( CNN ) -- President Obama has characterized his 2014 budget , released Wednesday , not as his ideal vision for how much the federal government ought to tax and spend , but rather as a compromise that aims to respect the priorities of Democrats and Republicans . He has insisted that congressional Republicans see the policy options laid out in his budget as a package deal , not as a menu of policy options from which to choose . And so the president 's budget includes reductions in the planned growth of Social Security and Medicare spending , to appeal to conservative advocates of spending restraint , and a number of tax increases , the bulk of which are designed to affect high-earners , a high priority of the president 's congressional allies . House Speaker John Boehner and other leading congressional Republicans have made their opposition to further tax increases clear . But President Obama 's tax proposals nevertheless merit close attention , as they tell us a great deal about his priorities . One of the ways the Obama administration seeks to raise revenue is to have the federal government adopt chained CPI , a method of calculating consumer price inflation that factors in the fact that consumers tend to substitute some goods for others in response to rising or falling prices . Chained CPI has been discussed primarily with regards to its impact on federal outlays , and particularly Social Security spending , as it is expected to lead to somewhat lower cost-of-living adjustments that in turn will lead to somewhat lower Social Security benefit levels . Yet chained CPI will also lead tax brackets to be adjusted more slowly than they are under the federal government 's current inflation index . This adjustment is expected to yield roughly $ 100 billion in new tax revenues over the next decade . In addition , the president has revived two proposals that figured prominently in his 2013 budget : the so-called `` Buffett Rule , '' which requires that households earning $ 1 million or more pay a minimum of 30 % of their income in federal taxes , after allowing for charitable giving , and a limit on tax deductions for the highest-earning 2 % of households . The Buffett Rule essentially raises taxes on millionaires who earn long-term capital gains , as Alan Viard of the conservative American Enterprise Institute has explained . The downside of the Buffett Rule , according to Viard , is that it might discourage capital investment and increase reliance on debt financing . The limit on tax deductions , meanwhile , reduces the value of itemized deductions to the 28 % tax rate for households . That is , even as a household enters the 33 , 35 , and 39.6 % tax brackets , the value of its itemized deductions will remain at the lower 28 % rate . The president 's budget also calls for substantial increases in federal taxes on tobacco products , which are designed to fund new preschool efforts . President Obama 's tax proposals illustrate how difficult it will be to raise tax revenues by a substantial amount while shielding middle-income households from tax increases . Chained CPI and tax increases on tobacco products will almost certainly affect some number of households earning less than $ 250,000 a year , yet the Obama administration also intends to increase the size of the Earned Income Tax Credit and the Child Tax Credit , which will tend to mitigate any harmful effect . Capping the value of itemized deductions will raise a substantial amount of revenue . But it wo n't do as much as more ambitious proposals to limit individual tax expenditures , like converting tax preferences tied to marginal tax rates to nonrefundable tax credits . This approach , however , also runs into political pitfalls , as it will raise taxes on at least some middle-income households , even as it reduces them for large numbers of low- and middle-income non-itemizers . If President Obama hopes to build momentum for a substantial revenue increase , he would be well advised to cheer on the efforts of Sen. Max Baucus , D-Montana , and Rep. Dave Camp , R-Michigan , the chairmen of the tax-writing committees of the Senate and House respectively , as both are working toward a larger , more ambitious tax overhaul . Though Camp and his Republican allies are resistant to tax increases , they might prove more amenable if comprehensive tax reform results in lower rates . Back in 2011 , for example , the center-left Progressive Policy Institute released its `` Modified Zero Plan , '' which eliminated all tax expenditures but the Earned Income Tax Credit and the Child Tax Credit and lowered rates to 12 , 22 , and 28 % . Despite these substantially lower rates , revenues would increase , in part because capital income would be subject to the same tax rates as ordinary income . Of course , measures like the Buffett Rule would increase effective taxes on capital income even further . If Baucus and Camp converge around something like the Modified Zero Plan , the tax debate might finally break out of its current grim stalemate . The opinions expressed in this commentary are solely those of Reihan Salam .
Reihan Salam : President is casting his budget as one with bipartisan appeal . The White House has released a preliminary fiscal 2018 budget, which calls for deep cuts to federal spending and tax breaks that disproportionately benefit the wealthy. Parts of the Obama plan will affect middle-income taxpayers , too , he says . Salam : Budget shows difficulty of raising revenues without hitting middle class .