Election 2012

Obama's Fact-Challenged Tax Claim

Where are the "fact-checkers" when you need them?


Where are the "fact-checkers" when you need them?

On CBS News's "60 Minutes" Sunday night, President Obama said, "Taxes are lower on families than they've been probably in the last 50 years. So I haven't raised taxes."

As of Monday morning, neither the Washington Post's Pinocchio-awarding Fact-Checker, nor the Annenberg Public Policy Center'sFactCheck.org, nor the Tampa Bay Times' Pulitzer-Prize-winning Politifact.com had risen to this opportunity, so let us take a stab.

There are a variety of possible ways to measure the tax burden on American "families" over the past 50 years. Fortunately, Mr. Obama's own White House Office of Management and Budget provides a spreadsheet that summarizes federal tax receipts from 1940 through the present. Fifty years ago, in 1962, federal tax receipts were $99.7 billion. In 2011, they were $2.3 trillion. Far from being at a 50 year low, the taxes extracted from American families last year were about 23 times what they were fifty years ago.

Okay, but aren't there more families in America now than there were 50 years ago? Sure. The 1960 Census counted about 179 million Americans, while the 2010 Census counted about 309 million. The population hasn't even doubled, but the federal government's tax receipts have increased 23 times.

Okay, but what about inflation? President Obama's own Office of Management and Budget tries to deal with that question by using something called "constant (FY 2005) dollars." It's not as trustworthy a measure as, say, the price of gold, but since the White House uses it, it's worth at least a look. By this measure, federal taxes climbed to nearly $2 trillion in 2011 from about $660 billion in 1962. In other words, the taxes trebled, even as the population didn't even double.

Remember, too, that 1962 wasn't some kind of blissful Jeffersonian small-government era to which we can never possibly return. It was the height of the Cold War. President Eisenhower had only shortly before warned of the military-industrial complex. President Kennedy was going around giving speeches about how the tax burden was too high.

Okay, what about tax rates? By that measure, taxes aren't at a 50-year-low, either. Don't take my word for it: look at the chart from the Tax Policy Center operated by the Brookings Institution and the Urban Institute, two center-left think tanks whose work President Obama likes to cite when he claims that a President Romney would raise taxes on the middle class. Sure enough, in 1988 and 1989 the top marginal income tax rate was 28%. In 1990, 1991, and 1992 it was 31%. Today it is 35%.

Okay, that's the federal income tax rate. But what about the payroll tax rate? Here, too the Brookings-Urban Tax Policy Center has a useful chart. In 1962 the Social Security payroll tax was 6.25%, applied to the first $4,800 in wages. There was no Medicare tax, because Medicare did not yet exist. In 2011 — even after the two percentage point temporary payroll tax "holiday" — the tax was 10.4% applied to the first $106,800 in income, plus a 2.9% Medicare tax that applies to all wage income, with no cap. The tax, in other words, has more than doubled since 1962.

How about the federal gas tax? Fifty years ago, in 1962, it was four cents a gallon, according to the Tax Foundation. It's now 18.4 cents a gallon. Far from being at a 50-year low, it has more than quadrupled.

There is one measure — federal tax revenues as a percentage of GDP — by which taxes under President Obama have been at a 50-year low, at least according to the Office of Management and Budget. But if that's Mr. Obama's yardstick, then it also shows government spending and budget deficits have been at 50-year highs under Mr. Obama.

The second sentence of Mr. Obama's "60 Minutes" claim — "I haven't raised taxes" — is similarly slippery. Before Mr. Obama had been in office for a month he signed a law increasing the tobacco tax by $71 billion over 10 years. A 10% tax on tanning salons went into effect on July 1, 2010, a tax increase of $2.7 billion over 10 years. If Mr. Obama hasn't raised more taxes, it hasn't been for lack of trying; the only thing stopping him has been the Republican House of Representatives.

It would be a shame if voters fall for Mr. Obama's misleading claim that their taxes are at a 50-year low. But who can blame the voters, or, for that matter, the fact-checkers, if even Mr. Obama's opponent, Mitt Romney, buys into the idea. In the same "60 Minutes" program, Mr. Romney said taxes would remain essentially unchanged if he won. "I don't want a reduction in revenue coming into the government," Mr. Romney said.

It's enough to make one nostalgic for George W. Bush, or at least to prompt one to wish for a politician who can articulate the tax issue not in terms of what it means for the government's revenues but in the language of what it means for the individual.

