President Obama's new budget will increase taxes by $819 billion, cut taxes by $2 trillion, and increase taxes by $1.
6 trillion.
Wait, what? The new tax bill either raises taxes or cuts them, depending on how you look at it.
Do the math, and you can come up with both answers.
At a basic level, tax revenues will be $819 billion higher in comparison to what they would be with no new policy action.
This amount equals the difference between the projected budget with the new tax policy and the projected budget with the old policy.
To arrive at that amount, compare $38.
7 trillion ten year tax revenues under the proposal to what they would be with no new policy actions ($37.
9 trillion), Obama's "baseline" amount.
However, this baseline assumes that many expiring tax provisions get extended, including the "middle-income" federal tax cuts now scheduled to expire after 2012.
This assumption also includes the "patch" of the alternative minimum tax through 2011, and estate tax law extensions through 2012.
These extensions, treated as a new policy choice since they require new legislation, can be viewed as a $2.
8 trillion tax cut.
That number, offset that by the $819 billion in tax increases mentioned above, equals roughly $2 trillion, the tax cut called for in the budget in accordance with current policy.
However, past legislation called for the expiration of "high income" tax cuts.
However, the estate tax law for 2011 and 2012 is lower than 2009 levels.
These new estate tax laws are in place for the time being.
If you consider them current policy in this sense, the President's baseline represents an $807 billion tax increase.
Add in the abovementioned $819 billion and it means we will see a tax increase of about $1.
6 trillion.
In addition to all of the numbers mentioned above, one of the talking points of the new legislation is that the budget reduces future deficits by $1.
1 trillion with about two-thirds coming from spending cuts.
The administration's figure for these deficit-reducing tax provisions is $375 billion.
To arrive at this figure, start with the abovementioned $819 billion of increased revenue (the same $819 billion we were talking about before).
The new legislation also increases outlays by $115 billion because of refundable tax credits, equaling $703 billion.
Subtract from that budgeted revenue for funding surface transportation projects ($328 billion), and you have $375 billion.
6 trillion.
Wait, what? The new tax bill either raises taxes or cuts them, depending on how you look at it.
Do the math, and you can come up with both answers.
At a basic level, tax revenues will be $819 billion higher in comparison to what they would be with no new policy action.
This amount equals the difference between the projected budget with the new tax policy and the projected budget with the old policy.
To arrive at that amount, compare $38.
7 trillion ten year tax revenues under the proposal to what they would be with no new policy actions ($37.
9 trillion), Obama's "baseline" amount.
However, this baseline assumes that many expiring tax provisions get extended, including the "middle-income" federal tax cuts now scheduled to expire after 2012.
This assumption also includes the "patch" of the alternative minimum tax through 2011, and estate tax law extensions through 2012.
These extensions, treated as a new policy choice since they require new legislation, can be viewed as a $2.
8 trillion tax cut.
That number, offset that by the $819 billion in tax increases mentioned above, equals roughly $2 trillion, the tax cut called for in the budget in accordance with current policy.
However, past legislation called for the expiration of "high income" tax cuts.
However, the estate tax law for 2011 and 2012 is lower than 2009 levels.
These new estate tax laws are in place for the time being.
If you consider them current policy in this sense, the President's baseline represents an $807 billion tax increase.
Add in the abovementioned $819 billion and it means we will see a tax increase of about $1.
6 trillion.
In addition to all of the numbers mentioned above, one of the talking points of the new legislation is that the budget reduces future deficits by $1.
1 trillion with about two-thirds coming from spending cuts.
The administration's figure for these deficit-reducing tax provisions is $375 billion.
To arrive at this figure, start with the abovementioned $819 billion of increased revenue (the same $819 billion we were talking about before).
The new legislation also increases outlays by $115 billion because of refundable tax credits, equaling $703 billion.
Subtract from that budgeted revenue for funding surface transportation projects ($328 billion), and you have $375 billion.
Source...