President Barack Obama said Tuesday that his health plan would cost $716 billion over a decade, with the promise of an even bigger tax cut in the final years of his term.
Obama’s plan, which he unveiled in June, was hailed as the largest tax cut since Reagan’s tax cuts in 1986.
The White House said the $719 billion would come from cutting the corporate tax rate to 21 percent from 35 percent, ending a 25-year tax break for companies that move overseas, cutting the estate tax and cutting the personal tax rate from 39.6 percent to 25 percent.
“We can take this massive tax cut and pay for it with new revenue, with savings in Medicare, Medicaid and other vital programs,” Obama said in a statement.
He also said the tax cuts would create “millions of new jobs.”
“My plan will create millions of new, good-paying jobs, and it will pay for itself,” he said.
In a statement, Republicans blasted the plan as a giveaway to the rich.
Republicans have accused Obama of making his tax cuts conditional on Republicans passing legislation to raise taxes on wealthy Americans, including the wealthy’s heirs, and Democrats passing legislation that would reduce the tax rate on capital gains and dividends.
Some Republicans have argued that Obama’s tax plan would lead to a loss of jobs and the economic recovery, but Obama has argued that his plan would create jobs and raise taxes for the middle class.
White House spokesman Josh Earnest defended the president’s plans, saying they are aimed at creating jobs and improving the health of the economy.
Earnest said the president is taking steps that are in the national interest.
“The president has made clear that he is committed to bringing the economy back from the brink of a new recession and he is making those commitments in his budget,” he told reporters.
Democrats have attacked the president for not using the “tax cuts” as a catch-all for all spending cuts.
But the tax increases in Obama’s budget will affect the poorest Americans, who have been hit hard by the collapse of the U.S. economy.
Obama said the plan would raise $9.4 trillion over 10-year periods, more than half of the $6.2 trillion increase in federal revenue over the last 10 years.
It will raise $3.6 trillion from the sale of Medicare and Medicaid, $1.5 trillion from closing loopholes, $7 billion from repealing the Alternative Minimum Tax, and $2.6 billion from ending deductions and credits for certain expenses.
This is an effort to ensure that we have enough revenue to pay for essential programs, and also make sure that we can pay down the debt,” Obama told reporters Tuesday.
Critics have also charged that the tax breaks would disproportionately benefit the wealthy, saying that middle-class Americans are disproportionately affected.
House Speaker John Boehner said the Republican Party is ready to put its plans on the floor to show that we will not stand for a tax cut for the rich that does not grow the economy.”
The president’s budget would raise more than $9 trillion over the next decade, and nearly $7 trillion from repealing a $1,000 tax credit for people who take time off work to care for a loved one.
Senate Majority Leader Mitch McConnell, R-Ky., said the GOP plan would make health care even more unaffordable for millions of Americans, with nearly half the tax credits eliminated.