President Obama's budget proposal for the federal government's 2015 fiscal year is more than 1,500 pages long, with $3.9 trillion in spending proposals. But even though most political experts have already declared the Obama budget dead on arrival, the initiatives that the president chose to stress in his budget still carry valuable insight into what the administration will see as its priorities for the rest of this election year. Smart taxpayers will want to use that insight to predict coming tax changes that could get through Congress and past the president's desk. Let's take a look at some of the major tax provisions of the Obama budget and how they would affect you.

Source: White House.

Raising tax revenue
The Obama budget includes several provisions that would increase taxes dramatically on upper-income earners. The largest is a proposal to put a 28% limit on the value of itemized deductions and certain items that are excluded from taxable income, including contributions to traditional IRA, 401(k), and other qualified retirement plan accounts. Although those in the 28% tax bracket and below would still get the full value of such tax breaks, those in the 33%, 35%, and 39.6% brackets would see the value of their deductions drop substantially. The White House Budget Office projects that such a move could raise $600 billion over the next 10 years.

Other tax-raising items include the implementation of what has become known as the "Buffett Rule," which would ensure that those making $1 million or more pay an effective tax rate of at least 30%, regardless of deductions other than charitable contributions. The impact of the provision is relatively small, with estimates of about $53 billion in revenue over the next decade, but the tax is squarely targeted at the highest levels of income.

Also, the president would limit the maximum balance in tax-favored retirement accounts so as to prevent wealthy individuals from establishing tax-deferred assets above certain levels. The exact limits are determined by complex actuarial calculations geared toward establishing the maximum annuity allowed under pension law, but according to estimates from the Tax Policy Center, the limits last year for a 62-year-old would have been $3.4 million, but a 40-year-old's limit would have been only $1 million.

The budget also aims to cut certain loopholes. Private-equity firms Carlyle Group (NASDAQ:CG), Apollo Global Management (NYSE:APO), and Blackstone Group (NYSE:BX) won't like provisions ending the tax preference for carried interest. Even though Carlyle, Apollo, and Blackstone won't necessarily see their corporate profits affected, the ripple effect could have negative effects in the industry and have implications for compensation costs and other expenses. In addition, S corporation shareholders and other professional services firms will no longer be able to shelter income from payroll taxes by splitting it into salary versus business profits.

Finally, the budget would raise estate taxes back to their levels from several years ago. The rate on taxable estate would rise to 45%, and the exemption amount would drop from its current $5.34 million to $3.5 million.

Tax cuts
On the other side of the budget equation, most of the president's budget proposals cutting taxes aim at lower-income taxpayers. Expansion of the earned income tax credit will double the maximum amount of the credit for families without children, boosting the amount paid under the credit by almost $60 billion over the next decade. In addition, the budget boosts the value of the Child and Dependent Care Tax Credit for those with children under age five, providing for up to a 65% credit on qualified expenses up to $3,000 plus 30% for the next $1,000.

Educational assistance is also a focus of the budget. Proposals include excluding Pell Grants from income tax and making the education-related American Opportunity Tax Credit permanent, resulting in more after-tax assistance for those who fall under the income limits for the credit and various other educational tax incentives.

What to watch for
Again, with a Republican-controlled House, the Obama budget doesn't stand a chance of passing in its current form. But there's actually a reasonable chance that at least some of these tax provisions could make it into law, especially on the tax-cut side. As the budget debate heightens throughout this election year, watch closely to see where the two parties draw battle lines and where, if anywhere, they find consensus.

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