There is just so much inaccurate information being bandied about in the media (and in this thread), that I just have to post some corrections.
In the June 4, 2012 issue, Business Week magazine had a small article titled, “An Empty Chair Would’ve Spent As Much”. It states, “The GOP blames President Obama for the $4 Trillion rise in the nation’s debt to $15 Trillion. Yet, the numbers show yearly deficits would have exploded no matter who occupied the White House during the slow recovery from 2009 to 2011.”
In support of that statement, they listed the following realities:
Tax receipts dropped by $1 Trillion
Mandatory spending increases on services for the poor and the elderly accounted for 77% of the increase in the deficit.
Higher spending on defense & veterans accounted for 11% of the increase in the deficit
Other gov’t programs accounted for 12% of the increase in the deficit
As to the usual claim about “Obamacare” resulting in the largest-ever increase in US taxes, here are the “top 15” tax increases in our history, as measured as a percentage of the GDP (the only accurate way to compare taxes from different time periods):
Revenue Act of 1951 1.52%
Revenue Act of 1950 1.33%
Temporary Surcharge of 1968 1.09%
Excess Profits Tax of 1950 .97%
Reagan Tax Increase of 1982 .80%
Tax increase of 1966 .60%
Oil Windfall Tax of 1980 .50%
Clinton Tax Increase of 1993 .50%
Bush Tax Increase of 1990 .49%
Obama Health Reform .49%
Tax Reform Act of 1969 .30%
Deficit Reduction Act of 1984 .30%
Budget Reconciliation Act of 1987 .24%
Tax Reform Act of 1986 .22%
Social Security Tax of 1983 .20%
So, despite the faux facts spewed by Fox News, Rush Limbaugh, and others with a very obvious agenda, the reality is that the tax increase resulting from “Obamacare” (.49%) is very far from the biggest tax increase in our history, and–in fact–pales by comparison with the total of 1.76% increases in federal taxes during the Reagan Administration. Isn’t it ironic that the president whom most people will say was the big tax cutter (in his first year in office) wound up being the biggest tax increaser of them all? It just goes to show how the public’s perceptions can be altered if you manipulate them in the right way.
Just bear in mind that I am not criticizing Mr. Reagan for all of his tax increases, as they were necessary to keep the deficit from exploding even more than it did during his term in office. If Mr. Bush had not reduced taxes during a strong economy, while simultaneously waging two wars, we would not be in the position that we are in today.
Then we have that myth about stifling job growth by increasing taxes on the wealthiest Americans. Here are the facts:
During the Clinton Administration, the top tax rate was 39.6%, yet there were 23 million jobs created during those years.
Contrast that with the top tax rate of 35% during the Bush years, with a total number of just 3 million jobs created.
Or to put it another way, the average annual job growth rate during the higher-tax Clinton years was 2.4%, while the average annual job growth rate during the lower-tax Bush years was .2%
While I don’t have the exact figures in front of me, let us not forget that the growth of the US economy during the VERY high tax years of the Eisenhower Administration was like an explosion. Tens of millions of middle-class Americans somehow managed to attain “the good life” during the '50s, despite the reality that the “job creators” were paying over 90% taxes on their income at that time.
The only difference between then and now is that the wealthiest Americans did not have an effective propaganda machine in those days, as they do now. Now, they are able to spread the fable that they will somehow just give up and stop expanding their businesses if their taxes are increased by a couple of percentage points, without mentioning the fact that these “excessive taxes” are less than half of what they and their parents were paying during the boom years of the 1950s.
And, as to the oft-heard statement that Mr. Obama is “gutting” the defense budget, the reality is that he is lowering it to the same level that it was at in 2007 under Mr. Bush–when we were waging two simultaneous wars. Since he came into office, Obama has increased the defense budget to a great extent, and is now merely reducing that budget to the earlier Bush-era levels. Since we are no longer waging two simultaneous wars, and will soon be out of Afghanistan, this 2007-level budget amount actually provides very generous funding for the military.