Sunday, January 18, 2015

Obama to Call for Billions in New Taxes

At his State of the Union address, President Obama plans to call for billions in tax increases – including a hike in investment tax rates, according to various reports.

During the address, the President will call for $320 billion in tax increases over 10 years. It will include a call for eliminating a tax break on inheritances.

The centerpiece of the president's tax proposal is an increase in the capital gains and dividends rate on couples making more than $500,000 per year to 28 percent.   The top capital gains rate has already been raised from 15 percent to 23.8 percent during Obama's presidency.

Obama also wants to close what the administration is calling the "Trust Fund Loophole," a change that would require estates to pay capital gains taxes on securities at the time they're inherited.

As usual, the tax increases proposed are portrayed as hitting only the super-rich. Don't believe it for a minute. Indeed,  any tax increases that come out of the Republican congress, it will be labeled "tax reform" that will be all about increasing taxes wherever Republicans think they can get away with it.

The President will deliver his address Tuesday night.


  1. Does anyone know if Obama’s call to end the stepped up basis for inherited assets applies only to “securities” or to all capital assets (such as land). Whatever; this proposal would amount to “triple" or "quadruple" taxation” as the deceased would have paid income taxes on his profits flowing from this capital all his life at one or more levels; his estate would pay a death tax of up to 43% or thereabout, and then his heirs would have to put an inherited asset on their books, not at its actual market value, but its value back when Pop or Grand-Pop purchased the property. It certainly does not promote the stated purpose of helping the poor somehow (after all the money would flow to DC) and would add to the sclerosis of capital markets.

    1. Don't worry, Obama will be fine.

    2. Not to take from your point, but as a former Big 8/6/4 tax professional, testamentary taxes are only paid by those estates where the deceased failed to plan. I don't care what Obama proposes or the Repubs enact, the final laws will be written to make sure that estate and gift tax professionals can navigate their clients through the legal maze to avoid having their estates hit with high taxes upon their death. And you can bet that tax professionals are loving Obama's proposal since higher tax rates means expensive structuring (more fees) can be justified.

  2. Oh its a very sad new about the people which are living in this state and these taxes impose on every person that living in this state and it comes to an issue for the middle class families to pay the Tax.Nice work done on this blog, its very interesting and informative.However if you want to know more about finance ad taxes so side a look on tanner mainstain.