By Peter Roff, Thomas Jefferson Street blog
In his State of the Union address, President Barack Obama bragged that his administration had not raised taxes, contrary to what its opponents had alleged. "We cut taxes for 95 percent of working families. We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college," he said, adding, "And we haven't raised income taxes by a single dime on a single person. Not a single dime."
Leaving aside the need for fact-checking--the validity of the president's assertion hinges on just what constitutes a cut in taxes--the president's $3.8 trillion budget for the upcoming fiscal year turns that statement on its head, even by the White House's own estimates. Released to the public Monday, the Obama budget as proposed increases taxes by more than $2 trillion over 10 years, without taking into account the potential impact on revenues if the cap and trade energy tax ever passes. With "cap and tax"--as its opponents call it--the tax burden in the budget would be even higher.
Moreover the Obama budget relies heavily on what some are already calling "backdoor tax increases" to pare down the record levels of debt and deficits ($1.6 trillion for Fiscal Year 2010 alone) the administration has run up in just one year in office. Obama's budget calls for an increases in taxes of $2.8 trillion over 10 years. This includes allowing many of the so-called Bush tax cuts to expire at the end of the current year and allowing the top rate (which often applies to small businesses as well as households and individuals) to go from 35 percent back up to 39.6 percent. And the White House is proposing--or at least forecasting--higher taxes on dividends, capital gains and other activity tied to economic growth and investment.
For a year we've had the spending. Now we get the taxes. What a difference a week makes.