In the end, nothing hurt George HW Bush's chances for re-election than the rallying cry he made during his acceptance speech at is first nomination convention.
And I'm the one who will not raise taxes. My opponent now says he'll raise them as a last resort, or a third resort. But when a politician talks like that, you know that's one resort he'll be checking into. My opponent, my opponent won't rule out raising taxes. But I will. And the Congress will push me to raise taxes and I'll say no. And they'll push, and I'll say no, and they'll push again, and I'll say, to them, ‘Read my lips: no new taxes.’When he eventually raised taxes, that rallying cry for his first term became the death knell for his second.
During his campaign for president, Barack Obama said over and over that he will not raise taxes for families making less than $250,000 a year.
'Under my plan," candidate Barack Obama said on Sept. 12, 2008, while campaigning in Dover, N.H., "no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."While he never told us to read his lips, he said it with the same power and veracity as Bush did with his no taxes pledge.
With the budget he sent to Congress yesterday President Obama breaks that pledge not just once, but many times. He does not break it by increasing the actual tax rates, but by eliminating tax breaks for those middle class families. In effect he is increasing taxes in a sneaky way.
Investors will pay more on their earnings next year, with the tax on dividends jumping to 39.6 percent from 15 percent and the capital-gains tax increasing to 20 percent from 15 percent. The estate tax is eliminated this year, but it will return in 2011 -- though there has been talk about reinstating the death tax sooner. All these taxes will hit the middle class.
Millions of middle-class households already may be facing higher taxes in 2010 because Congress has failed to extend tax breaks that expired on January 1, most notably a "patch" that limited the impact of the alternative minimum tax. The AMT, initially designed to prevent the very rich from avoiding income taxes, was never indexed for inflation. Now the tax is affecting millions of middle-income households, but lawmakers have been reluctant to repeal it because it has become a key source of revenue.
Without annual legislation to renew the patch this year, the AMT could affect an estimated 25 million taxpayers with incomes as low as $33,750 (or $45,000 for joint filers). Even if the patch is extended to last year's levels, the tax will hit American families that can hardly be considered wealthy -- the AMT exemption for 2009 was $46,700 for singles and $70,950 for married couples filing jointly.
Middle-class families also will find fewer tax breaks available to them in 2010 if other popular tax provisions are allowed to expire. Among them:
- Taxpayers who itemize will lose the option to deduct state sales-tax payments instead of state and local income taxes;
- The $250 teacher tax credit for classroom supplies;
- The tax deduction for up to $4,000 of college tuition and expenses;
- Individuals who don't itemize will no longer be able to increase their standard deduction by up to $1,000 for property taxes paid;
- The first $2,400 of unemployment benefits are taxable, in 2009 that amount was tax-free.
- The $3.8 trillion budget request rolled out by the White House on Monday would renew the Making Work Pay tax credit for fiscal 2011, but then would have it sunset. That’s a switch from last year, when Obama’s budget called for making the tax credit permanent. The cut costs the federal government about $63 billion in annual revenue while putting up to $400 in the pockets of workers making less than $95,000. It was approved for the first time in last year’s $787 billion stimulus package.
On top of all that President Obama’s budget director has evaded the question whether when the president's new "cut the deficit commission" meets, the administration will recommend that taxes not be raised on Americans earning less than $250,000 annually.
Such an increase would violate the president’s campaign pledge to hike taxes only on higher income earners.
“We’ve been clear on our position on taxes, but we have to let the commission – it hasn’t even been formed yet – let’s let it do its work,” said Peter Orszag, director of the Office of Management and Budget (OMB).Obama did the same thing with Eric Holder. Say that it is someone else's decision and then you can blame that someone else.
President Obama last week signed an executive order to assemble a bipartisan commission that would review ways to reduce the federal deficit.