Despite slashing the national debt by an additional $1.8 trillion over the next decade, President Obama's proposed fiscal year 2014 budget was received with two predictable talking points by Republican leaders. House Majority Eric Cantor, who previously complained about being called a "hostage taker," protested that "we ought to do so without holding [entitlement cuts] hostage for more tax hikes." His fellow debt-ceiling hostage-taker John Boehner echoed that sound bite, proclaiming "I would hope that he would not hold hostage these modest reforms for his demand for bigger tax hikes." But Boehner didn't end there:
"The president got his tax hikes in January; we don't need to be raising taxes on the American people."Speaker Boehner couldn't be more wrong. As it turns out, Uncle Sam has a well-documented need for more tax revenue in the years ahead. And as we'll see below, a big reason why is that between them, Presidents Bush and Obama cut taxes by more than the five times the amount of the combined new revenue hikes Obama got in January and is asking for now.
The chart above tells the tale. Leaving aside the new funding contained in the Affordable Care Act, President Obama is seeking $1.2 trillion in new tax revenue over the next decade. With the fiscal cliff deal in January, Obama got about $620 billion, or about half that amount. Individuals making over $400,000 a year (and households earning over $450,000) will see their income tax rate return to its Clinton-era level of 39.6 percent. The capital gains rate similarly will be reset at 20 (from 15) percent. In his FY 2014 budget proposal, the President has asked for another $580 billion by 2023, primarily by capping deductions for the wealthy at 28 percent, instituting the so-called "Buffett Rule," and ending tax breaks for the booming energy sector.
But Obama's $1.2 trillion in current and requested tax increases pales in comparison to the roughly $6.4 trillion he and George W. Bush will have drained from the U.S. Treasury between 2001 and 2023.
As the New York Times documented two years ago, the Bush tax cuts of 2001 and 2003 cost about $1.8 trillion during Dubya's tenure. (It should be noted that while the Bush tax cuts most certainly did not "pay for themselves," they did deliver a massive windfall to the wealthiest five percent of Americans.)
But as the Center for American Progress detailed, Barack Obama proved to be a much bigger tax-cutter than George W. Bush. The Obama stimulus of 2009 included $425 billion in new tax relief by extending the Bush cuts for two years and offering new credits and deductions to help jump start the economy. With his December 2010 tax compromise with Congressional Republicans, President Obama extended the Bush tax cuts for another two years while instituting a one-year payroll tax holiday. After that $654 billion package, Obama and Congress agreed to a second year of the temporary payroll tax cut at a cost of roughly $100 billion to the Treasury. And in January, the fiscal cliff deal made the Bush tax cuts permanent for 99 percent of American workers, at a ten year price of $3.4 trillion ($3.9 trillion, if the additional interest on the national debt is included).
It should be noted that these are ballpark figures. For starters, they are measured in "current" dollars and so do not take inflation into account. For simplicity sake, the new taxes enacted by Obamacare are not included, as these are mostly offset by the cost of the program. Most importantly, the cost of extra interest payments on the additional debt produced by the tax cuts is not included, with the result that their real price tags over time are understated.
Regardless, the basic message is unchanged. President Obama's revenue request for the next decade isn't just lower than the target set by the Simpson-Bowles Commission. Obama's current and proposed tax hikes are just fraction of the cut he and President Bush already put in place. To put it another way, what President Obama taketh doesn't even come close to what he giveth away.