How the Obama campaign is trying to deceive you on the economy.
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“The Distribution of Household Income and Federal Taxes, 2008 and 2009,” issued by CBO on July 10, reports that the top 1% of income earners paid 39% of federal individual income taxes in 2009, while earning 13% of the income. That means their share of federal income taxes was three times their share of income.
And that is down from 2007, before President Obama was even elected. In that year, after 25 years of Reagan Republican tax policies, the top 1% paid 40% of federal individual income taxes. That was more than double the 17.6% of federal individual income taxes paid by the top 1% when President Reagan entered office in 1981.
Also in 2007, again before Obama was even elected, and after 25 years of Reaganomics, the bottom 40% of income earners on net as a group paid less than 0% of federal income taxes. Instead of paying at least some income taxes to help support the federal government, the federal government paid them cash through the income tax code.
Does that reality sound like what you hear in President Obama’s deceiving speeches?
CBO further reported that in 2009 the top 20% of income earners, those earning more than $74,000, paid 94% of federal individual income taxes, virtually all of the net total. That was 85% more than the share of national income they earned.
Yet, in that same year, the middle 20% of income earners, the true middle class, paid 2.7% of total federal individual income taxes on net, while earning 15% of before-tax income. And the bottom 40% of income earners, instead of paying some income taxes to support the federal government, were paid by the IRS cash equal to 10% of federal individual income taxes on net.
That means altogether the bottom 60% of income earners, which includes the middle class, paid less than 0% of total federal individual income taxes as a group on net. Instead, as a group, they received net cash payments from the IRS on net.
Ignorant or Lying?
The Obama campaign continues its Calculated Deception in saturating the Internet with advertising alleging that Mitt Romney’s “tax plan” would raise taxes on the middle class and working families. Not only has Romney proposed no such thing. House Republicans have already voted for Rep. Paul Ryan’s tax reform plan that would cut the federal income tax rate for all families earning less than $100,000 to 10%, and Romney has endorsed that as well.
Indeed, the whole history of Republican tax policy going back to Reagan is that Republicans have never raised income taxes on the middle class and working people. Quite to the country, Reagan and his Republicans abolished federal income taxes on what the Left calls the working class, and almost abolished them for the middle class, as the official data discussed above shows.
That began with the Earned Income Tax Credit (EITC), which grew out of then Governor Ronald Reagan’s famous testimony before the Senate Finance Committee in 1972, where he proposed exempting the working poor from all Social Security and income taxes as an alternative to welfare, with the credit serving as a way to offset payroll taxes for the poor and low income workers. As President, Reagan cut federal income tax rates across the board for all taxpayers by 25%. He also indexed the tax brackets for all taxpayers to prevent inflation from pushing working people into higher tax brackets.
In the Tax Reform Act of 1986, President Reagan reduced the federal income tax rate for middle and lower income families all the way down to 15%. That Act also doubled the personal exemption, shielding a higher proportion of income from taxation for lower income workers than for higher income workers.
Newt Gingrich’s Contract with America adopted a child tax credit of $500 per child that also reduced the tax liabilities of lower income people by a higher percentage than for higher income people. President Bush doubled that credit to $1,000 per child, and made it refundable so that low-income people who do not even pay $1,000 in federal income taxes could still get the full credit. Bush also adopted a new lower tax bracket for the lowest income workers of 10%, reducing their federal income tax rate by 33%.
That is how we reached the point by 2007 where the bottom 40%, or even 60%, of income earners as a group on net were being paid by the federal income tax code instead of paying federal income taxes. So when then candidate Obama said in 2008 that Republicans cut taxes for the rich, but haven’t “given a break to folks who make less,” was he ignorant or lying?
Obama’s lying allegation regarding Romney flies in the face of that reality. Rather, it is Obama who has raised taxes on the middle class, in gross violation of his 2008 campaign pledge not to do so. That has been held, in fact, by the United States Supreme Court, which ruled that the individual mandate in Obamacare is constitutional precisely because it is a tax. And that individual mandate tax applies to the middle class, and working people. Moreover, Obamacare includes several other tax increases that apply to the middle class, and working people, such as the new tax on medical devices, the new tax on health insurance, the new tax on prescription drugs, and others.
Blame Obama on the Democrat Party
The Obama campaign is trailblazing new realms of dishonesty in the history of American politics, bringing to America for the first time Soviet-style propaganda that flies in the direct face of reality, buttressed by dishonest, party-controlled media operations. Moreover, it is a classically abusive Saul Alinsky trick to accuse your opponent of planning to do exactly what you have done, as Obama does in continually accusing Romney of proposing to raise taxes on the middle class. Only an idiot can fail to see that the entire Democrat party’s spending plans require sweeping tax increases on the middle class.
The bottom line is that the entire Democrat party needs to be held responsible for Obama, the abusive dishonesty of his campaign operation, and the accelerating downward spiral of America his neo-Marxist policies are producing. Those policies in fact are not unique to Obama, but represent the heart and soul of today’s Democrat party. This is a Paul Revere moment for the American people. The only way to save your country is for each of you to rally your friends, neighbors, and relatives this fall to come out in force and defeat the entire Democrat party root and branch.