President Obama’s plan is similar to a tax proposal last year for banks with $50 billion of assets, but the new plan would expand the tax to large money managers and insurers, and potentially raise twice as much money. The idea has been popular among Democrats who believe the new rules would help the middle class.
In contrast, some Congressmen are engaged in debates over rolling back Dodd-Frank regulations to further aid the financial sector. Additionally, this so-called sector-only tax faces uncertain prospects on Capitol Hill where Republicans, a staunch opponent of tax hikes, controls both the House and Senate.
American will hear more about President Obama’s plans on his scheduled State of the Union speech Tuesday 9 p.m. EST.
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Max Chen contributed to this article.