Skewed "Fox Fact": Fox claims Obama raising taxes by allowing Bush tax cuts to expire
During Fox News' Your World, an on-screen graphic labeled a "Fox Fact" asserted: "Obama budget to raise 33% tax rate to 36%, hike 35% rate to 38.6% [sic]." In fact, President Obama's budget actually proposes to allow some of the Bush tax cuts to expire on the schedule enacted by former President Bush and a Republican-controlled Congress, which will have the effect of reinstating the 36 and 39.6 percent tax brackets.
"Fox Fact" claims Obama budget "raise[s]" 33 percent and 35 percent tax rates
From the February 1 edition of Fox News' Your World:
In fact, Obama budget allows some Bush tax cuts to expire on Bush's schedule
Obama budget: "Allow the Bush Tax Cuts for Households Earning More Than $250,000 to Expire." From Obama's FY 2011 budget:
Allow the Bush Tax Cuts for Households Earning More Than $250,000 to Expire. In the last Administration, those at the very top enjoyed large tax breaks and income gains while almost everyone else struggled and real income for the middle class declined. Our Nation cannot afford to continue these tax cuts, which is why the President supports allowing those tax cuts that affect families earning more than $250,000 a year to expire and committing these resources to reducing the deficit instead. This step will have no effect on the 98 percent of all households who make less than $250,000.
Allowing Bush tax cuts to expire will reinstate 36 percent and 39 percent tax brackets. The Bush 2001 and 2003 tax cuts temporarily lowered the 39.6 percent tax bracket to 35 percent and the 36 percent tax bracket to 33 percent. Consistent with Obama's proposal to let the Bush tax cuts expire for households earning more than $250,000, Obama's FY 2011 budget tables include a line item that provides for "reinstat[ing] the 36-percent and 39.6-percent rates for those taxpayers with income over $250,000 (married) and $200,000 (single)."
Bush and Republican Congress enacted expiration provisions for Bush tax cuts at the end of 2010. With the exception of changes to the estate tax the 2001 tax bill state that "[a]ll provision of, and amendments made by this act shall not apply ... to taxable, plan, or limitation years beginning after December 31, 2010." The 2001 tax bill passed the House and Senate with near-unanimous Republican support. The 2003 tax bill -- which also passed both houses with near-unanimous Republican support -- incorporated the sunset provisions from the 2001 tax bill.