Ira Stoll
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’s FactCheck.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.
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