Friday, October 24th, 2014

Tracking President Obama's tax promises

Have you filed your taxes yet? They're due by midnight.
Have you filed your taxes yet? They're due by midnight.

President Barack Obama signed major tax legislation on Friday, and we're still examining its impact on his campaign promises.

The deal between Obama and Senate Republicans was something of a trade-off. Obama agreed to continue the current tax rates for high earners: couples who make more than $250,000 and individuals who make more than $200,000. Current tax rates were also continued for people who make less than that. The tax rates, passed during President George W. Bush's administration, had an end-of-the-year expiration date and were set to go up in 2011 unless they were extended.

Obama campaigned repeatedly on letting tax rates go up for high earners. But in giving in on those positions, he got other things in return. Obama won another year of unemployment benefits for workers who qualified. Some tax cuts that were part of the 2009 economic stimulus law were continued. And he won a one-year reduction of Social Security taxes that put 2 percent of pay back into workers' paychecks.

Obama said he still opposed the tax cuts for the wealthy, even though he agreed to the extension.

"I'm as opposed to the high-end tax cuts today as I've been for years," Obama said in a press conference on Dec. 7, 2010. "In the long run, we simply can't afford them. And when they expire in two years, I will fight to end them, just as I suspect the Republican Party may fight to end the middle-class tax cuts that I've championed and that they've opposed."

The tax package means new ratings for many of Obama's promises about taxes. Here's a summary of our recent rulings:

• No. 39: Phase out exemptions and deductions for higher earners. Obama said during the campaign that he wanted to reduce exemptions and deductions for high earners, which would have the effect of making their tax bills higher. But the tax compromise continued the current levels on exemptions and deductions. We rated this one Promise Broken.

• No. 4: Extend child tax credits and marriage-penalty fixes. Without the tax deal, child tax credits would have been reduced and married people would have paid higher taxes. The new law is in keeping with his promise, so we rated it Promise Kept.

• No. 10: Expand the child and dependent care credit. Obama said during the campaign he would increase the child and dependent care credit. It's not in the new tax legislation that covers the next two years. We rated this one Promise Broken.

• No. 1: Increase the capital gains and dividends taxes for higher-income taxpayers. Taxes on capital gains and dividends stay the same under the tax deal. We rated this one Promise Broken.

• No. 41: Freeze the 2009 estate tax law. Obama campaigned on raising taxes on estates, but the Republicans were able to negotiate somewhat lower rates. So we rated this promise Compromise.

• No. 38: Repeal the Bush tax cuts for higher incomes. Obama campaigned on letting tax rates increase for couples who make more than $250,000 and individuals who make more than $200,000. The tax compromise violated those pledges. So we rated this one Promise Broken.

• No. 37: Extend the Bush tax cuts for lower incomes. Obama and Senate Republicans agreed on a tax package that included extending the current tax rates for all incomes. The extension expires in 2012. We rated this one Promise Kept.