You may want to sit down for this, but it appears not everything said at this week’s DNC was entirely true. Bloomberg has the details:
The Claim: Obama said that “independent experts” agree his budget plan “would cut our deficit by $4 trillion.”
The Facts: Obama was incorrect. His budget does purport to cut the deficit by more than $4 trillion. Some of the savings are illusory, such as $700 billion that comes through an accounting gimmick related to war spending — counting as budget cuts the money that won’t be used for wars that are ending.
The deficit-reduction figure also includes more than $1 trillion in cuts in so-called discretionary spending that were already agreed to as part of a deal last year to raise the government’s debt limit. The administration’s budget “falls well short” of $4 trillion in savings, according to February analysis by the nonpartisan Committee for a Responsible Federal Budget.
It’s more important to look at where a budget leaves the federal debt over the long term. Republican vice presidential nominee Paul Ryan’s plan would leave the government with a $15.3 trillion debt in 2022, which would be about 62 percent of the nation’s economy. Obama’s plan would results in an $18.8 trillion debt in 2022, or about 76 percent of the gross domestic product.
Clinton’s Tax Rates
The Claim: Obama said he wants “the wealthiest households to pay higher taxes on incomes over $250,000 – the same rate we had when Bill Clinton was president.”
The Facts: Obama is telling only part of the story about the taxes he wants top earners to pay. Yes, he is proposing that the top marginal rate on ordinary income return to 39.6 percent, which is what it was under Clinton. At the same time, he has proposed or already enacted provisions that would make these households pay more than they did under Clinton.
The 2010 health care law included a 0.9 percent tax on the wages of top earners and a 3.8 percent tax on their unearned income, such as capital gains and dividends. Those levies, which will take effect in 2013, would raise taxes by $318 billion over the next decade, according to the Congressional Budget Office.
Furthermore, Obama has proposed capping the tax breaks received by top earners at 28 percent. That would limit their ability to deduct charitable contributions, mortgage interest and state and local taxes. They also would pay taxes on their municipal bond income and employer-sponsored health insurance, which are both now not taxed. Those proposals, in Obama’s most recent budget, would raise $584.2 billion over the next 10 years, according to the Office of Management and Budget.
The Claim: Biden said that Republican presidential candidate Mitt Romney has proposed “a new tax — it’s called a territorial tax — which the experts have looked at and they acknowledge it will create 800,000 new jobs — all of them overseas. All of them.”
The Facts: Biden overstated the case. His 800,000 jobs number is based on a study conducted by one expert, Kimberly Clausing, an economics professor at Reed College in Portland, Oregon. Her July analysis examined the effects of a “pure” territorial system under which U.S. companies would face no domestic taxes on their foreign income.
Romney hasn’t provided details on what his territorial tax system would look like. The clearest Republican proposal on the issue has come from Representative Dave Camp of Michigan, the chairman of the House Ways and Means Committee. It would exempt 95 percent of foreign income and includes provisions opposed by companies that prevent them from shifting profits outside the U.S. That’s not the pure proposal that Clausing analyzed.