Obama Budget Would Take $112B From Rich
WASHINGTON (TheStreet) -- President Barack Obama's proposed budget would shift $112 billion away from the nation's top earners in 2012, according to the Tax Foundation, a nonprofit organization that monitors federal and state fiscal policies.
The group analyzed the impact of the 10-year budget proposal on various income groups. The study, released last week, said higher-income families would lose the most because of the expiration of Bush administration tax cuts and the proposed 28% cap on certain deductions. Low-income and middle-class families stand to benefit from the redistribution.
"We asked two simple questions," says Tax Foundation Senior Economist Gerald Prante, co-author of the report. "'How much in federal taxes does a given income group pay under a given set of tax policies?' and 'How much in federal taxes would that income group pay under a benefit principle system of taxation, in which a family's tax share is equal to its share of government spending benefits?'''
The difference between those two assessments formed the basis of the income redistribution prediction. The group excluded budget items related to the jobs initiative, health care reform and climate change from its analysis, citing the lack of specifics available.Families in the bottom 10% income bracket benefit the most from the proposed budget and stand to receive an additional $8.7 billion in federal spending benefits. On average, compared to the current budget, a family in this range would receive an additional $494 from income redistribution, a total of $17,962 in federal spending benefits.
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