Think Tank Finds President’s Proposed Budget Raises Taxes on All
The Urban Institute and the Brookings Institute, two prominent American think tanks, jointly operate the Tax Policy Center (“TPC”), a project that focuses on tax policy. The TPC recently released its analysis of President Obama’s proposed budget for the federal government’s 2014 fiscal year. Not surprisingly, wealthier Americans bear the brunt of increased taxes, which is consistent with the campaign platforms the President ran on both times. The TPC found that the annual federal tax burden on a taxpayer with between $500,000 and $1 million in income would increase almost $9,000 under the President’s proposed budget. However, taxpayers with more than $1 million in income would see their taxes increase over $82,000. Higher taxes on the wealthy would be largely attributable to two provisions: imposing a minimum “Buffet” tax of 30 percent on millionaires and limiting deductions for taxpayers in the higher tax brackets.
What is perhaps surprising about the TPC’s report is that even lower-income Americans see their taxes go up, even if only by a tiny amount. The TPC report estimates that taxpayers with incomes below $200,000 would see their taxes increase anywhere from $18 to $149, depending on their income level and tax bracket. Much of the projected increase in lower-income Americans’ tax bills is attributable to a near-doubling of the federal tax on cigarettes set forth in the proposed budget. While the President has largely stuck to his promise to raise taxes only on the “wealthy,” his proposed budget makes clear that that does not mean tax relief for the non-wealthy.