Still confused about what is actually in President Barack Obama’s 240-page budget, proposed last week?
[More from Manilla.com: The Secrets to Personal Budgeting]
You probably know that the federal government will tax the rich more. But here are details about four other proposals that could impact your daily life.
1. Social Security checks will decrease by hundreds of dollars over time if the proposed Obama budget passes, limiting the income of senior citizens, who typically rely on the benefit for at least 50 percent of their living expenses. The switch will still cushion the blow for seniors aged 76 to 85, low income seniors, veterans and the disabled.
[More from Manilla.com: 5 Financial Disasters to Avoid]
2. Cigarette taxes will double under the plan when the federal government tacks on an extra 94 cents per pack. The tax hike would create $78 billion over 10 years and would be used to fund some of Obama’s education plans. But the idea has drawn fire because nearly half of the nation’s smokers are in low-income households. Opponents have said it would be unfair to add the additional cost to the citizens who are already struggling to make ends meet.
3. Student loan interest rates for loans taken out next year would be tied to 10-year U.S. Treasury rates, ending Congress’s duty to set the rates for options like Stafford Loans each summer. The interest rate on unsubsidized Stafford loans is 6.8 percent, while the subsidized rate is 3.4 percent. The switch would raise unsubsidized Stafford Loans past its 6.8 percent cap by 2016, and would tip past 8 percent by 2018 before leveling off until 2023, according to the Congressional Budget Office.
[More from Manilla.com: How to Control Your Spending]
4. Retirement savings hoarders will no longer be able to store millions of dollars in tax-friendly retirement accounts. The budget would cap tax breaks savings on accounts that would provide about $205,000 a year in retirement. The limit, which will fluctuate each year based on inflation and interest rates, would be about $3 million this year. The government estimates that the policy switch would save $9 billion over the next decade.
More from Manilla.com:
- Ways to Stop Living Paycheck to Paycheck
- Trying to Live on a Budget? Here’s How
- Live Rich By Spending Less
- Investing Education
- President Barack Obama