Federal budgets are incredibly silly documents. GameStop preorders have more binding power. As such, their use is primarily a reflection of how a president would like to be seen by the people. In this case, President Obama has decided to be more politically careful than he has been in other areas of policy the past few months: he would like to be seen as a budget cutter, but a cutter of things that will not in any way tangibly change government or transfer ill effects to voters who do not already dislike his policies. It contains ridiculous steps, such as tabulating nearly $1 trillion in slated military funding at current levels for the wars in Iraq and Afghanistan which no one expected to be spent. It contains ridiculous assumptions, which skew the whole thing based on how favorably you think the economy will perform. It is therefore viewed, properly, as a math-heavy political brochure from the land of imaginary animals, like elves, gremlins, and Eskimos.
But let's pretend, just for the sake of argument, that Obama's budget is real. What would it do? Andrew Stiles explains:
“Under Obama’s proposal, federal spending will rise from $3.8 trillion in 2013 to $5.8 trillion in 2022, an increase of 53 percent. He plans to spend a total of $47 trillion over the next decade, adding a cumulative $6.7 trillion to the federal budget deficit. If enacted, the White House plan would increase the debt held by the public—the amount owed by American taxpayers—from $12.6 trillion to $19.4 trillion over that same period, a 54 percent increase. As a share of GDP, the public debt is projected to increase from 74.2 percent to 76.5 percent by the end of the 10-year budget window.”
And who gets hit by the new taxes? Americans for Tax Reform explains:
The tax rate at which the majority of small employer profits face taxation will rise. Under the Obama budget, the top marginal income tax rate (at which a majority of small employer profits will face taxation) will rise from 35% today to 39.6% in 2013.
The capital gains rate will rise from 15% today to 23.8% next year. That's because the Obama budget assumes the pre-2001 capital gains rate of 20% for investors earning more than $250,000 per year. On top of this, the Obamcare surtax on investment will raise this rate to 23.8%. Separately, capital gains earned as "carried interest" will be taxed at ordinary income tax rates.
- The dividends rate will raise from 15% today to 43.4% next year. The Obama budget proposes taxing dividends for investors making more than $250,000 per year at ordinary income tax rates, which will rise to a top rate of 39.6% under the budget. In addition, the Obamacare surtax on investors will combine to nearly triple the tax rate on dividends in just one year.
Jake Tapper has more here on how Obama's failed to meet the goals he promised when he first came to office. But again, this is just a math-heavy brochure. Don't take any of it seriously.Why are you making that face? It's not like it's your money.