NEXT: The Case Against Using Eminent Domain to Acquire "Underwater Mortgages"

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Don’t worry: once they raise taxes on the rich even more, it will all feel great.

    1. you mean “even more” than the 14% that Mitt pays? I pay more than 40% just in income tax and withholding. Not to mention the $850 health insurance corporate “tax.”

  2. Factcheck.org is similar to Snopes. You have to look at the man behind the curtain. The Annenburg foundation does not only fund things like “factcheck” but community organizing as well. Sound familiar? It should. Those “fact checkers” are paid by the same people who funded a certain President when he was a “community organizer” on the board with Bill Ayers.

    1. Why do you say “similar to Snopes”? Are you implying that Snopes has an agenda to distort the facts? I have heard that before from Troofers who are mad that Barbara Mikkelson doesn’t buy into their madness, but other than that no one I know thinks Snopes is biased.

  3. I am shocked, SHOCKED, that fact-checkers, the self appointed guardians of all that is true and good in political discourse, would let Obama’s lies exaggerations slide.

    1. I’d characterize Obama’s statement as a lie, not an exaggeration. He said he didn’t raise taxes. That’s a lie. He created the ObamaCare tax. He limited the deduction for flexible spending accounts for health care, he raised the Medicare payroll tax, he applied Medicare taxes to non-payroll income, the Cadillac tax on high cost health plans, the tanning tax, and the tobacco tax.

  4. Here’s the notoriously liberal Chamber of Commerce backing Obama up.


    And, of course, Ira Stoll admits as much in his article, and tries to gloss over it with snark.

    1. The study quoted in your link was effected by USA Today.
      Wake up.

    2. Nobody gives a shit who backs up his lies, the proof is in the math, not other peoples opinions.

    3. The Derider| 9.24.12 @ 6:55PM |#
      “Here’s the notoriously liberal Chamber of Commerce backing Obama up.”

      Deidiot, are your familiar with the phrase ‘appeal to authority’?
      You could look it up (and maybe not look so idiotic).

      1. SEVO, I’ve told you this many times, but “appeal to authority” is not a logical fallacy.

        That’s “appeal to false authority”.

    4. Just FYI, the COC supports the kind of cronyism and corporate welfare that libertarians routinely rail against. It’s hardly a bastion of liberty-minded people. It’s an interest group for business.

    5. So you gave us a reference to a reference to a claim. Fuck, I’m convinced.

      1. A claim which Ira Stoll admits is true in his column.

        As a ratio of GDP, taxes are the lowest they’ve been in 50 years.

        1. Economists screwed the pooch when they decided to measure taxes as a percentage of GDP, instead of on a per capita inflation adjusted basis. It’s nonsensical that government spending should automatically rise simply because capitalists have been successful.

          And to your direct point, today’s taxes might be low as a percentage of GDP but how long can that really last given the unpatriotic nature of our current deficits? You must be feeling a lot luckier than I.

          1. So it’s your contention that if Obama left tax rates the same, and the economy grows, that Obama actually raised taxes because the government is collecting more revenue?

            1. Obama didn’t leave taxes the same. maybe didn’t change rate but added new taxes as cited in the article as well as the taxes in Obamacare. The other inconvenient truth for your argument is that the economy is not growing. If it is, it’s barely growing. That means that the deficits are driving GDP up because govt spending is counted in the GDP figure. So, if people are in a recession and therefor contributing less revenue to govt, but govt spends huge deficits, that would make revenues look lower as a percentage of GDP.

            2. WTF is wrong with people like you?
              Obama said he did not raise any taxes. He did, in fact, raise some taxes. He lied. Yet you blindly ignore it and suck his cock instead with deflection. Who gives a fuck about taxes as a percentage of GDP? I assume you’re either a paid advocate or a gov’t employee, which is redundant, I know.

              1. OMG: my tanning sessions and cigs are going to cost more!

            3. excellent point

        2. The other two claims are also true, and at least as relevant. If you’re bragging about low taxes while running a trillion dollar deficit in perpetuity, you’re doing it wrong.

          1. Ok, so instead of a “fact check” this is a “whiny dodge”?

        3. And the reason why tax revenues are so low right now is because the economy collapsed four years ago and we’re stuck in the worst “recovery” we’ve had in decades.

          But you already know that, don’t you Joe from Lowell, you little anonypussy.

