President Barack Obama rarely misses a chance to call on upper-income Americans to pay more taxes.
But his annual budget is doing more to target middle-class taxpayers than any of his previous proposals, calling for caps on deductions, changes in the way some tax benefits are calculated and a big hike in cigarette taxes — all proposals that would make middle-class Americans pay more.
Obama’s budget is still being picked apart on Capitol Hill, but his openness to an even wider range of tax increases will frame the coming fiscal debates.
“It’s a new paradigm,” said Bob Williams, a senior fellow at the nonpartisan Tax Policy Center. “This is the first budget he’s presented that has proposed raising taxes on people below the $250,000 thresholds he’s maintained over the past five years.”
It also has some Democrats worried, especially those who represent districts where their constituents make a good salary but don’t see themselves as rich stand to get hit.
“It’s a concern,” Rep. Allyson Schwartz, a Pennsylvania Democrat who represents some of Philadelphia’s suburbs, told POLITICO in reference to Obama’s proposed deduction cap. “For many people, the mortgage tax deduction is your biggest deduction. It’s very significant. And just as the housing market is coming back, there’s a question about the timing of that.”
Republicans are lapping up the proposals as evidence — despite Obama’s rhetoric — the administration won’t spare the middle class from higher taxes.
“The president keeps breaking his campaign pledge to not tax the middle class — first with his health care law and now with these tax hikes in his budget,” Utah Sen. Orrin Hatch, the top GOP member on the Finance Committee, told POLITICO. “As I’ve said before, when it comes to this White House and its penchant for wanting to raise taxes, everyone — including those middle-class families the president says he wants to help — needs to watch their wallets.”
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