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Barack Obama Continues to Lie About Taxes – Part 1

I’ve written about this often: It seems that President Obama is taking the “throw it at the wall and see what sticks” approach to his campaign ads. This means that he is making claims, regardless of how false they are, and hoping they get enough viewership without the average American even checking on the validity of these claims themselves. Team Obama hopes that if repeated often enough, the electorate will simply believe these claims, without question, ultimately voting for a president based on lies and misinformation. For additional examples, see this post: http://loudmouthelephant.blogspot.com/2012/06/fill-in-blank-obama-campaign-is-based.html. In fact, I highlighted the “science” behind the President’s campaign strategy here: http://loudmouthelephant.blogspot.com/2012/06/obama-campaign-deceit-machine-rolls-on.html

In Obama’s newest campaign ad, he goes right after Mitt Romney and his tax rate. First,… why??? What in the world does this have to do with anything? Does Obama really think the American people are dumb enough to focus on Romney’s tax rate while ambassadors are getting mauled, 23,000,000 people are unemployed, and the national debt climbs to astronomical levels? I won’t answer that. Moving on and focusing on the facts that debunk Obama’s ad, let’s get some things straight:

- Mitt Romney has done NOTHING illegal. Nothing.

- Mitt Romney has paid every bit of taxes required of him.

- Mitt Romney has paid more in taxes in one year than an average American would pay in 448 years of work.

- Most importantly: Mitt Romney DID pay a higher tax rate than most Americans – I will address this specifically.

Let me see if I understand this: President Obama puts out the ad above and, in short, the ad uses creepy music and words like “probably” to make a claim about a guy who has done nothing wrong, all while lying about the tax rates of all Americans?

Okay, I will answer my own question: Yes, Obama truly does think Americans are that stupid. Allow me to elaborate.

First, with regards to the “Mitt Romney probably paid a lower tax rate than you” claim, did you notice the most important word? Of course, it’s “probably.” Why does Team Obama use that specific word? One simple phrase answers this question: “Plausible deniability.” Why didn’t Obama just say, “Mitt Romney paid a lower tax rate than you?” Answer: Because Obama knows this is absolute baloney. His campaign can twist their claim any way they want… IF and when the American people question it. Team Obama hopes and knows they won’t. Using the word “probably” is like an insurance policy. Just in case a fire storm does hit, the Obama campaign cannot get nailed for being entirely dishonest.

To understand this overall picture, I submit to you: When you’re putting out a claim to the country as a whole (the “probably paid more than ‘YOU’ part”), you’re implying that > 50% of people fall in to the category. You can’t claim “you” if it’s one in 100 people. So yes, when Obama claims, “Mitt Romney probably paid a lower tax rate than you,” he is implying Mitt Romney paid a lower tax rate than most people. Hmmm. I want take a brief step back to some internet propaganda I analyzed earlier this year. Back in March, I investigated the ridiculous claim of Mitt Romney’s versus a teacher’s tax rates.

What does the data show? It clearly says that yes, IRS data confirmed that “millionaires and billionaires” do not pay lower tax rates than the middle class. For those claiming “well, this doesn’t include payroll taxes…” You’re right. It doesn’t. But payroll taxes are a total of 7.65% of the first approximately $110,000 of earned income (BEFORE the payroll tax holiday). This means that for the average income, which is about $40,000, an American tax payer paid an income tax rate of 6.00% and a payroll tax rate of 7.65%. The conclusion: an average taxpayer pays about 13.65% in total federal taxes. Keep in mind this is the average. It’s a safe judgement to assume approximately 50% of Americans make more than and 50% of Americans make less than this average. Well, economics and math aside, if the majority of the country pays a tax rate of 13.65%, how can Mitt Romney pay a lower tax rate than most Americans when he pays around 14%? Keep in mind, these figures account for those Americans that DO pay taxes. When you factor those in that do not, all those Americans paying nothing significantly bring down the American average.

Now that the first Obama tax lie is debunked in theory, let’s talk about it in practice. Of course, as a good conservative economist, I wanted to look at some real IRS data to back my claim.

