President Obama released his 2013 budget today. Conveniently, the U.S. Treasury emailed me a summary of the so-called "Green Book," its explanation of the President's recommendations. It's fairly dense. But if you're rich, this is the part you'll want to study, because it's all about how the wealthy in America are taxed, right down to their private jets and interest on hedge-fund earnings (I've edited for length):
Allow the 2001 and 2003 income tax cuts to expire (including the low tax rate on dividends) for households making more than $250,000 per year and restore the estate tax to 2009 levels....Sustaining these unaffordable high-income tax cuts would require either borrowing more, increasing taxes on the middle-class, or deep cuts in other parts of the Budget that help seniors, the middle-class, and the most vulnerable. The President’s Budget would instead reflect shared sacrifice by allowing income tax rates that exclusively affect upper-income households to return to the levels they were at throughout most of the 1990s...
TRANSLATION: The party's over. We're rolling back the clock to the Clinton Administration on taxes for the rich. Let's just pretend George Bush presidency didn't happen and that we haven't been giving the people who make their money from stock market earnings a big break for more than a decade.
Limit certain tax expenditures for the most affluent by capping itemized deductions at 28 percent. The Budget proposes to limit the tax subsidy for itemized deductions for high-income families to 28 percent – the same level that was in place at the end of the Reagan Administration.
TRANSLATION: No more spending your way to a lower tax bill, by using deduction to reduce taxable income. The accountants weep.
Eliminate the carried interest loophole for hedge fund managers and other similar investment service providers. The 2013 Budget proposes to change the tax treatment of carried interests in investment partnerships, which present the greatest opportunity for highly compensated service providers to be taxed on their services income (the earnings they receive for performing services) at capital gains rates, which are lower than the tax rates most moderate-income Americans pay on their earnings.
TRANSLATION: What? What? But I worked for that money! Seriously, this is one that really needs to go. It allows hedge fund guys, private equity guys, and venture capital guys (and in each case, gals, too) to cut their tax bills by absurd amounts.
Eliminate special depreciation rules for purchases of corporate jets and other general aviation passenger aircraft. Under current law, airplanes used in commercial and contract carrying of passengers and freight generally are depreciated over seven years. Airplanes not used in commercial or contract carrying of passengers or freight, such as corporate jets, generally are depreciated over five years. The Budget proposes to increase the depreciation recovery period for general aviation airplanes that carry passengers to seven years. Closing this loophole would raise $2 billion over 10 years.
TRANSLATION: What? What? You expect me to fly around in that jalopy Gulfstream V for another two while years before I can upgrade to a new depreciation bonanza—wait, I mean essential business tool? Somehow, I expect this may be the least hotly contested piece of the Obama budget in public, but the most widely despised in the private realms of corporate America.