Politics
Obama Fiscal Year 2014 budget proposal to kick start deficit-reduction talks
In line with proposals from his State of the Union address, Obama’s budget includes spending on policy priorities such as infrastructure and expanded pre-school programs.
A proposal for US$77 billion to expand early childhood education would be financed by nearly doubling the federal tobacco tax to US$1.95 from US$1.01 per pack of cigarettes.
The budget also includes a 10 percent tax credit for small businesses that raise wages or hire new workers.
The administration would also raise US$79 billion in revenues by increasing taxes on large estates that are passed on to heirs. The president’s budget would lower to US$3.5 million from US$5 million the threshold for estates hit by the tax, and would raise the tax rate to 45 percent from 40 percent.
The budget also suggests capping the value of the tax exemption for interest paid by municipal bonds, an idea that has rattled the US$3.7 trillion municipal bond market.
The budget envisions a steady pickup in economic growth but only a gradual decline in the unemployment rate.
The White House sees growth rising to 3.4 percent in 2014 from 2.6 percent this year, while the jobless rate would drop to 7 percent at the end of 2014 from 7.5 percent in the last three months of 2013.
