman of the House Oversight and Government Reform Committee, on Sunday morning gave the president just a sampling of the GOP pushback sure to follow in the weeks and months ahead.
Calling the president’s idea a a non-starter, Chaffetz said on CNN’s State of the Union that the plan is “not the formula for this country to succeed.”
The proposal, unveiled on Saturday night, would raise an estimated $320 billion over the next decade by increasing the capital gains and dividends rate to 28 percent and closing the so-called trust fund loophole.
The revenue would go toward new programs and initiatives that Obama outlined over the past week aimed at the middle class, including $60 billion for free community college for millions of Americans, expanding access to broadband Internet, and expanding sick leave for all U.S. workers. The new initiatives come at a time of stagnant wage growth for the middle class.
Critics, however, say that raising taxes through Obama’s proposal will ultimately hurt small businesses and working families. The White House says the plan would only affect those earning $500,000 or more annually.
“We’re not just one good tax increase away from prosperity in this nation,” Chaffetz said Sunday morning. “We have to make sure we get a regulatory environment that’s predictable, that we bring those tax rates down and that we quit spending this money we don’t have.”
Other Republicans also weighed in. Brendan Buck, the communications director for new House Ways and Means Chairman Rep. Paul Ryan (R-WI), criticized the proposal Saturday, calling it “not a serious plan.”
“We lift families up and grow the economy with a simpler, flatter tax code, not big tax increases to pay for more Washington spending,” Buck said.
Sen. Marco Rubio (R-FL), said on CBS’s Face the Nation, “Raising taxes on people that are successful is not going to make people that are struggling more successful. The good news about free enterprise is that everyone can succeed without punishing anyone.”
Even as details of the new plan continued to circulate during this holiday weekend, Democrats expressed support for the plan as part of a larger effort to help the middle class.
“It’s clear that President Obama and Democrats are focused on reducing the economic squeeze being felt by the middle class and those working hard to join the middle class,” Rep. Chris Van Hollen, the ranking Democrat on the House Budget Committee, said in a statement. “I’m pleased that pieces of this proposal overlap with the plan I recently outlined.”
Jared Bernstein, former a chief economist for Vice President Joe Biden and currently a fellow at the Center on Budget and Policy Priorities, wrote in a post last night that Obama’s plan is “a set of smart tax ideas that go directly at aspects of the tax code that exacerbate wealth inequality, tax avoidance, and financial market volatility. Even better, he uses some of the revenue from these measures to provide incentives for work, education, and savings among the poor and middle class.”
Top Reads From The Fiscal Times: