At a fundraiser in Oakland, Calif., on Monday, President Obama told two big whoppers, one about his own tax plan and one about Mitt Romney’s. On his own plan, Obama said:
I’m also going to ask anybody making over $250,000 a year to go back to the tax rates they were paying under Bill Clinton
He either doesn’t know what he’s proposed or he is lying. The top marginal rate is now 35 percent. Obama wants it to go back to 39.6 percent plus the 3.8 percent Medicare Insurance tax that is part and parcel of Obamacare. That is a marginal rate of 43.4 percent for ordinary income. Under the Bush tax cuts, dividends were taxed at 15 percent. Under Obama such income would also go up to the 43.4 percent tax rate.
This is why tax planners and CPAs all over the country are advising their clients with letters and newsletters with such titles as “Planning for the new 2013 Medicare taxes on e-level earned and investment income.” (Disclosure: Mr. Right Turn is a CPA.)
In fact, the top marginal tax rate Obama is proposing is nearly 10 percent higher (9.6 percent) than it was under Bill Clinton. It is a 24 percent increase from what these taxpayers are currently paying.
In 2010 Obama recognized that expiration of the Bush tax cuts would have a ruinous effect on the economy. In the fourth quarter of 2010, gross domestic product growth was at 3.2 percent. It is now under 2 percent. Go figure.
The tax hike, we are told, is about “fairness. What it is not about is going back to the Clinton era, and it certainly isn’t about stimulating the economy.
As an aside, does Obama want to go back to the spending levels under Clinton? Does he think he can match Clinton’s growth rate and job-creation record? Listen, if he’s willing to go back to 2007 spending levels, dump Obamacare and go to the 39.6 marginal rate that would be one thing, but he’s got another arrangement in mind.
While misrepresenting his own tax plan, Obama is also not being truthful about Romney’s tax plan. On Monday he said, “My opponent’s entire plan, his whole plan for economic renewal, is more tax cuts for the wealthy.” Now, he can say it until the cows come home, but it doesn’t make it true. Romney’s plan cuts tax rates for all Americans and phases out deductions for upper-income taxpayers. He has said he will preserve the code’s current progressivity and make it revenue neutral. You can say he should identify specific base-broadeners, but it is false to say his plan is to decrease the amount of taxes paid by the rich.
Obama, of course, leaves out the remainder of Romney’s economic plan, including domestic energy development, international trade deals and improving education and training. Oh, and repealing Obamacare, which most voters dislike.
Now Obama, of course, was raising money, not trying to accurately set out his opponent’s agenda. But all those pundits in a knot about Romney taking Obama “out of context” you would think would have an interest in dispelling the far more egregious misrepresentations coming out of the president’s mouth. But then again, maybe not.
UPDATE (9:44 a.m.): I was wrong. The Romney camp didn’t put up an ad with the full context of Obama’s remarks. The RNC did. How could the Obama people have not seen that coming?