Copies of President Obama's fiscal year 2015 budget are shown for sale at the Government Printing Office on March 4, 2014, in Washington (Photo: Win McNamee, Getty Images)
WASHINGTON (USA TODAY) -- The budget President Obama unveiled Tuesday would raise
more than $1 trillion over 10 years through changes in the tax code by
closing loopholes, raising some taxes and cracking down on enforcement.
the budget also cuts taxes for some taxpayers, most notably an
expansion of the Earned Income Tax Credit for 13.5 million low-income
Americans beginning in 2018.
Obama's budget contains 175 different revenue proposals, of which 28 are new in this year's budget. Among them:
Expanding the Earned Income Tax Credit for workers without children.
Currently, workers without qualifying children can claim the credit if
they're ages 25 to 65 and make less than $14,790. Obama's proposal would
expand the age range from 21 to 67 and the income limit for individuals
up to $18,070 for individual taxpayers. The proposal would save
taxpayers $59.7 billion over 10 years.
STORY: Obama budget urges expanding earned income tax credit
Making owners of professional services firms pay a greater share of
payroll taxes. Some sole proprietors, for example, take only a portion
of their income as salary and the rest as corporate profits, allowing
them to avoid Social Security and Medicare taxes. The proposal would
raise $37.8 billion over 10 years.
• Excluding college Pell grants
from income taxes, saving taxpayers $8.9 billion over 10 years. The
proposal would expand eligibility for educational tax credits by not
counting Pell grants as income.
Obama would boost collections by
regulating tax preparers, increasing the enforcement budget by 7% and
requiring more electronic filing.
The proposed tax changes are
part of Obama's insistence that deficit reduction come through both
spending cuts and increased revenue. "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.
STORY: Obama budget details $56B in new spending
budget comes the week after the Republican chairman of Congress' chief
tax-writing committee released his own draft legislation to overhaul the
The two proposals are very different:
Obama's budget would make the tax code more progressive, reducing taxes
on low-income workers and increasing them on the wealthy. Rep. Dave
Camp's proposal keeps the same basic distribution of tax burden across
But there are a few areas of general
agreement. Both contain a new tax on banks, though they would calculate
those taxes differently. Camp's would raise $86 billion over 10 years.
Obama's "financial crisis responsibility fee" would raise $56 billion.
STORY: Tax overhaul plan would flatten rates, limit deductions
the president's budget adds more complexity to the tax code and
increases taxes for more Washington spending," Camp said in a statement.
"That is the wrong direction."
The competing visions
for overhauling taxes will collide on Capitol Hill on Thursday when
Treasury Secretary Jacob Lew testifies before the House Ways and Means
Committee, which Camp chairs.
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