President Barack Obama last week released the final budget of his presidency. Characterized by large increases in government spending, this budget is the bully pulpit for his most aggressive push for expanding the size and scope of the federal government. The President’s lame duck $4.1 trillion-dollar budget proposal is full of massive spending increases, handouts to green energy and tax increases on those who can least afford it. Even with these massive tax increases President Obama’s budget still never balances and would continue to add to the already ballooning deficit. Here are some of the worst of the worst in Obama’s final budget in office.
$10-per-barrel oil tax for Public Transportation Plan
Perhaps President Obama’s most controversial tax is that of a $10-per-barrel tax on oil. The budget projects this would raise $495 billion over 10 years to be spent on new investments in public transportation, nearly a 50% increase. This tax would lead to an astounding average price increase of 22 cents per gallon of gas on top of the already mandated 18.4 percent federal tax. This tax would not only wipe out much of the relief of lower prices at the pump, but also disproportionately hurt the lowest earning Americans by raising prices of home heating and all goods which predominately travel by truck.
Green Climate Fund
The recent agreement at the Paris conference on climate change called for a communal fund of $100 billion per year by 2020 in order to subsidize green energy in poor and developing nations. This will continue to provide funding for the same green energy handouts the Obama administration has been so fond of here at home but with even less benefit to Americans. With America struggling with deficits here at home this is not the time to expand green energy handouts abroad.
Permanent Renewable Tax Incentives
Under Obama’s proposed budget, two of the most egregious handouts to the energy industry, the Production Tax Credit (PTC) and the Investment Tax Credit (ITC) would become permanent. These tax credit provide financial support for the development of costly and unpredictable renewable energies, such as wind, solar and bioenergy. By making these handouts to green energy permanent, the Obama administration continues to promote expensive and unreliable energy sources. The PTC has long passed its initial purpose since its inception nearly 30 years ago and there remains little reason to make it permanent. America should focus on affordable and reliable energy, not energy that relies on perpetual handouts from taxpayers.
Obama’s budget calls for a whopping $61 billion for the purpose of letting states create a “free” community college system. The budget also continues to interfere with traditional higher education costs by increasing funding for Pell Grants by $2 billion. Both proposals won’t lower the cost of higher education but instead will continue to subsidize rising tuition rates and offload the burden to taxpayers.
DC Opportunity Scholarship Program
The president is proposing a huge cut to the DC school choice program which provides underprivileged students the opportunity to attend successful schools in the DC area. The President’s budget slashes funding from $20 to $3.2 million, leaving hundreds of hard-working students with less access to a quality education. Currently, students using the scholarship program have a 91% graduation rate, compared to 70% for those who did not receive a scholarship. With little cost to the federal budget and stellar results for students there is little reason to cut this program.
In President Obama’s 2017 budget, the administration announced its intentions to adjust the 40 percent levy on expensive health benefits to account for regional differences in health insurance costs, claiming to reduce the cost of insurance in states where health insurance is particularly expensive, such as Massachusetts and Maryland. Under this tax, employers and unions will have to cut back or eliminate workers health benefits to avoid paying the tax as defined by Obamacare. The president has continued to fight for the existence of the Cadillac tax, despite the wide spread bipartisan cooperation against it.
This year’s budget proposes to give states three years of fully subsidized Medicaid funding to states wishing to expand their program under Obamacare while afterward states will be responsible for 10% of the costs. State which expanded Medicaid are already struggling due to higher than expected enrollment, with Medicaid eating up as much as 35% of state budgets. Medicaid expansion double downs on a failing healthcare system that fails to address the underlying challenges in America’s healthcare system.
Capital Gains Tax Hike
The White House budget would raise the capital gains tax to 28% from 23.5%. Capital gains taxes hurt economic growth and often prevent businesses from expanding and creating more opportunities for American workers. Obama should be looking for ways to cut the capital gains tax, not increase it.
According to the CBO’s budget and economic projections, spending will grow from $3.9 trillion in 2012 to $6.5 trillion in 2026, which is 22.8% of GDP. That is an additional $2.6 trillion in spending for 2026 than what was spent last year.
Rising Debt Levels
Under this budget, over the next 10 years, publicly held debt will increase to a staggering $39 trillion dollars by 2026, according to a January CBO report. The same report said that ‘high and rising debt would dampen economic growth and thus reduce people’s income” These unsustainable levels of debt would be felt in the pockets of everyday Americans while cuts to entitlement programs will hurt those most in need of assistance.
Tax on Foreign Profits
With a broken tax code, it is no surprise that dozens of companies have left the United States for greener shores abroad taking thousands of jobs across industry with them. America currently has the highest corporate tax rate in the developed world which has made it difficult to attract and retain businesses to invest and build in America. Too add insult to injury, Obama proposes a 19 percent minimum tax on foreign earnings and a one-time 14 percent tax on foreign income. The proposed taxes would only serve to make American companies less competitive and further weaken economic growth.
Bureau of Land Management
In his final budget, President Obama allocates $1.3 billion to the Bureau of Land Management (BLM). The federal government owns 47% of total land in the west and in Oregon, Utah and Nevada, it owns more than half the land. In addition to not owning the land, state and local governments cannot collect property taxes off federal lands, which results in higher taxes in western states to fund government operations. In 2012, more than $75 million dollars were spent tending wild horses alone, an egregious waste of taxpayer money. A March 2015 study from the Property and Environment Research Center finds that the BLM only generates 73 cents per every dollar spent on federal land management. In order to maximize returns on land investments, states like New Mexico should be given the autonomy to control their land. New Mexico receives 12.78 of revenue per dollar spent, showing states are much more efficient managers of land, according to the same study.