Well Over $1 Trillion in Taxes Proposed in Obama Budget
February 17, 2015
President Barack Obama has released his FY 2016 budget and it should come as no surprise that he intends to continue his call for increased spending across a broad range of areas. This includes an overall increase of 7 percent, or $74 billion in additional taxpayer dollars above the cap signed into law by him with the 2011 Budget Control Act. “This includes $530 billion on the non-defense discretionary side, an increase of $37 billion over the spending caps, and $561 billion in defense spending, an increase of $38 billion over the spending caps,” a White House official told the media.
However it is not the increased spending that should worry CapitolWatch supporters, but the myriad of taxes he has proposed. These taxes aim to raise well over $1 trillion in new revenue for the U.S. Government. This comes on the heels of a record fiscal year, where the government collected the most tax revenue ever in its history. In FY 2014, inflation-adjusted federal tax revenues hit a record $3.02 trillion. The largest share of the tax revenue came from individual income taxes, which totaled $1.394 trillion, while the rest was a mix of corporate, excise, gift and other taxes. Despite this record haul, the federal government still ran a $483 billion deficit.
So what does the president propose to enlarge the government’s coffers? First off, he wants to limit the value of itemized deductions, including mortgage interest for certain taxpayers, which would raise $640 billion. Next, they would increase the top rate on capital gains taxes, adding $208 billion in new money. Then, he would like to nearly double the federal excise tax on tobacco, raising an additional $95 billion a year. Finally, the president has plans to increase taxes on corporations which would be two-fold: a one-time repatriation tax to raise $268 billion, and an annual tax on global profits going forward which would raise roughly $206 billion each fiscal year.
The president’s FY 2016 budget rings in at $4 trillion in spending for the fiscal year. So even with all of his proposed taxes and new revenue, the nation would still be running a deficit. Luckily, the president’s budget is non-binding. This leaves Congress to set and approve its own budget for the year. It is highly unlikely for the now GOP controlled Senate and the GOP controlled House to begin enactment of this busted budget, but it should serve as a sign of where the president and his team is in their thinking when it comes to the final two years of his administration.