Obama Budget Raises Taxes for 27% of Households, Report Says
President Barack Obama’s 2013 budget plan would raise taxes for 27 percent of U.S. households in 2013, far more than the administration estimates, according to a nonpartisan study.
Obama focuses the tax increases in his 2013 budget on corporations and the top 2 percent of individual taxpayers. The result in the center’s study stems from the fact that taxpayers in all income brackets own parts of corporations.
“There are enough corporate tax increases in the president’s plan to have a measurable impact on the distribution,” said Roberton Williams, a senior fellow at the center, which is frequently cited by members of both parties for its work.
Most of the additional tax burden imposed by Obama’s budget plan would fall upon the highest-earning taxpayers.
Compared with current tax policy, under Obama’s budget proposal, 98.4 percent of people earning more than $1 million would see their taxes increase next year by an average of $184,504.
In contrast, 31.6 percent of U.S. households earning between $50,000 and $75,000 a year would see an average tax increase of $92. In that same income group, 16.8 percent of households would have a tax cut averaging $382.
The report reflects a modeling assumption about corporate taxes, and the administration’s budget doesn’t raise taxes on any family making less than $250,000, said Amy Brundage, a White House spokeswoman.
“What it does do is close a series of wasteful and unaffordable corporate tax subsidies, which include, for example, ending the expensive tax subsidies for oil and gas production and incentives to companies to ship jobs overseas,” she said in an e-mail.
Obama’s budget would raise marginal tax rates to a maximum of 39.6 percent, up from 35 percent. High-income taxpayers would also face higher rates on investment income and limits on deductions.
For low-income and middle-income taxpayers, Obama would extend policies from the 2009 stimulus law that expanded tax credits for parents and college tuition. The budget also would extend expiring income tax cuts for most taxpayers.
The budget would impose restrictions on multinational corporations’ ability to defer U.S. taxes on income earned outside the country. Oil and gas companies would lose several breaks.
“The notion that if, for example, you cut subsidies for Exxon, it will increase the taxes that a middle-class family has to pay is simply false,” Brundage said.
Economists debate how the burden of the corporate tax is distributed between labor and capital.
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