On Monday President Obama unveiled his proposed budget for the federal government s next 10 fiscal years (2011-20), the first of which begins in October. To be blunt, you should be quaking in fear. The budget includes over $1.4 trillion in tax increases, which is bad enough. The rest of the picture is downright horrifying. Want the details? Grab some antacid tablets (or a Scotch if you prefer) and read on.

The Ugly Deficit Scene

Obama s budget projects an $8.5 trillion deficit over 2011-20, and that s after the $1.4 trillion in tax increases. Based on past performance, that $8.5 trillion is probably way too low because the Feds are experts at overestimating revenues and underestimating expenditures. This looming 10-year budget gap (whatever it actually turns out to be) will be layered on top of the trillions we already owe. Personally, I have trouble working with trillions, so I had to use my heavy-duty diesel-powered calculator to put the numbers in perspective.

* By Sept. 30, 2010, when the 2010 fiscal year blessedly ends, the federal debt is projected to be $9.3 trillion. That amounts to $30,000 for every man, woman and child in the U.S. (based on a population of around 310 million).

* By Sept. 30, 2020, the debt is expected to double to $18.6 trillion. Even accounting for population growth (the U.S. Census Bureau projects our population will be 325 million by then), that works out to about $57,000 for every man, woman and child.

* If you have a family of four, your little household s share of the 2010 debt is $120,000. By 2020, Obama wants to bump that up to at least $228,000 (probably more).

* It gets worse. Lots of households don t pay any federal income taxes at all and lots pay only a little. If you re among those who do pay a significant amount, your little household s share of the national debt is actually a lot more than the raw numbers would indicate because you re on the hook for amounts that other households won t be paying. What will your real share be by 2020? $400,000? $600,000? Nobody knows. If you did know, you would probably be terrified.

With that in mind, let s take a look at the budgeted tax provisions.

Higher Tax Rates for High-Income Individuals

Obama wants to unwind the so-called Bush tax cuts for individuals in the top two tax rate brackets starting next year. The current 33% and 35% tax rates would jump to 36% and 39.6% and affect married joint-filing couples with incomes above $250,000 and unmarried individuals with incomes above $200,000. These rate hikes are projected to raise about $365 billion over 2011-20.

Curtailed Deductions for High-Income Individuals

Obama also wants to restore two phaseout rules that can wipe out: (1) part or all of a higher-income individual s personal exemption deductions and (2) up to 80% of the most common types of itemized deductions, including write-offs for home mortgage interest, state and local income and property taxes, and charitable donations. These two stealth tax increases would take effect in 2011. They would impact married joint-filing couples with incomes above $250,000 and unmarried individuals with incomes above $200,000 and are expected to raise about $210 billion over 2011-20.

Starting next year, another stealth tax increase would allow only a 28% tax benefit for itemized deductions claimed by individuals who are in the 36% and 39.6% tax brackets. For these folks, itemized deductions would first be cut back by the phaseout rule explained above. Then whatever deductions are left would deliver only a reduced tax-saving benefit of 28% instead of the expected 36% or 39.6% tax-saving benefit. This scheme is projected to raise about $290 billion in 2011-20. (Those groans you hear in the background are from charities that can see donations by wealthy individuals drying up and realtors who can see expensive homes being that much harder to sell.)

Higher Taxes on Capital Gains and Dividends for High-Income Individuals

Obama proposes to leave the current taxpayer-friendly federal income rates on long-term capital gains and dividends in place for all except those individuals who are in the highest two tax brackets. For them, the maximum rate would go up to 20% (compared to the current 15%). This change would take effect next year and is expected to raise about $105 billion during 2011-20.

Extensions for Refundable Credits

So-called refundable tax credits are given that name because the government pays them out in cash to eligible individuals after their tax bills (if any) have been reduced to zero. In other words, you can collect refundable credits in exchange for filing some forms whether you owe taxes or not. The Obama budget includes the following provisions for these stealth welfare payments.

* Making Work Pay Credit: The refundable credit of up to $400 for working singles and $800 for couples would continue through 2011, which would cost the Treasury about $61 billion. Of course, the next budget will propose extending the deal through 2012 and so on until doomsday.

* Child Credit: Liberalizations of this credit, which make it wholly- or partially-refundable for many individuals, would be continued through 2020.

* Earned Income Credit: Liberalizations of this refundable credit would be extended through 2020 at an estimated cost of about $15 billion.

* American Opportunity Credit: This partially-refundable credit for college tuition and course materials would be continued through 2020 at an estimated cost of about $75 billion.

* Other Credits: Obama proposes a more generous tax credit for working families with dependent children, parents or grandparents and a more generous tax credit and other incentives to encourage those with modest incomes to make retirement plan contributions. These changes would cost an estimated $53 billion over 2011-20.

Alternative Minimum Tax

Obama would continue the current policy of increasing the alternative minimum tax (AMT) exemption amounts each year to account for inflation.

Estate Tax

The budget calls for reinstating last year s federal estate tax exemption of $3.5 million per person and last year s tax rate of 45%.

Business Changes

Obama would extend rules that allow assets to be depreciated quickly for a couple more years, make the research and development tax credit permanent, and eliminate capital gains taxes on sales of qualified small business stock. These pro-taxpayer changes are worth about $70 billion, but they would be completely overwhelmed by $470 billion in new tax hikes aimed at banks, oil and gas companies, retailers and wholesalers, multinational corporations, insurance companies, hedge funds, and business in general. While you may have little to no affection for some of these targets, it s hard to see how penalizing them with higher taxes makes sense in this economy. (Rest assured, these outfits will to try to pass along any tax increases to you the innocent consumer.)

The Bottom Line

The preceding facts and figures speak for themselves. The proposed tax hikes are only a relatively small feature in an ugly big picture. Ten years ago, the federal debt was a relatively manageable $3.4 trillion. Ten years from now, it s projected to be $18.6 trillion -- at least. I don t see any change we can believe in here unless you happen to be in favor of running up enormous deficits as the sneaky prelude to imposing enormously oppressive tax increases to close the gap.