President Obama's budget proposes raising tax revenue above its historical average over the next decade in order to pay for federal spending. So where does all the new revenue come from? Tax hikes and tax-code changes on high earners, the energy industry, tobacco, and more.
The Cato Institute's Nicole Kaeding samples a few of the revenue raisers in the new White House budget plan:
- Buffet Tax" ($53 billion): President Obama resurrected this tax that would require high-income individuals to pay at least 30% of their income in taxes.
- Limiting tax teduction ($598 billion): President Obama would also 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 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 the rest of the industrialized world, the president proposes further raising taxes on corporation with overseas earnings.
- Cap on 401(k)/IRA Contributions ($28 billion): This provision would prohibit individuals from contributing to retirement accounts if the balance is 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.
The folks at Americans for Tax Reform have more detail on the energy tax changes here.