Rove, Hannity misleadingly suggest Obama is raising taxes by allowing Bush tax cuts to expire

Rove: “It's a tax increase if you allow” tax cuts to expire. During the segment, Rove claimed: "[P]art of what [the Obama administration is] claiming is part of the $800 billion in tax cuts is continuing the tax code as it now exists. Well, that's not a tax cut if it's already in the tax code. It's a tax increase if you allow that to expire. And that's exactly what's going to happen next year when all these provisions of the Bush tax cut expire and that is taxes are going to go up and that's a tax increase."

Hannity: “Why wouldn't everybody understand their taxes are going up?” Host Sean Hannity mentioned that “the Bush tax cuts are expected to expire” and concluded: “Why wouldn't everybody understand their taxes are going up?”

Bush tax cuts set to expire on Bush's schedule

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 states: “All provisions 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.

Wash. Post: Sunsets allowed GOP to “boost the size of the tax cut” while “hiding its true cost” and getting Dem support. In a May 27, 2001, article, The Washington Post reported: “By terminating the tax cuts at the end of 2010, negotiators were able to avoid some tough decisions. Since they could now distribute the same amount of money over nine years rather than 10 years, they effectively boosted the size of the tax cut while at the same time hiding its true cost.” The Post reported in a May 24, 2003, article that “by 'sunsetting' all the tax cuts well before the bill's official 2013 expiration date, congressional tax writers took a measure that otherwise would have cost the Treasury more than $800 billion over the next decade and crammed it into a $350 billion price tag that could garner just enough support to pass the Senate. Democrats and Republicans alike predict that future Congresses and administrations will not let the tax cuts expire.”

Obama budget would extend tax cuts except for upper-income earners

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.

Budget calls for “Upper-Income” tax increases “devoted to deficit reduction.” From the White House's proposed budget:

Rove accuses administration of “duplicity” in claiming tax cuts

Rove on Obama's tax cuts: “Who are they kidding?” Also during the segment, Rove commented that “this administration and these Democrats in Congress expect us to believe that, somehow, they're lessening our tax burden. Who are they kidding?” Later, Rove said: "[L]ook, it's one thing to raise our taxes, it's another thing to try and make us pretend that our taxes are not going up." Rove then said that the administration is engaging in “duplicity and hypocrisy.”

Recovery Act included $288 billion in tax relief, Obama budget extends tax cut

Recovery act included significant tax relief for individuals, families, and businesses. As Media Matters for America has noted, the recovery act contained $288 billion in tax relief, including the Making Work Pay tax credit, a two-year annual credit of $400 per individual or $800 for families. In addition, the recovery act included a temporary increase in the earned income tax credit, a temporary increase in the refundable portion of the child tax credit, an increase in the first-time homebuyer tax credit, and tax incentives for businesses, among others.

CBS: “Poll Reveals Most Americans Don't Know They Got a Tax Cut.” A February 5-10 New York Times/CBS News poll found that only 12 percent of respondents “think the Obama Administration has ... decreased taxes for most Americans.” CBS News wrote that "[o]f people who support the grassroots, 'Tea Party' movement, only 2 percent think taxes have been decreased, 46 percent say taxes are the same, and a whopping 44 percent say they believe taxes have gone up." Media Matters has noted that conservative media figures including Steve Moore of The Wall Street Journal, columnist S.E. Cupp, and Fox Forum columnist Peter Roff have denied that Obama cut taxes.

Budget request includes tax cuts. The budget proposal includes a call to "[e]xtend [the] making work pay tax credit in 2011." The Office of Management and Budget further stated: “The Recovery Act created the Making Work Pay tax credit, a refundable income tax credit, which offsets the Social Security payroll tax on up to the first $6,450 of earnings for about 95 percent of all American workers. ... As part of its plan to restore health to the economy, the Budget proposes to extend the Making Work Pay tax cut for one year.”