Quick Fact: Wash. Times falsely claims Obama is raising all income tax rates
Research ››› ››› JOCELYN FONG
A Washington Times editorial falsely claimed that under president Obama's 2011 budget, "people currently in the 10 percent, 25 percent, 28 percent, 33 percent and 36 percent personal income tax rates will all face higher tax rates." In fact, Obama's budget proposes allowing the top two income tax rates to return to their pre-Bush tax cut levels -- affecting only income that exceeds $200,000 for individuals and $250,000 for families -- and leaving the other three income tax rates at their current levels.
From a February 2 Washington Times editorial:
Next year, despite Mr. Obama's frequent campaign promises not to raise taxes on those making less than $250,000, people currently in the 10 percent, 25 percent, 28 percent, 33 percent and 36 percent personal income tax rates will all face higher tax rates. This is not the first time that Mr. Obama has broken or tried to break this promise, but higher marginal income tax rates will completely obliterate yet another Obama promise.
Fact: Only top two income tax rates will increase under Obama's budget
Budget proposal extends Bush tax cuts for "98 percent of all households." The budget proposal states that "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." The budget includes $135 billion in fiscal 2011 and $3.097 trillion for 2011-2020 to "[c]ontinue the 2001 and 2003 tax cuts," but lists several "Upper-Income Tax Provisions" that would roll back the Bush tax cuts for individuals with income greater than $200,000 and families with income greater than $250,000.
CNN: Under Obama's budget "today's rates on income tax" would "remain the same" for everyone making less than $200,000. From a February 2 CNNMoney.com article, "Obama's budget: Impact on your taxes":
Let tax cuts expire: The 2001 and 2003 Bush tax cuts are scheduled to expire by 2011. Obama is sticking to his call to let those tax cuts expire for high-income households ($200,000 for individuals; $250,000 for families). The White House estimates close to $700 billion would be raised over 10 years.
This provision would raise the top two individual income tax rates to where they were in 2001, before passage of the Bush tax cuts. The 33% bracket would become 36%. And the 35% bracket would rise to 39.6%.
Lower and middle income households
Make tax cuts permanent: The president's budget assumes all the 2001 and 2003 tax cuts will be made permanent for everyone making less than $200,000 ($250,000 for couples), which is the majority of American households.
That means, among other things, that today's rates on income tax, capital gains and dividends would remain the same.