On Tuesday, President Obama asked Congress for a short-term deficit reduction package.

"If Congress can't act immediately on a bigger package -- if they can't get a bigger package done by the time the sequester is scheduled to go in to effect -- then I believe they should at least pass a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester for a few more months until Congress finds a way," Obama said.

Steve Ellis, vice president of Taxpayers for Common Sense, discussed the proposal and other top tax topics with Capital Insider.