<TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR>May 12, 2009
</TR><!-- headline one : start --><TR>Obama closes tax loopholes <!--10 min-->
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President Barack Obama wants to revamp the healthcare system and expand insurance to tens of millions of Americans who lack it. -- PHOTO: AP
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<!-- START OF : div id="storytext"-->WASHINGTON - THE Obama administration proposed on Monday to raise nearly US$60 billion (S$88 billion) by closing loopholes including those related to the estate tax, and also revived a bid to cap itemised deductions wealthy individuals can claim.
Funds raised from the estate tax and other changes would go to beef up a healthcare reserve fund, a US$634 billion pot of money. President Barack Obama wants to use to revamp the healthcare system and expand insurance to tens of millions of Americans who lack it.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>OTHER MEASURES
The Obama administration also revived a proposal to cap itemized deductions at no more than 28 per cent of income for taxpayers in the top two tax brackets.
Officials recalculated the revenue that would raise, about US$267 billion, down from an earlier US$320 billion forecast.
</TD></TR></TBODY></TABLE>The proposals 'take on what we believe are a series of unjustifiable loopholes, unjustifiable tax breaks that we simply can not afford', said a senior administration official, who could not be identified under the ground rules of a briefing for reporters.
The White House wants to raise US$24 billion over 10 years by tightening rules for the estate tax, a levy on the portion of inheritance that exceeds an amount excluded by law.
Currently, the first US$3.5 million of an individual's inheritance and US$7 million of a couple's inheritance are exempted. The Obama administration would change how assets are valued.
Lawmakers are likely to tackle the estate tax issue this year to avoid confusing changes over the next few years. The tax-cut package enacted under President George W. Bush provides for the estate tax to be repealed for fiscal year 2010 - Oct 1, 2009 to Sept 30, 2010.
If Congress fails to act, estate taxes in fiscal 2011 would revert back to levels that existed before Mr Bush took office. The exemption would fall to US$1 million and the top rate would move back to 55 per cent from the current top rate of 45 per cent. Republicans, who over the last several years unsuccessfully sought a permanent repeal of estate taxes, are likely to push the Democratic-controlled Congress to accept a higher exemption level and a lower rate, proposals strongly supported by small-business owners and farmers. -- REUTERS
</TR><!-- headline one : start --><TR>Obama closes tax loopholes <!--10 min-->
</TR><!-- headline one : end --><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
President Barack Obama wants to revamp the healthcare system and expand insurance to tens of millions of Americans who lack it. -- PHOTO: AP
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"-->WASHINGTON - THE Obama administration proposed on Monday to raise nearly US$60 billion (S$88 billion) by closing loopholes including those related to the estate tax, and also revived a bid to cap itemised deductions wealthy individuals can claim.
Funds raised from the estate tax and other changes would go to beef up a healthcare reserve fund, a US$634 billion pot of money. President Barack Obama wants to use to revamp the healthcare system and expand insurance to tens of millions of Americans who lack it.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>OTHER MEASURES
The Obama administration also revived a proposal to cap itemized deductions at no more than 28 per cent of income for taxpayers in the top two tax brackets.
Officials recalculated the revenue that would raise, about US$267 billion, down from an earlier US$320 billion forecast.
</TD></TR></TBODY></TABLE>The proposals 'take on what we believe are a series of unjustifiable loopholes, unjustifiable tax breaks that we simply can not afford', said a senior administration official, who could not be identified under the ground rules of a briefing for reporters.
The White House wants to raise US$24 billion over 10 years by tightening rules for the estate tax, a levy on the portion of inheritance that exceeds an amount excluded by law.
Currently, the first US$3.5 million of an individual's inheritance and US$7 million of a couple's inheritance are exempted. The Obama administration would change how assets are valued.
Lawmakers are likely to tackle the estate tax issue this year to avoid confusing changes over the next few years. The tax-cut package enacted under President George W. Bush provides for the estate tax to be repealed for fiscal year 2010 - Oct 1, 2009 to Sept 30, 2010.
If Congress fails to act, estate taxes in fiscal 2011 would revert back to levels that existed before Mr Bush took office. The exemption would fall to US$1 million and the top rate would move back to 55 per cent from the current top rate of 45 per cent. Republicans, who over the last several years unsuccessfully sought a permanent repeal of estate taxes, are likely to push the Democratic-controlled Congress to accept a higher exemption level and a lower rate, proposals strongly supported by small-business owners and farmers. -- REUTERS
