Presidents Budget: Two Months Late and Trillions of Dollars Short
4/12/2013 6:54:00 AM
The Obama fiscal year 2014 proposed budget was not just a day late and a dollar short â it is two months late and trillions of dollars short.
The budget calls for more spending and more taxation than the Congressional Budget Office baseline, and it leaves the debt-to-GDP ratio at 73% ten years from now. This modest projected 1% percentage improvement to the current 74% debt-to-GDP ratio occurs only because of dramatic increases in taxes and overly optimistic economic assumptions.
Let's look at taxes first. The president's budget contains nearly $1.1 trillion in new taxes over ten years on businesses of all sizes. Many of these proposed tax hikes are the same old tired proposals that have gone nowhere in Congress.
They include $583 billion in tax increases on successful individuals and small businesses. And don't forget that this amount is in addition to more than $600 billion of new taxes over 10 years already in effect as a result of the fiscal cliff legislation passed at the beginning of the year. In addition, the president calls for a $16 billion tax hike on investors and hedge fund managers and a $59 billion on banks. Hiking taxes on job creators, successful business owners, and people and institutions that invest in promising companies is no way to encourage growth and innovation.
American companies that do business globally are also targeted by the president's budget. They would face $157 billion in new taxes over tenyears, up from $148 billion in the president's budget from last year. In addition, the president one again reiterates his support for an international minimum tax, which he championed in his 2012 tax reform white paper.
What's more, the president continues to embrace a worldwide systemof taxing income, which potentially subjects overseas income to double taxation,despite urgings from the business community, the President's now disbandedJobs Council, and his Export Council to adopt a territorial system of taxation. We are the last major industrialized country with a worldwide system. Having theworld's highest corporate tax rate AND being the only major industrializedcountry with a worldwide tax system hurts our competitiveness.
And, once again this year, the Obama budget has it out for oil, gas, and coal companies, which collectively would see tax hikes of $44 billion over ten years.