Monday, February 2, 2015

President Releases 2016 Budget: Middle Class Economics

President Obama released the 2016 Budget Proposal, a $4 trillion budget subtitled “Middle Class Economics.” This year’s budget proposal includes tax cuts and spending programs aimed at increasing support to working families by raising taxes and closing tax loopholes on multinational corporations and capital gains.

The budget would impose a new fee on large, highly-leveraged financial institutions. Specifically, the Budget would raise $112 billion over 10 years by imposing a seven basis point fee on the liabilities of large U.S. financial firms — the roughly 100 firms with assets over $50 billion. The administration proposed this tax as a policy that prevents future financial crises by disincentivizing banks from becoming excessively leveraged, noting that the fee would improve economic stability by attaching a direct cost to leverage for large firms. The proposal continues: “The fee will also satisfy the statutory requirement for the President to propose a means to recoup any remaining costs of assistance provided through the Department of the Treasury’s Troubled Asset Relief Program.”

Read the President’s 2016 Budget proposal.

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