The White House released its fiscal year (FY) 2023 budget request on Monday. Overall, it proposes $5.8 trillion in total spending, including a proposed $813 billion for defense and about $769 billion in non-defense discretionary spending.
Below are corresponding documents for the FY 2023 budget request:
- Analytical Perspectives. Contains a detailed analysis of specific subject areas within the budget. It includes information on federal receipts and collections; analyses of federal spending; and information on federal borrowing and debt.
- Appendix. Provides details on appropriations and legislative proposals for each agency.
- Green Book. The Treasury Department also released its Green Book, also known as the "General Explanations of the Administration's Fiscal Year 2023 Revenue Proposals." This document provides cost estimates and descriptions for the revenue proposals in the budget.
The Brownstein Tax Policy Team is currently drafting a summary and analysis of the tax provisions included in the budget request that will be published in the coming days. In the meantime, below are a few high-level takeaways about funding relate to tax issues.
Tax Overview
The budget requests $14.1 billion for the Internal Revenue Service (IRS), a $1.5 billion or a nearly 12% increase over its FY 2022 enacted level.
It specifically requests additional resources to improve taxpayer experience, expand customer service outreach to underserved communities, accelerate the development of new digital tools to enable better communication between taxpayers and the IRS, and facilitate more effective oversight of high-income and corporate tax returns.
The budget request also contains a new minimum tax on high-income individuals known as the "Billionaire Minimum Income Tax." It is expected to require the highest-income earners to pay at least 20% on their annual income as well as unrealized gains. This proposal will raise an estimated $360 billion over ten years.
The request notes that the Biden administration continues to support multiyear funding for IRS tax enforcement and to address the tax gap. This is a top priority for IRS Commissioner Charles Rettig and is an issue he stressed during his congressional testimony earlier this month.
Finally, the budget request also lends administration support for legislation that would temporarily prohibit executives from selling shares they received as part of their compensation. The proposal also endorses a 1% tax on corporate buybacks.
These proposals and others will be outlined in greater detail in Brownstein's forthcoming alert.
Next Steps
Republicans are expected to oppose much of the spending proposed in the budget request, and the extent of Democrats' support for all of the tax provisions is uncertain. Their positions will become clearer this week when the House Budget Committee and the Senate Budget Committees hold hearings tomorrow and Wednesday, respectively, to review the request. Brownstein will be following both hearings.
These hearings will initiate a months-long appropriations process between the two parties. Lawmakers must fund the federal government before the end of the fiscal year, Sept. 30, or pass a continuing resolution to avoid a government shutdown.
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