Obama Tax Agenda Widens Partisan Gulf As He Seeks Redistribution

‘More Progressive’

Now, “it’s much more focused on getting revenue for key investments and making the tax code more progressive,” said Kamin, an assistant professor of law at New York University.

“It’s a very good start in terms of where the discussion ought to go,” said Senator Charles Schumer, a New York Democrat. “Middle-class incomes are declining, and we have to do something about it.”

The policies drew immediate Republican opposition.

“One goal of tax reform is to lower marginal rates, reduce a lot of the underbrush and the deductions and credits and the like,” said Senator John Cornyn, a Texas Republican. “And he’s talking about making it more complicated. We ought to make the tax code simpler, fairer and flatter, and he’s doing the opposite.”

Education Breaks

Obama’s plans include some simplification, such as the consolidation of multiple tax breaks for higher education.

In some ways, he’s returning to the tax principles he set out early in the 2008 campaign, before the financial crisis and recession, said Douglas Holtz-Eakin, who was a policy adviser to Republican John McCain’s 2008 presidential campaign.

“First, it feels like giving up on genuine economic growth improvement and relying on a tax transfer scheme for well- being,” he said. “Second, there is a lot of talk about tax reform, but this is cherry-picking what should be elements of a complete plan and gets in the way of real reform.”

Obama’s proposals are more likely to set the Democratic Party’s tone for the 2016 election than become the basis for a law.

By that measure, he’ll be just one voice -- though a loud one -- as Democrats formulate their tax-policy ideas. His plan is still tamer than one released this month by Representative Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee.

Van Hollen’s proposal includes a $1,000 tax credit for middle-income workers and a tax on financial transactions.

Obama is seeking to use the tax code to achieve goals that could also be accomplished with spending programs for child care and education, said Ed Kleinbard, a tax law professor at the University of Southern California.

“This is not tax reform, and to criticize it for being ineffective tax reform is unfair, because that’s not the purpose,” said Kleinbard, former chief of staff of the congressional Joint Committee on Taxation. “The purpose of this is to invest in the next generation.”