Analyst: Obama ups taxes for 1 in 4

WASHINGTON (AP) - President Barack Obama's latest budget would raise taxes next year on 1 in 4 households, but with little impact on families earning under $200,000 a year, a nonpartisan research group has estimated.

The Tax Policy Center analysis also said that about 1 in 8 households would get tax cuts, though few would go to families making over $500,000.

In an election year in which Republicans are eager to cast Obama and his fellow Democrats as thirsting for higher taxes to pay for big government, White House officials disputed some of the findings.

They said Obama's proposals would not boost taxes on any families earning under $250,000. They attributed the study's conclusion that some lower- and middle-class families would face higher taxes in part to researchers' decision to include the impact of Obama's plans to raise levies on some corporations, since many people own shares of companies.

"The notion that, if, for example, you cut subsidies for Exxon it will increase the taxes that a middle class family has to pay is simply false," said White House spokeswoman Amy Brundage.

Analysts at the center defended their assumption that higher corporate taxes ultimately affect individuals.

"We assume a corporate tax increase ultimately lowers families' returns from their investments," said Roberton Williams, a senior fellow at the center.

The study estimated that families earning under $200,000 would see tax increases or cuts averaging less than $60 a year.

But ever-higher tax increases would await better-off families.

Households making $200,000 to $500,000 would see an average tax increase of almost $2,800. That rises to an average $179,000 in higher taxes for those earning above $1 million.

Even so, the impact on families with the same ranges of income would vary, according to the analysis.

About 18 percent of families earning $75,000 to $100,000 annually would get tax cuts averaging $379. Yet 38 percent of families in that same income category would face tax increases of an average $127.

Obama would allow tax cuts first enacted under President George W. Bush to expire in 2013 for all but the highest-earning Americans.

Obama would also impose higher tax rates on some capital gains and dividends for upper income families, extend tax credits for lower earning workers and families, and curb some tax breaks for oil and gas companies and U.S. firms with business abroad.

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