The State of the Union address from President Barack Obama is set to focus on closing tax loopholes within the system.
The President is set to outline ways in which some of the wealthiest American companies and businesses will be forced to pay higher taxes in a plan that is hoped to bring in billions of dollars to the state.
According to a report by Reuters the State of the Union address will be outlining how tax loopholes will be tightened while also imposing a fee on big financial firms with this money then being used to benefit members of the middle class according to senior administration officials.
The annual address from President Obama is to take place on Tuesday to a joint session of Congress and the theme of income equality is set to loom large.
While the president is facing difficult times politically, it is hoped that his address will garner bipartisan support within the Republican-dominated House of Representatives and Senate.
According to Reuters, the proposals administration officials listed may still generate significant opposition from the Republicans because they would increase taxes.
Reuters said that in a conference call with reporters to preview the taxation aspect of Obama’s address, one official said some of the ideas the president is outlining already have “clear congressional bipartisan support or are ideas that are actually bipartisan in their nature.”
Obama’s proposals call for reforming tax rules on trust funds, which the administration called “the single largest capital gains tax loophole” because it allows assets to be passed down untaxed to heirs of the richest Americans.
It is also said that the plans include the raising of capital gains and dividends rates to 28 percent, the same level which was seen during the 1980s Republican presidency of Ronald Reagan.
The Obama administration feels that the combination of the changes to trust funds and to capital gains, alongside proposed the fee on big financial firms, would potentially generate about $320 billion over a 10 year period.
This extra much needed cash would then be used by Obama to pay for benefits that the administration wants to provide for the middle class, the official said making it a proposal that will be hard not to support, especially when a Presidential election is on the cards.
“We’re proposing more than enough to offset the new incremental costs of our proposals without increasing the deficit,” the administration official concluded.