(Bloomberg News) President Barack Obama proposed a budget that calls on Congress to raise the taxes of the highest U.S. earners, multinational corporations and oil and gas companies, reviving revenue provisions that Congress has rejected or brushed aside before.

The budget, released today in Washington, would bring back pre-2001 tax rates on income and capital gains for individuals earning more than $200,000 annually and married couples making more than $250,000. The estate tax would return to 2009 levels with a $3.5 million per-person exemption and a 45% top rate. Under a law Obama signed in December, lower tax rates expire at the end of 2012.

"The president was unable to reverse the Bush tax cuts this past year with a majority in each house of Congress, so it's very difficult to see how he will be successful over the next two years with the Republicans firmly in control of the House," said Neal Weber, managing director in charge of RSM McGladrey's Washington national tax office.

The budget plan includes a proposal that would limit itemized deductions for top earners to 28%, curbing the value of tax breaks for charitable contributions, home mortgage interest and state and local taxes.

Under the budget's assumptions, federal revenue as a percent of the economy would increase from 14.9% in 2010 to 20% in 2021. Part of that increase stems from projected economic growth, not from policy changes.

Opposition

Republicans criticized the tax increases in the budget.

"This budget fails to preserve the pro-growth policies needed to expand our economy, create jobs and reduce the deficit," said Senator Orrin Hatch of Utah, the top Republican on the Finance Committee. "Keeping pace with its liberal tax- and-spend agenda, the Obama administration hits almost every sector of our economy with a tax hike-energy taxes, taxes on hiring, higher income taxes."

The plan identifies revenue from the itemized deduction cap as a way to offset the first three years of a "patch" that would prevent the alternative minimum tax from expanding. Last year, the administration did not propose offsets for the patch, and Congress has consistently rejected offsets to AMT changes.

By not permanently paying for limits on the reach of this tax, the administration adds to the budget deficit toward the end of the decade.

Obama again proposes limits on multinational companies' ability to defer income taxes on profits they earn outside the U.S. Corporations such as Microsoft Corp. and Cisco Systems Inc. have argued against the proposals in previous years. Those provisions would raise an estimated $129 billion over 10 years.

Oil, Gas Taxes

The budget would raise about $46 billion in proposals to change the tax treatment of oil, gas and coal companies. It reduces the impact of a "bank fee" to recoup the cost of the Troubled Asset Relief Program from $90 billion to $30 billion.

Obama has called for an overhaul of the corporate tax code that would lower rates and broaden the tax base. The international and energy tax increases in the budget plan were not accompanied by a rate cut or any details of an overhaul.

The budget revives a proposal that Congress pass legislation requiring executives of investment partnerships including private-equity firms to pay ordinary tax rates on the profits they receive as compensation. This pay, known as carried interest, currently can qualify for lower capital gains tax rates. The proposal would raise $14.8 billion over 10 years.

Scaled-Back Version

In making that proposal, the administration appears to be favoring a scaled-back version of the carried interest plan considered in the Senate last year. In his previous budget, Obama proposed more extensive limits on carried interest that would have raised $24 billion over 10 years.

Obama is proposing an array of tax incentives. They include the elimination of capital gains on some small business stock, a permanent extension of the tax credit for business research, and extension of a tuition tax credit. He is proposing to revive the Build America Bonds program, which expired at the end of 2010.

The administration also wants to send $250 this year to Social Security recipients and to some government employees who aren't benefiting from the payroll tax cut included in the December tax law.

The budget plan includes changes to simplify tax laws. For example, it would allow auto dealers to collect a $7,500 tax credit on the sale of plug-in electric cars rather than require buyers to wait until they file tax returns to claim the credit.

Minimum Withdrawals

Another provision would repeal a tax rule that requires retirees to take minimum withdrawals from individual retirement accounts with a balance of less than $50,000 after age 70½.

Obama also wants to revise an information-reporting requirement included in last year's health-care law that has drawn opposition from lawmakers of both parties and from small businesses. The law requires businesses to report payments to corporations totaling $600 for services and goods. Obama would still require the reports on Form 1099 for purchases of services, although not of goods.