President Obama’s budget doesn’t just go after wealthy Americans. It’s also got new taxes on vodka, cigarettes and other unexpected items, ABC News reported.
The fiscal 2014 spending plan, which looks to raise about $1.8 trillion in new revenue, also tackles golf courses, which can no longer be counted as partial tax write-offs, according to ABC.
The budget also eliminates special tax breaks for flavored alcohols. In a bizarre tax loophole, distillers are able to deduct up to 2.5 percent of alcohol in flavor mixes from spirit taxes, ABC said. That loophole would be closed in the president’s budget.
Some of the biggest losers are tobacco companies, which would see federal taxes on their products skyrocket under Mr. Obama’s plan. Cigarettes are currently taxed at about $1 per pack to help fund children’s health care, but the president has proposed jacking up that tax to $1.95 per pack.
The Treasury Department argues that taxes “levied on manufacturers and importers of tobacco products are one of the main ways that policymakers can affect tobacco production and consumption.” Many state governments have pursued similar strategies of funding health initiatives by singling out the makers of tobacco products.
In addition to going over wealthy CEOs through tax rate hikes, Mr. Obama also is going after one of their favorite ways of getting around, ABC reported. Corporate jet owners would have to wait seven years, not the current five-year period, to begin deducting the value of their aircraft, ABC said.
Businesses also would no longer be able to write off punitive damages paid after lawsuit losses. The damages would now be added to the business’s taxable income, ABC said.