Last night on CBS, President Obama told Steve Kroft, “I haven’t raised taxes. I’ve cut taxes for middle class families by an average of $3,600 per typical family.” That makes it sound like Obama has cut taxes for middle class families by $3,600 a year. The truth is far different.
In 2009 and 2010, Obama’s “Making Work Pay Tax Credit” did cut middle class income taxes by $800 a year, totaling $1,600 over a two year time frame.
In 2011, Obama’s payroll tax cut lowered workers’ Social Security tax withholding rate from 6.2 percent to 4.2 percent. The White House claims that this cut saves a family making $50,000 a year about $1000 a year. At the end 0f 2011, Congress extended the cut for 2012. So over two years, a typical American family saved $2,000. Added together, Making Work Pay and the payroll cut did lower tax bills by $3,600 over four years.
But, these were all temporary cuts. When the Making Work Pay Tax Credit expired in 2011, middle class families saw there tax bills rise by $800 a year. And when the payroll tax cut expires at the end of this year, middle class families will see their tax bill go up by $1000 a year.
Not only does Obama have no plan of extending the payroll tax cut, but Minority Leader Nancy Pelosi, D-Calif., told reporters today that she would prefer the tax cut end as well.
And these will be just the beginnings of the Obama middle class tax hikes. As Obama’s legislative affairs director, Rob Nabors, told Democratic Senators last year, “You could raise all the taxes you want on millionaires … and it would never raise enough.”