President Obama’s proposed budget for 2013 would impose sweeping tax hikes on the insurance industry, including a restoration of 2009 estate tax rules, and sustaining the portability between the estate and gift taxes as contained in current law, but at a maximum lower level. Obama’s proposed budget would also call for an increase in the SEC’s budget level in 2013 to $1.566 billion, which is a 18.5% increase over the SEC’s 2012 appropriation.
The proposal calls for reduced tax benefits from dividend-received deductions and Corporate Owned Life Insurance designed to raise about $15 billion in additional taxes over 10 years on life insurance companies.
The one nugget is another proposal from the past, this one aimed at providing an incentive for small employers to establish retirement plans for their employers.
Under current law, small employers (those that have no more than 100 employees) that adopt a new qualified retirement plan (or SIMPLE plan) are entitled to a temporary business tax credit equal to 50% of the employer’s expenses of establishing or administering the plan, including expenses of retirement-related employee education with respect to the plan. The credit is limited to a maximum of $500 per year for three years.
The administration said in conjunction with the automatic IRA proposal, to encourage small employers not currently sponsoring a qualified retirement or SIMPLE plan to do so, it wants to double this tax credit to a maximum of $1,000 per year for three years (effective for taxable years beginning after December 31, 2013) and to extend it to four years (rather than three).