President Obama released the 2013 fiscal year budget, a plan that heavily relies on taxes and will increase taxes by $1.56 trillion over the next 10 years.
Americans for Tax Reform went through the plan and pulled out 8 important tax increases that will effect citizens. Of those 8, 6 are particularly business-focused:
- There will be a 3.8 percent surtax on investment income. One of the effects will be new taxes on health insurance plans (that will be passed to customers as premiums).
- Small employer profit tax rates will increase. The top marginal income tax rate will rise from 35% to 39.6% next year.
- Capital gains tax rates will jump from 15% to 23.8% in 2013.
- Dividend gains rate will jump from 15% to 43.4% in 2014.
- Real tax rate on capital gains and dividends will be huge and put U.S. employers at a disadvantage.
- Taxes will be raised by $147 billion on large employers. Companies will have to pay taxes in the countries in their foreign markets, but will also have to pay U.S. taxes if they choose to bring that money back to the U.S. This will deter bringing money back to the U.S. to invest in jobs, equipment, fund pensions, etc.
The interesting context in all of this is that according to a World Bank study of doing business across the world, the U.S. was ranked fourth best country overall in which to do business. But tellingly, it was ranked 13th best overall for starting a new business–and here’s the lethal bit–the U.S. was ranked 72nd in the World Bank study in how easy it is for new companies to pay taxes and deal with regulation.
In such a context one might suppose it would be incumbent upon government at the Federal level at least to alleviate this burden. Instead, it would appear from this report from ATR that the current administration wishes to take us in the opposite direction.