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Obama puts other people's money where his mouth is

Barack Obama's new budget puts other people's money where his mouth is. He's doubling down on taxing the rich as the so-called Buffett levy makes its first official appearance. New revenue is the centerpiece of the president's deficit cutting ambitions, with millionaires, buyout bosses and smokers footing a big part of the bill. That probably dooms his plan - and a big debt deal.

Republicans have been hammering Obama for months on a lack of specifics to back his populist rhetoric. The budgetary blueprint makes many of his campaign promises concrete. All the tax increases that have been touted, including one announced almost a year ago with the Oracle of Omaha's imprimatur, and then some also would be utilised to help shore up funding for a few new programs.

An important component of the 2014 budget unveiled on Wednesday is actually derived from Mitt Romney's plan: cutting deductions and benefits for wealthier Americans. The Republican presidential candidate aimed to reduce rates and impose tax burdens more broadly, while remaining budget-neutral. Obama, however, wants to keep about $500 billion of additional revenue from the rich over a decade.

Also finally quantified is a minimum tax on millionaires. A 30 per cent floor would provide Uncle Sam another $53 billion. A separate provision that would end the loophole on the tax rate paid on certain profits earned by investment firms, so-called carried interest, would deliver another $16 billion while making the system fairer.

The wealthy aren't the only ones who would get hit, though. Doubling the levy on cigarettes to about $2 a pack - a quintupling of the rate when Obama first entered the White House in 2009 - would be a regressive sin tax to help fund a public preschool programme.

It's the extra $1 trillion over 10 years, twice the Congressional Budget Office's baseline assumptions, that is the president's biggest gambit. After all, Republicans could barely stomach the January tax hike. Moreover, they would cut spending over a decade by $5.7 trillion, about eight times as much as Obama's proposal. That leaves the two parties very far apart, and prospects for a sensible debt compromise increasingly dubious