The President will call for a $320bn increase in tax over the next ten years to help the middle class. He will seek to raise capital gains tax and dividends on couples making $500, 000 to the level under Ronald Reagan – to 28%.
Obama will also seek to eliminate a tax break on inheritance. The money raised will fund new tax credits for working families, expanding child care tax credit, as well as making college more affordable including his recent proposal to make community college free for all students. However, the tax increases are likely to be rejected at the Republican controlled Capitol Hill.