February 26, 2009 2:32PM # Obama’s $1.3 Trillion Tax Hike By [Chris Edwards](https://www.cato.org/people/chris-edwards) --- SHARE Here are some notes on the tax proposals in the [new federal budget](http://www.whitehouse.gov/omb/assets/fy2010_new_era/A_New_Era_of_Responsibility2.pdf): (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. ##### Related Tags [Government and Politics](https://www.cato.org/government-politics), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).