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The FY2020 President's Budget is out today. A few high/lowlights on tax issues.
First, it's worth noting that in an unusual move, we did not get the supporting budget documents, so many of the details will not be out for another week.
The Trump 2020 budget hides the $985 billion cost of extending the Trump tax cuts through 2029 by making it part of the budget baseline.
According to the Tax Policy Center, 63% of the additional tax cuts would go to the top 20% of taxpayers in 2026. In that year the top 1% would receive an average additional tax cut of $40,180 compared to current law.
The $985 billion tax cut comes on top of the $1.85 trillion increase in the deficit from the Tax Cuts and Jobs Act from 2018-2028.
When the Trump Administration talks about the need to cut spending to reduce the deficit, it's important to keep the cost of their trillions in tax cuts in mind.
The Trump 2020 budget also strips away $67.6 billion in tax credits targeted to working families by restricting access the earned income tax credit, the child tax credit, and credit for other dependents.
The Trump 2020 will give $45.5 billion in tax credits to fund private schools and undermine our public school system through the so-called Education Freedom Scholarships.
One good idea in the Trump 2020 budget is that it proposes to increase the IRS budget for enforcement by $14.5 billion over the next 10 years, which it estimates will actually reduce the deficit by $32.5 billion in total.
This is a good policy and Congress should increase the enforcement spending further to help make up for years of cuts.
TBH, there's not much here in terms of new tax proposals here.
*It's actually worse than that. It's $1.1 trillion when you include the outlay effects as well. H/T @TylerEvilsizer
