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A Project of The Annenberg Public Policy Center

Obama No ‘Different’ Today on Taxes

An American Crossroads TV ad claims Obama’s position on taxes is “different” than it was in 2009. It isn’t.

The conservative group began airing a new TV ad in St. Louis on Oct. 3 in advance of the president’s fundraising trip to Missouri. The ad, titled “Don’t,” urges Obama not to raise taxes. But it distorts the president’s position on taxes two years ago by taking a snippet of an Obama interview in August 2009 and using it out of context.

Announcer: He raised our hopes. He seemed to understand.

Obama: The last thing you want to do is raise taxes in the middle of a recession.

Announcer: But today he’s different.

Brianna Keilar, CNN: The president proposes tax increases —

Scott Pelley, CBS: One and a half trillion dollars —

Does the $1.5 trillion tax hike plan contradict what Obama said in 2009 about raising taxes “in the middle of a recession”? Is it true that “today he’s different”? No and no.

The $1.5 trillion tax hike proposal — which is spread over 10 years, a point not mentioned in the ad — is included in the deficit reduction plan he submitted Sept. 19 to the Joint Select Committee on Deficit Reduction. The special committee was formed this summer as part of the bipartisan agreement to raise the nation’s debt limit.

The two biggest revenue-raisers in the president’s deficit reduction plan were also included in the president’s fiscal year 2010 budget proposal (table S-6), which was introduced in February 2009. Specifically, the president proposed to allow the Bush tax cuts to expire for individuals earning more than $200,000 and couples earning more than $250,000, and to limit personal exemptions and itemized deductions to 28 percent for those same taxpayers. Combined, those two tax changes account for nearly $1.3 trillion of the $1.5 trillion in new tax revenue in Obama’s deficit reduction plan. His latest plan includes other familiar revenue-raising proposals rejected by Congress, including eliminating tax preferences for the oil and gas industry ($41 billion). That, too, was part of Obama’s proposed 2010 budget.

American Crossroads creates an illusion that the president has changed his position on taxes by using a video clip of Obama saying, “The last thing you want to do is raise taxes in the middle of a recession.” Obama said that in an Aug. 5, 2009, interview with MSNBC’s Chuck Todd.

But the ad uses only a partial quote from the president. In fact, Obama was defending himself from criticism that he wanted to raise taxes during a recession. He told Todd that his tax proposals would not take effect “until after the recession was over.”

Obama, Aug. 5, 2009: We have not proposed a tax hike for the wealthy that would take effect in the middle of a recession. Even the proposals that have come out of Congress, which by the way were different from the proposals I’ve put forward, still wouldn’t kick in until after the recession was over. So, he’s absolutely right, the last thing you want to do is to raise taxes in the middle of a recession.

The 2009 tax proposals were scheduled to take effect in January 2011, but were shelved after the Republicans’ big gains in the 2010 elections. Instead, Obama and the Republicans agreed to extend the Bush tax cuts for all taxpayers for two more years. The rehashed tax proposals in Obama’s deficit reduction plan would take effect in January 2013.

Although Obama referenced “this extraordinary recession we’re going through” in an Oct. 3 interview with ABC’s George Stephanopoulos, the U.S. is no longer in a recession by the standard measure. So Obama was correct when he said in 2009 that his plan would not raise taxes “in the middle of a recession.” The National Bureau of Economic Research announced in September 2010 that the recession had ended in June 2009, although there are lingering concerns about the possibility of a double-dip recession.

We take no position on whether Obama’s plan is good or bad for the economy, and we cannot predict whether there will be a double-dip recession. But we can say that his position on taxes is no “different” today than it was in 2009.

— Eugene Kiely