The Weekly Standard
A new study by Douglas Holtz-Eakin of the American Action Forum finds that President Barack Obama’s spending plan would raise taxes on the middle class. “[T]axpayers making as little as $30,000 will carry $1,500 more in taxes annually over the next 10 years,” the study finds.
The significance of this study is that it contradict Obama’s pledge not to raise taxes on the middle class. “If you are a family making less than $250,000 a year, you will not see your taxes go up,” Obama said in 2008.
But if the American Action Forum study is correct, and if Obama is reelected, he will either break his pledge not to raise taxes on the middle class or his commitment to balance the budget.
The study hinges on Obama’s commitment to balance the budget by 2022. “[The] paper outlines the tax implications of the Administration’s current spending plans. I compute the tax increases necessary to achieve primary budget balance by at least 2022 under a variety of assumptions on the mix of fiscal adjustment and breadth of tax increases across taxpayers,” Holtz-Eakin writes in the study’s executive summary.
There are not enough millionaires to make up the gap, Holtz-Eakin finds. “The paper finds that, in order to achieve primary budget balance by at least 2022, taxing only millionaires would require raising their taxes to 123.9 percent. Taxing only those individuals making over $500,000 would require an increase from 30.6 percent to 95.5 percent.”