President Obama's Budget Calls for Another $2.6 Trillion in Taxes. Will Your Tax Bill Increase?

President Obama would like to sign these new tax changes into law, but their fate remains uncertain. Photo: White House, by Lawrence Jackson

As Presidents do every year, President Obama has recently released his proposed budget for the fiscal year 2017. It includes a host of interesting requests, such as $19 billion for cybersecurity -- a 35% increase over the previous year's allocation -- and many proposed changes for how we in America are taxed -- both tax cuts and tax increases. In general, President Obama is looking to hike taxes on high-income households and on oil and foreign income, while cutting them for the middle class and small businesses. His proposed changes would generate $2.6 trillion in new tax revenue over the next decade if enacted.

Here's a closer look at just a handful of the proposed tax changes. Few expect them to pass, as our current Congress is not known for its cooperation with President Obama, but they will still be starting points for discussions and negotiations. See which ones are likely to affect you:

Making information filings due soonerYou may have noticed that many financial services companies with which you do business take a long time to get you the 1099 forms and other documents you need in order to prepare your taxes. Their filing due date for much of that has been in late February, but it will now be moved up to Jan. 31.

Increasing regulation of paid tax preparersWhile many paid tax preparers do a fine job preparing our returns, many others don't -- and haven't been subject to much regulation. The new budget aims to give the Treasury the power to regulate paid preparers. This aims to boost the integrity of the tax preparation process and is complemented by a proposed increase in funding for IRS enforcement.

Stiffening sentences for those convicted of tax-related identity theftThis proposal won't reduce your taxes, but it might reduce your chance of experiencing tax identity theft, where crooks claim your tax refund before you do. President Obama is asking for stiffer sentences for those convicted of tax-related identity theft and additional $5,000 civil penalty fines.

The new budget aims to help families. Photo: David Amsler, Flickr.

A tax credit for two-earner householdsOne burden that many American households face is paying for child care or other expenses when both adults in the household work. President Obama is asking for a second-earner tax credit of up to $500 per year -- which, it's estimated, should help more than 20 million two-earner couples.

More help for familiesPresident Obama is also looking to increase the Child and Dependent Care Credit and to have a much bigger credit available to those with one or more children age five or younger. He would make the phase-out ranges more generous, too, to help more families qualify for this help.

Expansion of the Earned Income Tax CreditThe Earned Income Tax Credit is a powerful aid for lower-income families that has been, sadly, under-used, because of being a bit complex and just under the radar for too many people. The new budget aims to expand it to apply to childless workers, too.

Improved tax breaks for educationThe proposed budget aims to simply and strengthen tax breaks for education, consolidating the Lifetime Learning Credit and the American Opportunity Tax Credit, making the credit available to more students (including fifth-year undergrads and part-time students), and increasing the refundable portion of the credit. (The budget also aims to make two years of community college free to many students.)

Higher maximum tax rates on capital gains and dividendsA proposed tax change that won't be welcome to many investors is an increase in the top capital gains and dividend tax rate from 20% to 24.2% (to 28%, including the current 3.8% Net Investment Income Tax). The good news here is that this will only affect higher-income taxpayers. For 2016, for example, the higher 20% rate applies only to single filers with taxable income of $415,051 or more and married-filing-jointly folks earnings $466,951 or more.

Strengthened retirement rulesThe proposed budget will allow for workers without employer-provided 401(k) plans to have contributions automatically made from their pay to IRA accounts. It's also looking to eliminate "back-door Roth IRAs," whereby high-income folks who don't qualify to make Roth IRA contributions have been making contributions to traditional IRAs instead and then converting those IRAs to Roth IRAs. Another proposed new rule is to impose required minimum distributions on Roth IRAs. They're already a feature of traditional IRAs (as well as traditional and Roth 401(k)s), requiring account holders to withdraw certain minimum amounts each year beginning at age 70 1/2.

Reduced value of deductions for higher earnersHigh earners would also, under the new budget proposal, enjoy less benefit from itemized deductions. Remember that there are seven tax brackets for tax year 2016: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. Most of us face no more than the 28% rate. If you can deduct $1,000 of expenses from your taxable income and you're in the 28% bracket, you'll save $280. If you have those expenses and you're in the 35% bracket, you can save $350. The new rules would limit those in tax brackets above 28% to receive no more than 28% of relief when deducting.

President Obama awarded Warren Buffett the Medal of Freedom in 2011 and included the "Buffett" rule in his new budget. Photo: Medill DC, Flickr.

The Buffett ruleWarren Buffett has gone on record many times decrying our current system, where wealthy people like himself pay lower overall effective tax rates than average Americans. That happens in part because many of these wealthy people have significant dividend and capital gain income, which has been taxed at lower rates. The proposed "Fair Share Tax" would require those with very high incomes to pay no less than 30% of their income in taxes (adjusted for charitable contributions).

A 19% minimum tax on foreign income -- plus a 14% one-time taxThis item is aimed at corporations, imposing a minimum tax rate of 19% on the foreign earnings of multinational American companies -- and reaching back to impose a one-time 14% tax on previously earned and untaxed foreign income.

Keeping more jobs in AmericaPresident Obama is aiming to make it harder for American companies to shift jobs overseas. The new taxes will make it less attractive from a tax standpoint to keep earnings abroad. He's also clamping down more on "tax inversions" -- which involve U.S. companies merging with companies based in nations with lower corporate tax rates and changing their address in order to shrink their tax bills. Such actions may seem foul, but they have been legal. The new budget widens the definition of inversions -- and it also offers a tax credit for those companies that bring jobs back to the U.S. from abroad.

Those are many of the proposed tax-related changes in President Obama's 2017 budget. Others include increased taxes on oil and oil products (to fund clean energy and clean transportation initiatives) and aid for small businesses, such as via simplified accounting rules and bigger tax credits for setting up retirement accounts for workers. Energy-related tax breaks would also be strengthened.

It's an ambitious and far-reaching proposed budget, with the potential to bring about a lot of change. Stay tuned as we see how Congress treats it and how much of it actually comes to pass.

The article President Obama's Budget Calls for Another $2.6 Trillion in Taxes. Will Your Tax Bill Increase? originally appeared on Fool.com.

Longtime Fool specialistSelena Maranjian, whom you can follow on Twitter, owns no shares of any company mentioned in this article.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.