Obama Budget Will Seek to Increases Taxes on Wealthiest to Help Out the Rest
Posted Feb. 26, 2009, 10:45 AM ET
President Obama will unveil his fiscal year 2010 budget proposal Feb. 26 which would fulfill a campaign pledge by reinstating the top marginal tax brackets beginning in 2011, according to sources in the Washington lobbying community and on Capitol Hill familiar with the numbers.
Specifically, the budget would reinstate the 36 percent and 39.6 percent rates for taxpayers earning over $200,000 for single filers and $250,000 for joint filers. It also would reinstate the personal exemption phaseout and limitation on itemized deductions; and impose a 20 percent rate on capital gains and dividends for the same group of taxpayers. Some of the provisions would be used to pay for a $634 billion reserve fund for health care reform.
According to the tables obtained by BNA, the budget also will seek to make permanent the recently enacted Making Work Pay tax cut of $400 for individual filers and $800 for joint filers as well as a provision reducing the earnings threshold for the refundable portion of the child tax credit. On the business side, the budget seeks to make permanent the research and development tax credit and expand the net operating loss carryback provision.
To offset many of these tax measures, beginning in 2011, the budget would tax carried interest as ordinary income, reinstate Superfund taxes, repeal the last-in, first-out method of accounting, implement international enforcement, reform deferral, and other tax reform policies, repeal the tax code Section 199 manufacturing deduction for oil and natural gas companies, and repeal the percentage depletion for oil and natural gas from marginal properties. The budget blueprint also includes language codifying the economic substance doctrine.
Obama's submission includes provisions that would implement a cap-and-trade system and use some of the funds raised to offset the cost of extending the Making Work Pay credit beyond 2010.
According to sources, the budget projects an almost $7 trillion shortfall between receipts and spending over its 10-year forecast window, including a $1.752 trillion deficit in the current fiscal year. In the budget outline to be released later Feb. 26, the 2010 deficit would total about $1.171 trillion, the sources said, but Obama would still meet his goal of cutting the deficit in half by 2013, with a projected $533 billion shortfall. That would still be larger than the current nominal record for a deficit, 2008's $454.8 billion.
The turkey tetrezzini was amazing! 
. or maybe medications made it all taste creepy. 
