Obama Administration proposes FY 2012 federal budget with revenue-raising proposals

Washington National Tax Services

President Barack Obama today proposed an FY 2012 federal budget that calls for $3.73 trillion in overall federal spending for that year. The Administration is projecting a $1.6 trillion federal deficit for current FY 2011, which ends September 30, or 10.9 percent of GDP. The Administration is projecting a $1.1 trillion federal deficit for FY 2012, or 7.0 percent of GDP.

The Administration proposes to reduce the federal budget by $1.1 trillion over the next ten years, with roughly two-thirds of the deficit reduction coming from spending reductions and the remainder coming from tax increases. The Administration proposes to freeze discretionary non-security spending through 2015. While not providing a specific tax reform plan, the Administration's budget notes that President Obama recently has called on Congress to work with the Administration on corporate tax reform that will "simplify the system, eliminate special interest loopholes, level the playing field, and lower the corporate tax rate ... without adding a dime to the deficit." The President also has called for simplifying the tax rules for individuals.

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