News

Obama budget plan would boost U.S. tax revenue, cut deficits

Obama budget plan would boost U.S. tax revenue, cut deficits

BUDGET:Obama's budget plan is loaded with new policy changes, including an assumption that sweeping immigration reforms are enacted, producing a net 10-year deficit reduction of $158 billion. Photo: Reuters

WASHINGTON (Reuters) – President Barack Obama’s fiscal 2015 budget request would boost U.S. tax revenues by nearly $1.4 trillion over 10 years if fully enacted, slashing deficits by $1.05 trillion while funding new spending, the Congressional Budget Office said on Thursday.

There is virtually no chance that Congress will advance Obama’s plan in its entirety. But the CBO’s latest analysis will feed campaign messaging by both Democrats and Republicans ahead of congressional elections in November.

The analysis compares Obama’s request to a new “baseline” estimate that CBO released last week that assumes no changes to current tax and spending laws.

But Obama’s budget plan is loaded with new policy changes, including an assumption that sweeping immigration reforms are enacted, producing a net 10-year deficit reduction of $158 billion.

It proposes to boost revenues by limiting tax breaks for wealthy Americans and businesses, imposing a new tax on millionaires, raising tobacco taxes, and restoring estate and gift taxes to their previously higher, 2009 levels.

At the same time, it would boost spending by expanding cash tax credits for low-income Americans, canceling the “sequester” automatic spending cuts to military and domestic programs, and increasing funds for job training programs, among other changes.

Republicans, who last week in the House of Representatives passed an austere, 10-year balanced budget plan with deep domestic spending cuts and no tax increases, will focus their criticism on tax hikes in Obama’s plan. Democrats, who are basing their re-election campaigns on efforts to reduce the gap between rich and poor, are expected to highlight Obama’s proposals to aid the middle class and the poor.

The CBO analysis shows that Obama’s budget plan would increase deficits slightly relative to current law in fiscal 2014 and 2015, with deficits just above $500 billion in both years.

Deficits in later years of the 10-year budget window would begin to rise again in both Obama’s plan and the current-law CBO estimate as more of the Baby Boom generation retires and draws federal benefits. But deficits under Obama’s plan in those years would be lower than the CBO baseline as the new revenue measures gain steam.

(Reporting by David Lawder; Editing by Eric Beech)
Oba

Recent Headlines

13 hours ago in Entertainment

OPENING WEEKEND: ‘Mother’s Day,’ Key & Peele comedy ‘Keanu’ hit theaters

22-overlay-9

Here's a look at some of the films set to open this weekend.

13 hours ago in Entertainment

WHAT’S ON: New on Netflix, Amazon & Hulu this May

netflixAP

It's going to be a great weekend for some binge-watching.

15 hours ago in Entertainment

Alicia Vikander to play Lara Croft in ‘Tomb Raider’ reboot

vikanderREUTERS

The Swedish Oscar winner follows in the footsteps of Angelina Jolie to play the famed adventurer.

17 hours ago in Entertainment

‘Angry Birds,’ apps to go hand-in-hand at the movies

21-overlay-15

Creators of the upcoming "The Angry Birds Movie" movie will ask audiences to whip out their phones during the end credits and point them at the screen.

17 hours ago in Music

Lenny Kravitz, Queen Latifah to star in new Fox drama

queenlatifah771031325145

The show "Star" will feature newcomer actors Jude Demorest, Ryan Destiny and Brittany O'Grady as the singers.