Thursday, March 13, 2014

More Taxes than Meet the Eye in Obama’s Budget

CATO   Here are some of the tax hikes the president is proposing:
  • “Buffett tax” ($53 billion): President Obama resurrected this tax idea, which would require high-income individuals to pay at least 30 percent of their incomes in taxes.
  • Limiting tax deductions ($598 billion): President Obama would limit the value of itemized deductions for high-income earners.
  • Changes to the “death tax” ($131 billion): The president suggests going back to the estate tax rules of 2009, which would increase the marginal tax rate on estates and lower the exemption, subjecting more assets to taxation.
  • Changes to oil and gas taxation ($44 billion): Frequently criticized by the president, these tax provisions are generally not subsidies to oil and gas companies, but instead ameliorate the tax code’s improper treatment of capital expenditures.
  • Changes to international taxation ($276 billion): Instead of moving the United States to a territorial tax system like most other industrialized countries, the president moves in the opposite direction and proposes further raising taxes on corporations with overseas earnings.
  • Cap on 401(k) and IRA contributions ($28 billion): This provision would prohibit individuals from contributing to retirement accounts if their balances were greater than $3 million.
  • Increase in tobacco taxes ($78 billion): To pay for his universal pre-K proposal, President Obama would increase the tobacco tax from $1.10/pack to $1.95/pack.

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