Krugman: Obama rolled back the Bush and Reagan tax cuts on the top 1%

[progree]

According to the new tables ( https://www.irs.gov/uac/SOI-Tax-Stats-Individual-Statistical-Tables-by-Tax-Rate-and-Income-Percentile ), the average income tax rate for 99 percent of Americans barely changed from 2012 to 2013, but the tax rate for the top 1 percent rose by more than four percentage points. The tax rise was even bigger for very high incomes: 6.5 percentage points for the top 0.01 percent.

These numbers aren’t enough to give us a full picture of taxes at the top, which requires taking account of other taxes, especially taxes on corporate profits that indirectly affect the income of stockholders. But the available numbers are consistent with Congressional Budget Office projections of the effects of the 2013 tax increases (http://krugman.blogs.nytimes.com/2015/12/30/presidents-and-the-economy/ ) — projections which said that the effective federal tax rate on the 1 percent would rise roughly back to its pre-Reagan level. No, really: for top incomes, Mr. Obama has effectively rolled back not just the Bush tax cuts but Ronald Reagan’s as well.

Those higher rates on the 1 percent correspond to about $70 billion a year in revenue. This happens to be in the same ballpark as both food stamps and budget office estimates of this year’s net outlays on Obamacare. So we’re not talking about something trivial.

More: http://www.nytimes.com/2016/01/04/opinion/elections-have-consequences.html?_r=1

A DU thread on this: http://www.democraticunderground.com/10027496324

He also mentions a 17 million drop in the number of uninsured Americans between 2012 and the first half of 2015.

Anyway, I think a mention of this belongs in the Obama group. So many people are completely and totally unaware that he raised the top bracket marginal tax rate from 35% to 39.6% (back to the old Clinton rate). Add in the 0.9% Medicare surcharge on the top 2 tax brackets (a feature of the ACA legislation), and the top marginal tax rate actually rose to 40.5% (on earned income).

As for capital gains -- when the ACA's 3.8% Net Investment Income Tax (NIIT) on the top 2 brackets is included, the actual long term capital gains tax rate for the top tax bracket (which is about where the top 1 percentile begins), is 23.8%, even higher than under Clinton, and 23.8/15.0 = 1.59 times higher than under Bush.

Details: http://www.democraticunderground.com/?com=view_post&forum=1002&pid=6503186

You will sometimes encounter trolls posting on DU that Obama kept 82% of the Bush tax cuts -- implying he's almost as bad as Bush. What said trolls leave out is one big important detail - that he kept the Bush tax cuts for the bottom 98%, while raising taxes on the top 2%.

[RandySF]

1. True but to be honest

He hit a lot of us who are not classified as poor but can use every dollar we can keep.

[progree]

2. How so? Are you in the top 2%?

The 2nd to highest tax brackets starts at about the top 2% income level, and the highest tax bracket starts at about the top 1% income level.

[RandySF]

3. Nowhere close

But when the tax cuts lapsed I lost a chunk of pre tax benefit for train fare. I also saw higher Medicare payroll and Medicare taxes. All this when my new job after being unemployed pays less than the old job.

[progree]

4. I hadn't heard that about Bush cutting Medicare taxes or providing a tax benefit on train fare

But when the tax cuts lapsed I lost a chunk of pre tax benefit for train fare. I also saw higher Medicare payroll and Medicare taxes. All this when my new job after being unemployed pays less than the old job.

So these were all tax breaks under Bush that Obama / Congress let expire at the end of 2012?

This is all news to me. Can you supply me with more details? Thanks.

Oh, he did add a 0.9% Medicare surcharge on the top 2 tax brackets, affecting roughly the top 2%. But nothing I know of affecting the bottom 98%.

[Stellar]

5. Thanks for sharing...

And I bookmarks the link in your siggyline....good info!

[progree]

6. Thanks!

And I bookmarks the link in your siggyline....good info!

Thanks much for that too!

[Cha]

7. Thank you for this progree.. yes, there are those who like to

ignorantly diss President Obama around here.. thank you for setting the record straight.

[yallerdawg]

8. The most illuminating tax "increase" back then...

was the expiration of the Recovery Act payroll tax cut used for stimulus.

While the Republicans were screaming and yelling about taxing the 'job creators,' every working man, woman and child in America had a tax increase! I waited and waited for one effing Republican to even mention this. I guess working people are not their particular constituency.

[progree]

9. Oh, I remember that -- the Republicans were EXPLICIT in saying that particular tax cut

had to be "paid for" (by tax increases elsewhere or spending cuts). Whereas all the many other kinds of tax cuts which included tax cuts for the top (and going mainly to the top) didn't have to be "paid for" because they already paid for themselves, by stimulating the job creators to get out of bed earlier and creating yet more jobs or somesuch, thus bringing in more tax revenue from all the additional new job holders blah blah.

By the way, one troll, no longer part of the DU community, tried to make it sound like -- in the context of Obama letting some Bush tax cuts expire -- that the 2% payroll tax holiday was one of those. But actually the 2% payroll tax holiday was begun by Obama (and Congress) and ended by them 2 years later. (And I know he knew that because we had a similar interchange about this some time before). Similarly for the 2-year Making Work Pay stimulus measure that preceded it and targeted those in the lower- and middle- income.