President Obama intends to take from the rich and give to the others with his new tax plan that will be a part of his State of the Union address.
By increasing taxes on capital gains and closing a number of breaks for the rich, this will help finance education, retirement and family benefits for other people.
That said, here are 3 important changes that is in Obama’s new tax plan:
#1: Capital Gains
From the current 25 percent with surcharges, Obama wants to increase the top rate to about 28 percent. Also, the number of number of things that will incur this tax will also be expanded. This will be done by revising what is known as a “stepped-down” basis.
#2: The Mitt-Romney loophole
Mitt Romney had about $21 million in a tax-preferred retirement account when he was working at Bain Capital. With the administration intending to go after these individuals who have large sums of money in these accounts, Mitt Romney will also be taxed further.
Since this account type is for working families to save for retirement, it would prevent any further contributions to an account once the balance reaches about $3.4 million. Obama will also expand tax breaks for small businesses that enroll their employees in retirement savings accounts.
#3: Bank Tax
In the plan, the administration intends to charge a seven basis point fee to the 100 of the nation’s biggest banks. In doing so, it will get them to think twice before planning to borrow heavily while also considering how these actions affect the economy as a whole.