Here are some notes on the tax proposals in the new federal budget: (See Table S-6; All figures are 10-year totals)
- There are $770 billion in “tax cuts for families and individuals.” However, the fine print on page 129 shows that $326 billion of that is actually spending, or the “refundable” portion of the tax changes. That leaves a net $444 billion in tax cuts for individuals.
- The budget would impose a $646 billion tax increase from new “climate revenues,” which would create a burden on families in the form of higher energy prices. Thus, there is a net tax hike on “families” of about $202 billion, even aside from the income tax increases at the top end.
- Income tax increases on those with higher incomes total $637 billion. Note that these hikes land on both individual filers and the huge number of small businesses that file through the individual system.
- Other tax hikes on businesses total a net $183 billion.
- Finally, Obama proposes to limit deductions for higher earners to raise $318 billion.
- Thus, President Obama proposes to hike taxes by a net $1,340 billion, or about $1.3 trillion, over the next decade. That’s the last thing we need to recover from recession and to compete in the global economy in coming years.