TAX NEWS - June 2010
Obama has not cut taxes
Erasing $288 billion in tax relief, Varney falsely suggests Obama has not cut taxes
Varney: When Reagan took office, "he cut taxes"; when Obama took office, "he raises taxes." From the June 10 edition of Fox News' Fox & Friends:
VARNEY: Yes, well look. What happened when President Reagan took office in January 1981? We had double-digit unemployment. He cut taxes, set off a growth of prosperity for a generation. Now we've got President Obama in; he inherits a nasty recession, he raises taxes and raises spending. He has not cut unemployment. There's a difference in reaction to a nasty situation. One works, one doesn't work. I'm very partisan. I'm very clearly partisan. Sorry, ladies and gentlemen.
In fact, Recovery Act included significant tax relief for individuals, families, and businesses. As Media Matters for America has noted, the Recovery Act contained $288 billion in tax relief, including the Making Work Pay tax credit, which is a two-year annual credit of $400 per individual or $800 for families. In addition, the Recovery Act included a temporary increase in the earned income tax credit, a temporary increase in the refundable portion of the child tax credit, an increase in the first-time homebuyer tax credit, and tax incentives for businesses.
Bruce Bartlett: "[F]ederal taxes are very considerably lower by every measure since Obama became president." Bruce Bartlett, former adviser to President Reagan and a Treasury Department economist under President George H.W. Bush, wrote on March 19 that "federal taxes are very considerably lower by every measure since Obama became president. And given the economic circumstances, it's hard to imagine that a tax increase would have been enacted last year":
As noted earlier, federal taxes are very considerably lower by every measure since Obama became president. And given the economic circumstances, it's hard to imagine that a tax increase would have been enacted last year. In fact, 40% of Obama's stimulus package involved tax cuts. These include the Making Work Pay Credit, which reduces federal taxes for all taxpayers with incomes below $75,000 by between $400 and $800.
According to the JCT, last year's $787 billion stimulus bill, enacted with no Republican support, reduced federal taxes by almost $100 billion in 2009 and another $222 billion this year. The Tax Policy Center, a private research group, estimates that close to 90% of all taxpayers got a tax cut last year and almost 100% of those in the $50,000 income range. For those making between $40,000 and $50,000, the average tax cut was $472; for those making between $50,000 and $75,000, the tax cut averaged $522. No taxpayer anywhere in the country had his or her taxes increased as a consequence of Obama's policies.
AP: "Americans are paying lower taxes this year." The Associated Press reported on April 14, "You wouldn't know it by the Tax Day rhetoric, but Americans are paying lower taxes this year, even with increases passed by many states to balance their budgets." While noting that in future years some taxes may increase for some Americans, the article said that "Tax Day rhetoric," i.e. complaints by some of being overtaxed, does not match the reality of Americans' current tax burdens. From the article:
Congress cut individuals' federal taxes for this year by about $173 billion shortly after President Barack Obama took office, dwarfing the $28.6 billion in increases by states.
The massive economic recovery package enacted last year included about $300 billion in tax cuts over 10 years. About $232 billion was in cuts for individuals, nearly all in the first two years.
The most generous was Obama's Making Work Pay credit, which gives individuals up to $400 and couples up to $800 for 2009 and 2010. The $1,000 child tax credit was expanded to more families, and the working poor can qualify for as much as $5,657 from the Earned Income Tax Credit.
There were also credits for qualified families who buy new homes or make energy improvements to existing ones, as well as tax breaks to help pay college tuition or buy new cars.
Tax-cut amnesia is News Corp.-wide phenomenon. In response to Obama's State of the Union assertion that "we cut taxes," Fox Forum columnist Peter Roff wrote, "We cut taxes? How did I miss that?" Fox News contributor S.E. Cupp similarly wrote, "Cut taxes?! WHAT?" The New York Post also asked if Obama was in "Opposite Land" when he "claimed to have cut taxes and saved 'millions' of jobs." In July 2009, Stephen Moore said on Fox News that "[t]he one thing this administration won't do is cut taxes," when, in fact, it already had cut taxes.
CBS: "Poll Reveals Most Americans Don't Know They Got a Tax Cut." A February 5-10 New York Times/CBS News poll found that only 12 percent of respondents "think the Obama Administration has ... decreased taxes for most Americans." CBS wrote that "[o]f people who support the grassroots, 'Tea Party' movement, only 2 percent think taxes have been decreased, 46 percent say taxes are the same, and a whopping 44 percent say they believe taxes have gone up."
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