          1. yup. don’t forget that govt spending is counted in GDP so the deficits make govt revenues look smaller as a percentage of GDP.

  5. “I don’t want a reduction in revenue coming into the government,” Mr. Romney said.

    Yeah, that was genius.

  6. Just more bullshit from the bullshitter-in-chief. Have you seen the recent Obama ads? Among other bullshit, he brags about plans to cut the deficit. WTF??? The fact that this incompetent lying criminal has a good chance at winning in November is dramatic proof of the complete idiocy of American voters. A voter with even an ounce of intelligence would vote for anybody, even Mickey Mouse or Goofy, instead of this clown.

    1. It’s actually stunning how brazenly he lies with no consequences at all.

    2. He promised to cut the deficit in half by the end of his first term. The deficit was about $800 billion when he took the helm. It’s now about $1.2 trillion.

      Do the math.

      1. Was this promise made before or after the economy cratered?

        1. That’s the ticket.

          Or maybe politicians shouldn’t make wild ass promises?

          I have no problem with the ‘eye candy’ comment. David Brooks covered that ground more than 4 years ago with his ‘perfectly creased pants’ and ‘prominent package’ comments.

        2. After. Unless you think the economy was rocking in 2008 a couple months before the election. It seemed to be in a little trouble at that point to me.

          Besides, since we’ve had 3 years of recovery and positive economic growth with such rosy unemployment numbers, all attributable to Obama, we could probably get to that by now, couldn’t we?

    3. Plenty of smart people on a dole of some sort will vote for Obama. And “dole” covers anyone from food stamps to his buddies at Goldman Sachs.

      1. If you buy your own health insurance on the private market, and have no access to a “pool,” you should like the health care law. I, for one, am sick of subsidizing big-firm employees, government workers, and the uninsured.

  7. ‘Fact challenged’ is an accurate way to describe everything that comes out of president downgrade’s mouth. Hell, it is an accurate descriptive of almost everything that comes from the left.

  8. The most irritating is when Obama and his disciples say that they want to pay their fair share.

    WTF does fair share mean?? Can anyone explain????

    1. “Fair share” means the “greedy rich” must pay MOARRRR!!!!

    2. Don’t hold your breath waiting for that explanation. They can’t explain, and they won’t even if you ask one of them point-blank. It’s just emotional bullshit.

    3. Just keep sending money, someone will let you know when to stop.

      1. Lol. The beatings will continue until morale improves!

    4. The answer I usually get is: “Why can’t “they” just pay a little more?”

  9. I haven’t raised taxes

    I have a very recent SCOTUS decision that says otherwise. And Obamacare with its PenalTax was rammed through Congress with nary a Team RED vote. It’s Obummer’s biggest “accomplishment” yet he tries to disown it?

    Slimy fuck.

    1. Liberals are actually trying to say Obamacare was a grand compromise, and it’s a crappy law because Democrats had to compromise to get it passed. Amazing how short people’s memories are.

      1. The only compromise was on the against side. A few Donks did vote against the thing.

  10. Obamacare penalty tax?

  11. Romney also just said, during a speech at the Clinton Initiative, that the USA should be shaping world events. Ugh.

  12. “It would be a shame if voters fall for Mr. Obama’s misleading claim that their taxes are at a 50-year low. But who can blame the voters, or, for that matter, the fact-checkers, if even Mr. Obama’s opponent, Mitt Romney, buys into the idea. In the same “60 Minutes” program, Mr. Romney said taxes would remain essentially unchanged if he won. “I don’t want a reduction in revenue coming into the government,” Mr. Romney said.”

    The above paragraph says it all. Shit Sandwich or Giant Douche? Or the guy they won’t let in the debates who nobody has heard of?

  13. What a moronic argument. He’s talking about families, you talk about total tax collections, including corporations. Beating up a straw man. I guess I’ll take everything on Reason.com with a big chunk of salt.

    And who raised all those other taxes you want to talk about? You don’t say, and I can guess why — the GOP either raised them or agreed to raise them.

    It’s bullshit like that which costs the libertarians and the GOP support of rational, thinking people.

    1. So corporate taxes don’t matter?

      Are you one of those people that don’t understand that “corporate” taxes are paid by the consumer and employee, which is, um, you and me?

      It’s bullshit like that which infuriates the rational, thinking people of this country.

    2. Tell you what, “brainski”–form a competent rebuttal to this, using basic math, and your argument might have some teeth:


Please to post comments

Comments are closed.