President Obama has released his FY2016 budget request, a giant document plopped onto desks in Congress this morning, signaling the president's spending priorities for the next 10 years.
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The document is more of a wish list than anything else. Congress, not the president, drafts federal spending plans, and although presidents make a big fuss over their budget requests each year, Congress often summarily discards them before doing its own thing.
Nonetheless, Obama's FY2016 signifies his vision for how tax dollars should be allocated. In Obama's ideal budget world, there are winners and losers.
1. The poor. President Obama has made a platform out of "middle-class economics." That was the title of a White House fact sheet on the FY16 budget proposal, and it was a theme in his State of the Union address, where he previewed a lot of the budget ideas put to paper today.
But it's the poor who would truly benefit from Obama's tax plans, according to the nonpartisan Tax Policy Center, a joint venture of the left-leaning Brookings Institution and The Urban Institute:
Among the juiciest of Obama's proposals to benefit low-income Americans are a $500 tax credit for households that have two earners, expanded child-care access and two free years of community college.
2. The middle class. "Middle-class economics" is the theme of Obama's fiscal agenda, and his budget lives up to that billing with a slew of proposals. The most notable might be a new child tax credit of up to $3,000 per child, but an expansion of the Earned Income Tax Credit would include workers without children, another potential boon for middle-class Americans.
3. The construction industry. A big focus of this budget is infrastructure spending. In July, Congress funded transportation projects through May, but this budget would provide for a longer-term solution on infrastructure spending by imposing a tax on U.S. companies' overseas revenues. Republicans and Democrats both like infrastructure spending, but they've feuded (like they have with almost everything) over how to pay for that spending. Obama's solution isn't likely to gain traction with GOP lawmakers, but it would benefit firms that work on roads and bridges.
4. Parents. A tax credit of up to $3,000 per child would help them out.
1. The rich. Wealthy Americans could look forward to a barrage of new taxes to pay for Obama's middle-class agenda, among them a new capital-gains tax (i.e., a tax on investments) realized at death. According to the Tax Policy Center, 99.6 percent of Americans in the top 1 percent of incomes would see their tax burdens rise.
2. Businesses that make money overseas. Overseas corporate profits are a bipartisan issue. In the past, Republicans have proposed a "repatriation tax holiday" to allow U.S. companies with overseas revenue to move that money back to America without paying any taxes on it. Obama has railed against companies that keep revenue overseas instead of paying U.S. taxes on it. In this budget proposal, Obama rakes in taxes by imposing a mandatory, 14-percent "transition tax" on that overseas money, then taxing it at a higher rate after that.
3. Immunization proponents. Despite the recent measles outbreak, Obama's budget proposal would cut $50 million from an immunization program at the Department of Health and Human Services.
4. Deficit hawks. Advocates of scaling back federal spending and paying down the national debt are not probable fans of this budget. Obama's proposal carries a $474 billion deficit price tag in 2016, and it includes deficits in each of the next 10 years. Although the White House has insisted that these deficits, which are under 3 percent of projected GDP in each of the next 10 years, would help scale back the size of federal deficits, the proposal will almost certainly be a tough sell to Republicans and fiscal conservatives who have railed against deficit spending.