"We cut taxes for 95 percent of working families."
Barack Obama on Wednesday, January 27th, 2010 in a State of the Union speech
Tax cut for 95 percent? The stimulus made it so
President Barack Obama talked a lot about economic recovery during his State of the Union address on Jan. 27, 2010, including the benefits of the economic stimulus bill passed last year.
The stimulus, formally known as the American Recovery and Reinvestment Act, included tax cuts for many Americans, Obama said.
"We cut taxes. We cut taxes for 95 percent of working families. We cut taxes for small businesses," Obama said. "We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college."
Democrats applauded, while Republicans were silent for the most part. In one of the unscripted moments of the night, Obama looked at the Republican side of the room, smiled and said, "I thought I'd get some applause on that one."
Here, we wanted to check Obama's statement that he cut taxes for 95 percent of working families.
The key word in his statement is "working." Obama's claim is based on a tax cut intended to offset payroll taxes. Under the stimulus bill, single workers got $400, and working couples got $800. The Internal Revenue Service issued new guidelines to reduce withholdings for income tax, so many workers saw a small increase in their checks in April 2009.
The tax cut was part of Obama's campaign promises. During the campaign, Obama said he wanted $500 for each worker and $1,000 for working couples. Since the final number was a bit less than he promised, we rated his promise a Compromise on our Obameter, where we rate Obama's campaign promises for fulfillment.
During the campaign, the independent Tax Policy Center researched how Obama's tax proposals would affect workers. It concluded 94.3 percent of workers would receive a tax cut under Obama's plan based on the tax credit to offset payroll taxes. According to the analysis, the people who wouldn't get a tax cut are those who make more than $250,000 for couples or $200,000 for a single person. Obama said he intended to raise taxes on those high earners, a promise he reiterated during the State of the Union, and that revenue would offset the stimulus tax cut.
Because the stimulus act did give that broad-based tax cut to workers, we rate Obama's statement True.
Published: Thursday, January 28th, 2010 at 12:02 a.m.
The Tax Policy Center, Impact of Sen. Obama's tax proposals, Oct. 14, 2008
Thomas, The American Recovery and Reinvestment Act of 2009 , accessed Feb. 17, 2009
PolitiFact.com, Tax cuts for 95 percent? A closer look , Oct. 20, 2008
We want to hear your suggestions and comments.
For tips or comments on our Obameter and our GOP-Pledge-O-Meter promise databases, please e-mail the Obameter. If you are commenting on a specific promise, please include the wording of the promise.For comments about our Truth-O-Meter or Flip-O-Meter items, please e-mail the Truth-O-Meter. We’re especially interested in seeing any chain e-mails you receive that you would like us to check out. If you send us a comment, we'll assume you don't mind us publishing it unless you tell us otherwise.
Keep up to date with Politifact :
- Sign up for our e-mail (about once a week)
- Put a free PolitiFact widget on your blog or Web page
- Subscribe to our RSS feeds on Truth-O-Meter items
- Subscribe to our RSS feeds on GOP Pledge-O-Meter items
- Subscribe to our RSS feeds on Obameter items
- Advertise on PolitiFact
- Shop the PolitiFact store for T-shirts, hats and other PolitiFact swag