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Obama's Budget Proposals May Lead to Sweeping Tax Changes |
On May 11, the Treasury Department released the “Greenbook” containing the Obama Administration’s fiscal year 2010 budget proposals, which include tax provisions that could have a far-reaching impact on domestic and multinational companies as well as individual taxpayers. The Greenbook includes proposals to repeal the LIFO and lower of cost or market inventory tax accounting methods, tax carried interests as ordinary income, and implement international enforcement, reform deferral, and other tax reform policies. For individual taxpayers earning over $200,000 ($250,000 for married couples), the budget proposes the reinstatement of the higher 36 and 39.6 percent tax rates, personal exemption phase-out, and limitation on itemized deductions. In addition, these same taxpayers would be taxed at a 20 percent tax rate on capital gains and qualified dividends and at up to a 39.6 percent tax rate on ordinary dividends. On the positive side, the budget contains proposals to make the research and development tax credit permanent and make a lengthened net operating loss carryback period available to more taxpayers. To learn more about the proposals, access the full text of the Greenbook (http://www.treas.gov/offices/tax-policy/library/grnbk09.pdf) on the Treasury website.
Source: RSM McGladrey
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