Obama budget proposes to curtail exemptions and deductions

President Obama’s Office of Management and Budget unveiled a broad outline of its plans for the 2010 budget on Feb. 26, 2009, highlighting investments in health, energy and education.

To pay for some of those items, Obama proposed allowing the Bush tax cuts to expire as scheduled on people who make more than $200,000 and couples who make more than $250,000. For those same income levels, he plans to restore phaseouts for personal exemptions and deductions. This would limit the amount that higher earners could write off as tax deductible or tax exempt. According to the budget documents, this change would begin in 2011.

Obama’s budget still has to be approved by Congress, where Republicans are likely to oppose any effort to let the Bush tax cuts expire. So for now, we rate this promise In the Works.