Only Two Things Are Certain in Obama’s Budget: Debt and Taxes
NRCC - President Obama’s FY 2012 budget has attracted plenty of criticism for its failure to responsibly deal with the nation’s debt problem:
CBO: OBAMA BUDGET UNDERCOUNTS SPENDING BY $2.3 TRILLION: “President Barack Obama’s 2012 budget would produce $2.3 trillion more in deficits over the next decade than the administration projects, according to the Congressional Budget Office.
“The nonpartisan agency said today the administration’s plan would generate $9.5 trillion in deficits between 2012 and 2021, compared with the $7.2 trillion forecast last month by the White House budget office…
“The report also said the administration’s budget falls short of its goal of achieving ‘primary balance,’ which refers to the government balancing its books except for interest payments on the debt. White House Budget Director Jacob Lew had called that a ‘key accomplishment’ of its plan.” (Brian Faler, “Obama’s Budget Underestimates Federal Deficits, CBO Says,” Business Week, 3/18/2011)
BUDGET WILL “DOUBLE THE NATIONAL DEBT” TO $26.3 TRILLION: “If the federal budget released by President Barack Obama today is implemented, it will double the national debt over the next 10 years. The current national debt is $13.56 trillion (end of FY 2010). By the end of 2021, that debt would rise to $26.3 trillion under the White House budget.” (“Obama Budget Double National Debt to $26.3 Trillion in 10 Years,” Fox News, 2/14/2011)
Not only does Obama’s FY 2012 budget double-down on his spending binge of the last two years, it also attempts to mask that spending with a $1.5 trillion tax increase:
OBAMA INCREASES TAXES BY $1.5 TRILLION: “The budget calls for $1.5 trillion in tax increases over the next 10 years, with the bulk of that coming from allowing… tax cuts for couples earning more than $250,000 to expire.
“Another $300 billion would come from limiting the ability of the wealthy to take itemized deductions. It would also impose a $30 billion ‘financial crisis responsibility fee’ on banks, a $15 billion tax increase on the ‘carried interest’ paid to investment managers, and rescind a dozen tax breaks for the oil, gas and coal industry to raise more than $46 billion over 10 years.” (Roger Runninger and Brian Faler, “Obama’s $3.7 Trillion Budget Fight Sets Fight in Congress,” Bloomberg Businessweek, 2/14/2011)
These tax increases will be particularly felt by small businesses, many of which are taxed based on marginal tax rates, at a time when the economy is fragile:
SMALL BUSINESS AND DEATH TAXES RISE: “Raising the top marginal income tax rate (at which a majority of small business profits face taxation) from 35% to 39.6%. This is a $709 billion/10 year tax hike. …
“Raising the death tax rate from 35% to 45% and lowering the death tax exemption amount from $5 million ($10 million for couples) to $3.5 million. This is a $98 billion/ten year tax hike.” (“Obama’s FY2012 Budget: Taxes, Taxes, and More Taxes,” Americans for Tax Reform, 2/14/2011)