The budget would replace the $1.2 trillion in deficit reduction produced by the sequester with new revenue and targeted spending cuts. To that, the budget would add an additional $1.8 trillion in deficit reduction over 10 years through further tax changes and reductions in spending, including cuts to entitlements programs.
Among the more controversial of the president’s proposed spending cuts is a change to the cost of living allowance for Social Security benefits to the less generous “chained CPI.” That change, which would also affect indexation of income tax brackets, among other things, would raise $230 billion over 10 years.
A new tax proposal would limit the deduction or exclusion for contributions to tax-favored retirement plans, when the amounts in those plans exceeds the maximum allowable defined benefit plan benefit, currently $205,000, raising $9 billion.
The president also proposes the “Buffett rule”—a 30% minimum tax on households with adjusted gross income of more than $2 million, phased in beginning at $1 million in annual income, which would raise $53 billion over 10 years.
In connection with the FY 2014 budget, Treasury released its explanation of the revenue proposals, known as the "Green Book.”
Read text of the Green Book [PDF 1.5 MB]
Read text of the FY 2014 budget [PDF 2.1 MB]
KPMG's TaxNewsFlash will provide an analysis of the tax provisions in the FY 2014 budget and Green Book.