President Obama’s Tax-Hike Hypocrisy

In Brief:

  • President Obama proposed a $1.8 trillion tax increase on hardworking families.

  • House Republicans proposed revenue-neutral tax reform to create jobs.

  • President Obama invents phony statistics to mask his tax-hike hypocrisy.


The President claims the House Republican budget hands out “massive tax cuts to households making more than $1 million a year.” But that’s simply not true.

This budget calls for revenue-neutral tax reform that both broadens the tax base and lowers tax rates for all Americans. Under our budget, the tax code would raise the same amount of revenue as we’re taking in today, but in fairer, simpler, more competitive way.

The President and his allies say there’s no way we can lower rates without making the middle class pay more. But the tax code is littered with special preferences, exclusions and deductions that add up to more than $1 trillion per year—or over $10 trillion over a decade. Upper-income households are much more likely to use these preferences. [1]

For instance, the top 1 percent of taxpayers reap about three times as much benefit from tax preferences (excluding refundable credits) as the middle class.[2] So this budget calls for tax reform that would curb or eliminate these special preferences.

The majority of non-corporate small businesses pay taxes under the individual-income-tax system. According to the U.S. Treasury Department, over 60 percent of non-corporate businesses have profits in excess of $1 million.[3]

Small businesses generate 60 to 80 percent of net new jobs annually and employ about half of all private-sector employees, according to the Small Business Administration (SBA).[4]

So raising the individual-income-tax rate hurts successful small businesses that are the engines of job creation in our economy. 

It’s also worth pointing out that only the President’s budget calls for more revenue. In fact, his budget would raise taxes by $1.8 trillion over the next ten years.

It’s more than possible to reform the tax code without hurting middle-class families. In fact, tax reform is one of the best ways to get our economy growing again—if only the President would cooperate.

[1] “National Taxpayer Advocate 2012 Annual Report to Congress, Volume One” Internal Revenue Service