A Taxing Fact Check
Wednesday, 27 January 2010 23:00This morning, following the President’s State of the Union speech last evening, Americans for Tax Reform sent out a ‘Fact Check’ document this morning. I have highlighted two examples here: MYTH: “We cut taxes for 95 percent of working families…we haven’t raised income taxes by a single dime on a single person. Not a single dime.”
FACT: It’s mathematically impossible to cut taxes for 95 percent of working families. According to the IRS, fully one-third of all tax returns owed no income tax last year. Nearly 20 percent of returns had neither an income nor a payroll tax liability. These people cannot see their taxes cut any further. Anything given to them is pure spending.
Obama, Pelosi, and Reid may not have raised income taxes last year, but they surely tried to. Last year’s administration budget submission had dozens of tax hikes. The health care legislation they are still pushing has 18 separate tax hikes. All told, ATR has calculated that President Obama proposed or supported $2.1 trillion in tax hikes in 2009. And let’s not forget that he signed into law a $65 billion tax hike on cigarette smokers 16 days into his administration. The median income of a smoker is $36,000.
MYTH: “To encourage these and other businesses to stay within our borders, it's time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs in the United States of America.”
FACT: Obama is no doubt referring to his tax hikes from last year’s budget. ATR has compiled a series of one-pagers detailing his $210 billion in proposed tax hikes on American companies who have overseas income. How raising taxes on American companies will incent them to remain in the United States is a mystery.
The reason these tax breaks are in place is to avoid double taxation of international corporate income. To take away these tax breaks is to tell an American company that they will potentially have to pay taxes twice on the same income.
Information courtesy of Americans for Tax Reform