When he released his new budget proposal on February 1, President Barack Obama asserted that the government “simply cannot continue to spend as if deficits don’t have consequences; as if waste doesn’t matter; as if the hard-earned tax dollars of the American people can be treated like Monopoly money; as if we can ignore this challenge for another generation.”
Yet the President’s new budget does exactly that — raising taxes by $3 trillion and federal spending by $1.6 trillion over the next ten years. If enacted, this budget would increase the 2010 deficit to more than $1.5 trillion, and leave a deficit of more than $1 trillion even after an assumed return to peace and prosperity. Overall, the President’s budget would double the national debt over the next decade, says Brian M. Riedl, an economist with the Heritage
President Obama’s budget would:
- Permanently expand the federal government by 3 percent of gross domestic product (GDP) over 2007 pre-recession levels.
- Raise taxes on all Americans by nearly $3 trillion over the next decade.
- Raise taxes for 3.2 million small businesses and upper-income taxpayers by an average of $300,000 over the next decade.
- Borrow 42 cents for each dollar spent in 2010.
- Run a $1.6 trillion deficit in 2010–$143 billion higher than the recession-driven 2009 deficit.
- Leave permanent deficits that top $1 trillion as late as 2020.
- Dump an additional $74,000 per household of debt into the laps of our children and grandchildren.
- Double the publicly held national debt to over $18 trillion.
A nearly $1 trillion tax increase is reserved for couples earning more than $250,000 and individuals earning more than $200,000, says Riedl. Beginning in 2011, the President’s
budget will increase these Americans’ taxes by:
- Raising the top two income tax brackets from 33 percent to 36 percent, and from 35 percent 39.6 percent ($364 billion).
- Raising capital gains and dividends tax rates from 15 percent to 20 percent ($105 billion).
- Phasing out personal exemptions and limiting itemized deductions ($208 billion).
- Reducing the value of tax deductions by approximately one-fourth ($291 billion).
Source: Brian M. Riedl, “Obama’s $3,000,000,000,000 Tax Hike,” Wall Street Journal, March 10, 2010.