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Can we reduce our deficit, encourage job growth, and invest in education or energy just by returning upper earners to the Clinton era tax rates?

Welcome to VoteFacts.  During a presidential debate, President Obama insisted that,

"I have said that for incomes over $250,000 a year that we should go back to the rate that we had when Bill Clinton was president...  And the reason this is important is because by doing that we can not only reduce the deficit, we can not only encourage job growth through small businesses, but we're also able to make the investments necessary in education or in energy."

(View video in its entirety by dragging start button backward.  Quote begins at 17 minutes, 56 seconds)

Wow, according to President Obama, we sure can do a whole lot with the extra $50 billion a year.  A mere 3-4% increase for that group and we can reduce the deficit, encourage small business growth, and make investments for schools or energy.  (We looked at the differences between the Obama plan and tax rates under the Clinton administration here before.)  Can it be that simple?  A closer look at reports by  the Congressional Research Service and the Tax Policy Center reveals this:

The Obama Administration has proposed allowing the Bush tax cuts to expire for high income taxpayers and permanently extending the tax cuts for middle class taxpayers. Compared to permanently extending all of the Bush tax cuts, this proposal is estimated to increase tax revenues by $252 billion over five years and by $678 billion over 10 years, but still leaves federal debt on an unsustainable path.  CRS, Summary Page

• What if we raised taxes only on families with couples making more than $250,000 a year and on individuals making more than $200,000? The top two income tax rates would have to more than double, with the top rate hitting almost 77 percent, to get the deficit down to 3 percent of GDP. Such dramatic tax increases are politically untenable and still wouldn't come close to eliminating the deficit.   TPC

Can the Obama plan that increases revenue by an estimated $50 billion dollars a year really do all he says it can do?   You are left here to vote on that, but there is a little bit more data to focus on first.   For example, consider that back in 2013, income taxes were raised back to the Clinton era rates as the president campaigned for, and yet, here is what the CBO is still projecting when it comes to the deficit alone:

•  The deficit is projected to decrease again in 2015—to $478 billion, or 2.6 percent of GDP.  After that, however, deficits are projected to start rising—both in dollar terms and relative to the size of the economy— because revenues are expected to grow at roughly the same pace as GDP whereas spending is expected to grow more rapidly than GDP.  By the year 2022, CBO projects that the deficit will return to the trillion dollar mark.  CBO, Pages 1-2

It is also worth noting that a return to the Clinton rates for this group is not the only tax increase they have seen under his presidency.   Here  is a look at the other tax increases for that $250K + group that have already been furnished by  the Center for Medicare and Medicaid Services and the Social Security Administration:

• The new health law introduced a new 3.8 percent - unearned income Medicare contribution - on income from interest, dividends, annuities, and other non-earnings sources for individual taxpayers with incomes above $200,000 and couples filing joint returns with incomes above $250,000. Despite the title of this tax, this provision is unrelated to Medicare; in particular, the revenues generated by the tax on unearned income are not allocated to the Medicare trust funds.  CMS, Page 9

Beginning in 2013, an additional Medicare Hospital Insurance (HI) tax of 0.9 percent is assessed on earned income exceeding $200,000 for individuals and $250,000 for married couples filing jointly. SSA

It's time for you to let us know.  Can the solutions be as simple as letting the Bush tax cuts expire on upper earners,  or do the facts get in the way of the story?

*As always, we encourage you to open the resource links and verify data in full context*

 
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It is that simple, a small tax increase on the $250 and up group and we can do all that. Agree or Disagree?
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Voting Key


Fact = 100% - 92% True
Mostly Fact = 91% - 75% True
Slightly Fact = 74% - 60% True
Split = 59% - 50% True
Slightly Fiction = 49% - 30% True
Mostly Fiction = 29% - 10% True
Fiction = 9% - 0% True