President Barack Obama’s just-released budget for the 2015 fiscal year includes raising over $1 trillion in the next decade by closing up tax code loopholes.
USA Today reports that the $3.9-trillion budget proposal includes tax cuts for some taxpayers, particularly low-income Americans, beginning in 2018. Expansion of the Earned Income Tax Credit will help 13.5 million low earners keep more of their wages.
Of the 175 revenue proposals, 28 of which are new, Obama proposed exclusion Pell grants from income taxes, expected to save taxpayers $8.9 billion over 10 years, and made sole proprietors and other owners of professional services firms pay more taxes by declaring less in corporate profits. That proposal would take in $37.8 billion extra in Social Security and Medicare taxes over the same period.
"The budget secures that revenue through tax reform that reduces inefficient and unfair tax breaks and ensures that everyone, from Main Street to Wall Street, is paying their fair share," Obama said in his budget message to Congress.
Rep. Dave Camp, the Republican chairman of Congress’ chief tax-writing committee, released a draft of similar legislation but kept the distribution of tax burden the same, without increasing taxes for the wealthy and decreasing them for the poor.
"Unfortunately, the president's budget adds more complexity to the tax code and increases taxes for more Washington spending," Camp criticized in a statement. "That is the wrong direction."
Both proposals seek a new tax on banks, with Camp’s anticipating $86 billion in revenue and Obama’s featuring a $56-billion "financial crisis responsibility fee" over the coming decade.
The budget, which the New York Times called a “Populist Wish List and an Election Blueprint,” also contains proposals for more efficient TSA lines at airports, training for law enforcement to respond better to mass shootings, and $75 million for mental health programs aimed at young people.