Increase the capital gains and dividends taxes for higher-income taxpayers

Obama budget asks for capital gains and dividends tax increases

Updated: Thursday, February 26th, 2009 | By Angie Drobnic Holan

President Obama's Office of Management and Budget unveiled a broad outline of its plans for the 2010 budget on Feb. 26, 2009, highlighting investments in health, energy and education.

To pay for some of those items, Obama proposed allowing the Bush tax cuts to expire as scheduled on people who make more than $200,000 and couples who make more than $250,000. For those same income levels, he also plans to raise capital gains and dividends taxes to 20 percent from their current level of 15 percent.

It's not clear from the budget documents released whether the tax increases would go into effect in 2010 or 2011. We'll be looking for more detail in the weeks ahead.

But tax increases for capital gains are clearly part of Obama's budget proposal, which still must be approved by Congress. And Republicans are likely to oppose any effort to let any of the Bush tax cuts expire. So for now, we rate this promise In the Works.

Sources:

Office of Budget and Management, Budget Documents for Fiscal Year 2010 , accessed Feb. 26, 2009

Office of Budget and Management, Summary Tables , Table S-6, page 123, accessed Feb. 26, 2009

CSPAN, Peter Orszag briefs reporters on the 2010 budget plan , accessed Feb. 26, 2009