Joe Wilson Was Right
Because he does that very often. Here are just three example compiled by Scott Sumner
1. Taxes: The president defended his proposal by saying that, for high-income taxpayers, “the tax rates would just go back to where they were under President Clinton.” The president reminded his listeners that the economy grew at a rapid clip during the Clinton years, adding tens of millions of new jobs.
[Added below is an excerpt from Sumner's linked text, which was written in 2010]
In 2010, the top income tax rate bracket for ordinary income is 35 percent. Besides wages and interest income, this income category includes profits from pass-through business firms—sole proprietorships, partnerships, and S-corporations. Under the president’s proposal, the top bracket will rise to 39.6 percent. A stealth provision that phases out high-income taxpayers’ itemized deductions will also be reinstated, adding another 1.2 percentage points to the effective tax rate, bringing it to 40.8 percent. Wages and some of the pass-through income will also remain subject to a 2.9 percent Medicare tax. These 40.8 and 43.7 percent tax rates, which will apply in 2011 and 2012, match the 1994 to 2000 rates—the same top bracket, stealth provision, and Medicare tax were in place then.
But the picture changes in 2013. Under the healthcare law adopted in March, the Medicare tax will rise that year, from 2.9 to 3.8 percent. Also, a new 3.8 percent tax, called the Unearned Income Medicare Contribution (UIMC), will be imposed on high-income taxpayers’ interest income and most of their pass-through business income that’s not subject to Medicare tax. So, under the president’s proposal, virtually all of top earners’ ordinary income will be taxed at 44.6 percent, starting in 2013. We’re not just going back to the Clinton-era rates of 40.8 and 43.7 percent.
A similar pattern holds for capital gains. Under the president’s plan, in 2011 and 2012, the top rate on gains, now 15 percent, will go to 20 percent, with the stealth provision adding 1.2 percentage points, sending the tax back to its 1997–2002 level of 21.2 percent. Starting in 2013, though, capital gains will also be hit by the UIMC, pushing the rate to 25.0 percent. Under the president’s proposal, virtually all of top earners’ ordinary income will be taxed at 44.6 percent, starting in 2013. We’re not just going back to the Clinton-era rates of 40.8 and 43.7 percent.
Dividends may, or may not, face a much steeper tax increase. If Congress does nothing, the top dividend tax rate will rise from 15 percent today to the Clinton-era effective rate of 40.8 percent in 2011 and 2012, with the UIMC pushing the rate to 44.6 percent in 2013. To his credit, though, President Obama has called for dividend tax rates 19.6 percentage points below these levels, leaving dividends taxed much more lightly than under Clinton. It remains to be seen whether congressional Democrats will go along.
2. Spying: WASHINGTON – The White House and State Department signed off on surveillance targeting phone conversations of friendly foreign leaders, current and former U.S. intelligence officials said Monday, pushing back against assertions that President Obama and his aides were unaware of the high-level eavesdropping. Professional staff members at the National Security Agency and other U.S. intelligence agencies are angry, these officials say, believing the president has cast them adrift as he tries to distance himself from the disclosures by former NSA contractor Edward Snowden that have strained ties with close allies
3. Healthcare: President Obama repeatedly assured Americans that after the Affordable Care Act became law, people who liked their health insurance would be able to keep it. But millions of Americans are getting or are about to get cancellation letters for their health insurance under Obamacare, say experts, and the Obama administration has known that for at least three years.