*Update added spending summary* (ATR) — President Obama released his budget this morning. Rather than focusing on Washington’s over-spending problem, the budget calls for higher taxes on families and small businesses to pay for even more government spending. Under the Obama budget, tax revenues will grow from 14.4% of GDP in 2011 to 20% of GDP in 2021. By comparison, the historical average is only 18% of GDP. 
Tax hike lowlights include:

  • •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.

Add it all together, and this budget is a ten-year, $1.5 trillion tax hike over present law. That’s $1.5 trillion taken out of the economy and spent on government instead of being used to create jobs.  (Full article)
(From National Review) Here is President Obama’s budget for fiscal year 2012 (and outlook through 2021). And here is a look at some of the numbers that stand out:

  • $3.73 trillion — total spending this year (25 percent of GDP, highest levels since World War Two).
  • $46 trillion — total spending over the next decade.
  • $8.7 trillion — total new spending over the same period.
  • $26.3 trillion — Total new debt, including entitlement obligations, predicted by 2021.
  • $7.2 trillion — Total deficit predicted by the end of the decade.
  • $1.1 trillion — How much the White House estimates the proposal will reduce the deficit over the next ten years.
  • $4 trillion — How much the president’s deficit commission recommended reducing the deficit over the next ten years to avoid financial catastrophe.
  • $1.6 trillion — The projected annual deficit for 2011 (11 percent of GDP), up from $1.3 trillion in 2010.
  • $2 trillion — Amount the budget will raise taxes on business and upper-income families over the next ten years, which includes letting the Bush-era tax rates expire in 2012 (for incomes $250,000 and up).
  • $50 billion — Amount the administration plans to spend this year on infrastructure and transportation “investments.”
  • $30 billion — Amount dedicated to a “National Infrastructure Bank to invest in projects of regional or national significance to the economy,” including the much-touted high-speed rail initiative.
  • $77.4 billion — Funding allocated for the Department of Education, a 22 percent increase from 2010 levels, and a 35 percent increase from 2008 levels.
  • $29.5 billion — Total spending on the Department of Energy, a 22 percent increase from 2008 levels.
  • $9.9 billion — Funding allocated for the Environmental Protection Agency (EPA), a 30 percent increase from 2008 levels.
  • $150 billion — Total amount the White House plans to spend next year on research and development programs.
  • 8.2 percent — Predicted unemployment rate in 2012.

Zero — Political risk the president was willing to assume by proposing meaningful reform to entitlement programs. That said, Republicans haven’t exactly been willing to stick their necks either, at least not yet.

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