Thursday, February 26, 2009

The Obama Tax Increases

ABC's Jack Tapper has a breakdown of proposed Obama tax increases:

President Obama's budget proposes $989 billion in new taxes over the course of the next 10 years, starting fiscal year 2011, most of which are tax increases on individuals.

1) On people making more than $250,000.

$338 billion - Bush tax cuts expire

$179 billlion - eliminate itemized

$118 billion - capital gains tax hike

Total: $636 billion/10 years

2) Businesses:

$17 billion - Reinstate Superfund taxes

$24 billion - taxcarried-interest as income

$5 billion - codify "economic substance doctrine"

$61 billion - repeal LIFO

$210 billion - international enforcement, reform deferral, other tax reform$4 billion - information reporting for rental payments

$5.3 billion - excise tax on Gulf of Mexico oil and gas

$3.4 billion - repeal expensing of tangible drilling costs

$62 million - repeal deduction for tertiary injectants

$49 million - repeal passive loss exception for working interests in oil and natural gas properties

$13 billion - repeal manufacturing tax deduction for oil and natural gas companies

$1 billion - increase to 7 years geological and geophysical amortization period for independent producers

$882 million - eliminate advanced earned income tax credit

Total: $353 billion/10 years

More than $23 billion is related directly to the oil energy. That's $23 billion that won't be spent looking for oil.


  1. "That's $23 billion that won't be spent looking for oil." --RW

    So what?

    "If there was a call for solar power or wind power, the market would supply it." --RW

  2. I am 95% sure that this ABC analysis does NOT include the $645 billion that Obama's budget expects to raise from cap-and-trade revenues over 2010-2019. (See page 123 of the budget, thanks to Dan Simmons for the tip.)

  3. @No Axe

    The $23 billion is taken out of the free market and put into government hands. Thus, there is that much less available for private investment---and given that money is taken from the oil industry, which understands oil investments better than anyone, it impacts investments that lean toward oil, more so than other industries.

    If the money was taken from builders it would tend to have more of an impact on building investments.

    The world is not a series of simultaneous equations, it's much more complex.

  4. Bob,

    I think your right about the cap-and-trade revenues, you see in Obama's world that is not a "tax".

  5. That is logical. Unfortunately, our expectations are so low that we welcome just about any tax cut. Just as tax increases imply that government is a good steward of resources, so does any tax cut that favors one industry over another.