Budget resurrects rejected tax hikes

Associated Press

WASHINGTON

President Barack Obama’s budget proposal resurrects a series of tax increases on certain corporations and the wealthy that largely were ignored by Congress when Democrats controlled both chambers. Republicans, who now control the House, are signaling they will be even less receptive.

The plan unveiled Monday includes tax increases for oil, gas and coal producers, investment managers and U.S.-based multinational corporations. The plan would allow Bush-era tax cuts to expire at the end of 2012 for individuals making more than $200,000 and married couples making more than $250,000. Wealthy taxpayers would have their itemized deductions limited starting in 2012, including deductions for mortgage interest, charitable contributions and state and local taxes.

Limiting those deductions would raise an additional $321 billion over the next decade. That money would be used to spare more than 20 million middle-income taxpayers from getting hit with a big tax increase from the alternative minimum tax for three years. Congress routinely passes a fix each year to spare middle-income taxpayers from the alternative minimum tax, but the cost usually is added to the budget deficit through increased borrowing.

“What we’ve done here is make a down payment, but there’s going to be more work that needs to be done, and it’s going to require Democrats and Republicans coming together to make it happen,” Obama said.

Obama’s proposal would extend tax credits for college expenses and expand them for child care. A more- generous Earned Income Tax Credit for families with three or more children would be made permanent.