President Obama to propose middle class tax cut at State of the Union

President Barack Obama will use his State of the Union address Tuesday to call on Congress to fund a series of tax cuts for the middle class by raising taxes on the wealthiest taxpayers and largest financial institutions, senior administration officials announced Saturday. + The proposal includes tax credits for middle-class families and students, including a new tax break for two-earner families, a tripling of the child tax credit and expanded education tax breaks that would affect 8.5 million families and students. + Funding for Obama's proposed reforms would come from closing a "trust fund loophole" that benefits the wealthiest Americans, raising the top capital gains and dividend rate back to 28% and reforming financial sector taxation. + Altogether, the new tax benefits for middle-class families would cost $175 billion over 10 years, according to the administration. This is on top of the $60 billion price tag for Obama's proposed plan to make community college tuition free for two years for millions of American students. + Will this actually happen? Probably not: As the New York Times notes, the administration's tax proposal faces "long odds" in the Republican-controlled Congress, led by lawmakers "who have long opposed raising taxes and who argue that doing so would hamper economic growth at a time the country cannot afford it." + Republicans are already voicing their opposition: "The president needs to stop listening to his liberal allies who want to raise taxes at all costs and start working with Congress to fix our broken tax code," Republican Sen. Orrin Hatch, the Senate's top tax law writer, told Reuters.