ALEXANDRIA, Va., Feb. 16, 2011 /PRNewswire-USNewswire/ -- President Obama's latest budget plan relies more heavily on new revenues, rosy economic assumptions, and accounting shifts than many taxpayers would expect, according to a National Taxpayers Union Foundation (NTUF) analysis originally prepared for CNBC.
NTUF Senior Policy Analyst Demian Brady said, "Taxpayers now have some details on the President's fiscal plans. However, the thousands of pages in new budget documents do not provide a full answer to rising deficits, debt, and entitlement costs, despite higher taxes."
Highlights from NTUF's analysis include:
- Revenues Would Zoom. Receipts are predicted to jump by almost 21 percent in Fiscal Year 2011. The White House assumes an astonishing spike in corporate income tax receipts of 100 percent in two years (FY 2011-2013). The last time this occurred was between 2003 and 2005 – when the Bush Administration was reducing tax rates.
- Spending Slows, then Grows. The White House claims $1.1 trillion in savings over 10 years, but this will not slow the pace of total federal expenditures much. In FY 2012 outlays will fall by 2.4 percent, but beyond FY 2013, outlays will increase an average of 5.3 percent.
- Borrowed Budget Reductions. Of the 153 Fiscal Year 2012 "Terminations, Reductions, and Savings," 50 proposals appeared in Obama's previous budget and 20 were previously submitted by George W. Bush (these totals do not necessarily overlap).
- Hidden Taxes. The Administration proposes to cut aid to airports by $1.1 billion, but would permit increased "Passenger Facility Charges"; this will drive up ticket costs. Over 40 percent of the $43.6 billion the White House wants to raise from ending "oil and gas preferences" would come from repealing a widely available deduction (but only for oil and gas). This could cost jobs and drive up energy prices.
- Hidden Spending. The Administration's "refundable" (in excess of actual tax liability) tax credit proposals would trigger $115.3 billion in spending (not just foregone revenues).
NTUF is the research affiliate of the 362,000-member National Taxpayers Union, a taxpayer advocacy group founded in 1969. Note: For additional analyses of Presidential budgets, visit www.ntu.org.
SOURCE National Taxpayers Union Foundation