Obama Is Raising Taxes—Not Cutting Them
By Peter Roff, Thomas Jefferson Street blog
One of the more interesting things about blogging every day, as I do here for Thomas Jefferson Street, is the comments that people provide about what you write. It's a chance to get instant feedback.
On Monday, in my post dealing with Meghan McCain's advice to the Republican Party to be more moderate, I mentioned the close to 1 million, by some estimates, angry taxpayers who turned out for the April 15 Tax Day Tea Parties.
That produced a comment from a reader in New Jersey who asserted, "Voters aren't outraged over Obama high taxes, and aren't longing for Reagan's low taxes. In reality, taxes now are much lower than under Reagan, and Obama just lowered taxes for 95 percent of American taxpayers."
This was—it may come as little surprise—news to me, so I asked around to see if this was correct. It's not, at least according to what one Capitol Hill economist who walked me through the numbers said.
Federal revenue, as a share of the gross domestic product, is lower today (15.5 percent in Fiscal Year 2009) than under Reagan, but that is only because of the recession and the stimulus checks. "Revenue under Reagan bottomed out at 17.4 percent of GDP in FY '84," the economist told me, adding that "Obama hasn't cut taxes on anyone."
In fact, as I have written here before, the only tax change to go into effect thus far has been an increase in the federal excise tax on cigarettes, whose impact falls heaviest on lower-income folks and violates a campaign pledge Obama made.
With regard to the way the tax burden is distributed across income cohorts, it is increasingly concentrated on upper-income taxpayers. Federal statistics show that the top-earning 25 percent of income taxpayers paid 73 percent of all federal income taxes in 1980. By 1988, that percentage had increased to nearly 78 percent. By 2000, after the Clinton tax hike, it hit 84 percent. And by 2006, the last year for which the data has been compiled, the top 25 percent of income taxpayers shouldered just over 86 percent of the federal income tax burden.
And Obama doesn't plan to ease that burden—or so one might infer from the next $1.4 trillion over 10 years tax increase that was included as part of the budget he sent to Capitol Hill. To put it another way, the Obama budget included $3.61 in tax increases for every dollar of so-called tax cuts. This includes new taxes on energy at the pump and as it comes into the home, on many small businesses with 20 or more employees, and on seniors who depend on dividends as part of their retirement income.
The Obama budget, rather than cutting taxes for 95 percent of working Americans, proposed to increase taxes as a share of the economy in eight out of the next 10 years. And that would raise, not reduce, the tax burden as a share of the economy by more than 25 percent over the coming decade.
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Tags: federal taxes | taxes | federal budget | Barack Obama | Obama administration
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Reader Comments
obama
well listen im 16 and i know that raising taxes is not the right thing to do i don't know why he thinks that we need the government to rule us we are a free nation we don't need someone to tell us what doctor to see and what to do im not gonna lets this happen to me in the future we need to lower taxes and people would have more money to buy things and then economy would raise and we could be out of debt wouldn't you like to buy things that you wanted in life and have a good future for your children thats why im going to fix this huge problem in the future waiting for us and i dont want to see more people losing jobs and losing homes anymore we need to make a change not an Obama change. the preamble says we the people. and i plan on keeping like that
who's going to work?
If we tax the crap out of the rich making their life more like ours where they can't afford to do alot of the stuff they do and buy what they buy,won't we loose our somwhat crapy little lifestyle.Not to mention if we take that much more of their income what incentive do they have to employ us.I dont know the answer but unlike politions I admitt it.
Duh
Well obviously as the wealth gap continues to grow and the rich get increasingly rich they are going to pay a larger amount of the country's taxes.
Fact of the matter is as the economy grows it needs more money to govern itself. Since the wealth of the middle and lower class isnt growing, and the rich folks are making out like bandits, obviously this money needs to come from the rich.
I have never understood how the people who control our nation's wealth can complain about not having enough of it. Its like watching a morbidly obese person demanding scraps of food from a starving child. You have to be one helluva a greedy bastard to think that is some how ok and manage to sleep at night.
Although the cigarette tax thing is pretty messed up... anyway you you look at it, its a poor economic move in the long run... and increasingly taxing the lower class is morally questionable.
While republicans are riddled with greed, democrats seem to be riddled with prejudice ( taxing smoking, increasing gun control) by trying to eliminate the products they dont like.
As a person who enjoys his freedom of choice, but also a humanitarian that believes in giving the less fortunate folks a hand... seems my beliefs have no place in modern politics.
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