The White House formally proposes to increase tax revenues by $1.6 trillion over 10 years by increasing top marginal income tax rates and taxes on both capital gains and dividends, and by limiting tax deductions for top earners, according to Republicans.
Obama proposes to reinstate the estate tax at its 2009 level, as well as patch the alternative minimum tax.
The administration asked Republicans to boost the economy, too, by either extending the payroll tax cut, or replace the holiday with a similar stimulus, such as the Making Work Pay tax credit in the Recovery Act. They also want to extend emergency unemployment benefits.
On top of that, the administration proposes $50 billion in new infrastructure spending, as well as a mortgage refinancing program. The plan would prevent automatic reimbursement cuts to physicians who treat Medicare beneficiaries, and would eliminate congressional control over the debt limit altogether.
In exchange, the administration proposes a tax reform proposal consistent with its $1.6 trillion in new tax revenues taken from top earners, and to cut 10-year deficits overall by $4 trillion, including $400 billion in savings from Medicare and Medicaid in Obama's budget.