Over the last two years, the president has regularly touted his fight to lower taxes for Americans. In fact, his latest budget proposal offered up today is being billed as a package of tough cuts. But buried within the budget’s rhetoric and numerous pages are actually a healthy amount of increases — tax increases, that is. 15 of them.
Here are the hidden increases:
- 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 capital gains and dividends rate from 15% to 20%
- 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
- Capping the value of itemized deductions at the 28% bracket rate. This will effectively cut tax deductions for mortgage interest, charitable contributions, property taxes, state and local income or sales taxes, out-of-pocket medical expenses, and unreimbursed employee business expenses. A new means-tested phaseout of itemized deductions limits them even more. This is a $321 billion/ten year tax hike
- New bank taxes totaling $33 billion over ten years
- New international corporate tax hikes totaling $129 billion over ten years
- New life insurance company taxes totaling $14 billion over ten years
- Massive new taxes on energy, including LIFO repeal, Superfund, domestic energy manufacturing, and many others totaling $120 billion over ten years
- Increasing unemployment payroll taxes by $15 billion over ten years
- Taxing management capital gains in an investment partnership (“carried interest”) as ordinary income. This is a tax hike of $15 billion over ten years
- A giveaway to the trial lawyers—not letting companies deduct the cost of punitive damages from a lawsuit settlement. This is a tax hike of $300 million over ten years
- Increasing tax penalties, information reporting, and IRS information sharing. This is a ten-year tax hike of $20 billion.