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Obama wants to raise taxes on the rich and on banks to pay for his new budget

Feb 9, 2016, 23:49 IST

U.S. President Obama reacts at a meeting with students from the Young Southeast Asian Leaders Initiative at Taylor's University in Kuala LumpurThomson Reuters

President Barack Obama is calling for higher taxes on the wealthy and on big banks in his final budget proposal, released on Tuesday.

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The plan also calls for billions of dollars to be committed to clean energy, education, healthcare, and the fight against the Islamic State terror group.

Some of the new taxes include, most prominently, raising the top rate on capital gains to 28%. Another provision would require millionaires to pay at least 30% of their income in taxes, and a new fee "on the largest financial firms on the basis of their liabilities," the proposed budget stated.

Obama's budget also proposed a new $10-a-barrel tax on oil.

Those increased taxes and fees would help to pay for the more than $4-trillion budget that again focused heavily on funding the fight against ISIS and Obama's initiatives in the education and healthcare sectors, in addition to staving off the effects of global warming.

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The budget also projected a $2.9-trillion reduction in the federal deficit over 10 years.

Although the budget has already been met with opposition from Republican leaders, the White House said it is abiding by discretionary caps on spending for fiscal year 2017 set by last year's budget agreement with Congress.

"The Budget makes critical investments in our domestic and national security priorities while adhering to the bipartisan budget agreement signed into law last fall, and it lifts sequestration in future years so that we continue to invest in our economic future and our national security," the White House said in a statement. "It also drives down deficits and maintains our fiscal progress through smart savings from health care, immigration, and tax reforms."

Here are some of the spending initiatives Obama has proposed:

  • $320 billion over 10 years to build a "clean" transportation system
  • $7.7 billion for clean energy research and development
  • $1 billion for Obama's "Moonshot" cancer initiative he tasked Vice President Joe Biden with leading during his 2016 State of the Union address
  • $33.1 billion in biomedical research
  • $1.3 billion to adapt clean energy sources
  • $1.3 billion to help advance the Global Climate Change Initiative
  • $9.6 billion for Obama's "Head Start" education program
  • $4 billion over three years for a new Computer Science for All initiative
  • $19 billion for federal cybersecurity resources
  • $11 billion to combat ISIS
  • $4.3 billion to counter Russian aggression

Republicans were quick to denounce the proposed budget.

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The Republican-controlled House and Senate Budget Committees also said in a joint Thursday statement that they wouldn't be inviting Obama's budget director to Capitol Hill to discuss the president's budget.

On Friday, White House Press Secretary Josh Earnest compared that contempt to Republican presidential candidate Donald Trump's refusal to participate in one of last month's GOP debates.

You can view the full budget here.

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