My analysis follows. First, be sure to look at the specific IRS tax data report I used for this analysis: http://www.irs.gov/pub/irs-soi/12inwinbulratesshare.pdf

Let’s take a look. First, and this is a quick side note… we constantly hear the claim, 47% of Americans pay no taxes. Well, the opening line of the IRS report says the following:

- “Taxpayers filed 140.5 million individual income tax returns for Tax Year 2009. Of those, 81.9 million (or 58.3 percent) were classified as taxable returns. This represents the lowest percentage of taxable returns in more than 24 years. A taxable return is a return that has total income tax greater than $0.”

What?! That means, if we assume the US has about 310,000,000 people, that yes, about 54-55% didn’t even file tax returns (this is given as a range because the number could be different due to joint tax returns), but there is an even more important stat here: Only 81,900,000 of those paid taxes. So out of 310,000,000 people, only 26.4% had income tax to pay? How can this country be sustained when nearly 3 out of ever 4 people doesn’t even pay income tax? Perhaps the argument is, “73% of Americans pay no income tax, if you add payroll taxes (Social Security and Medicare taxes) in, 47% still pay nothing? Hmmm.

Anyway, the glaring charts that stand out in the IRS data are Figures B and B1. Take a look:

(Click on image to zoom in)

What do you notice? Ahhh yes… truth and fact. This shows the average tax rates of the 81.9 million who DID pay taxes. Yes, this means that the people who did not pay taxes have had their figures removed, no longer bringing down the average. So out of all remaining taxpayers, for example, the average American making $30,000 – $50,000 per year paid a final tax rate (again, notice total income tax), of 6.4%. This is a different income range “bucket” from the discussion above, but it does paint the same picture.

 Now lets look at ALL TAX FILERS- including those who actually did file a tax return and didn’t pay any tax (about 41.7% of all tax filers). Check it out:

(Click on image to zoom in)

So… what did we find? Factoring in ALL TAX FILERS, the average American making $30,000 – $50,000 per year (this chart shows ALL income earners), paid a final tax rate of 2.9%. This means that even if you added in the 7.65% payroll tax rate, the average final tax rate of someone earning between $30,000 – $50,000 is 10.55%.  Did you notice anything else? Yes, many people get more in a tax refund than they paid in total income tax. These people essentially receive tax payments from the government.

Why did I highlight the $30,000 – $50,000 income range? Well, though this data is slightly outdated, the average American earns about $40,000 each year (it’s safe to assume this hasn’t changed drastically since): http://en.wikipedia.org/wiki/Personal_income_in_the_United_States. To me, that’s the standard. If you claim, “Mitt Romney probably paid a lower tax rate than you,” I respond with an question of, “what did the average income earner pay?”

In simple conclusion, as the bright-as-the-sun data have shown, since the average American did not pay anything close to the rate that Mitt Romney did, how can this claim by team Obama be anything but a lie? Every American needs to see this before they simply believe another Team Obama lie.

Part – 2, a summation of how President Obama vilifies Mitt Romney (and the wealthy in general) for using “loopholes,” “deductions,” and “write-offs” to reduce his taxable income while doing it more and to a greater extent, can be seen here: http://www.conservativedailynews.com/2012/10/barack-obama-continues-to-lie-about-taxes-part-2/

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Comments (3)

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  1. ElephantCPA says:

    Wow, what a great article!! It is about time somebody puts facts to what President Obama says. It is sad when you ask somebody why they won’t vote for Mitt Romney and they say “he pays a lower tax rate then I do.” It is amazing how people simply take what they hear in ads and do not look for the facts and suppot to develop their own opinion. Who cares how much somebody pays in taxes? Who cares how much money somebody makes? In my opinon, we should be electing somebody, like Mitt Romney, who has worked hard his whole life, to acheive the American Dream. We should not be vilifying him for his success, we should be promoting it to show that it is truly possible.

  2. Anonymous GOP says:

    One of the best articles I’ve read on here. Thank you for posting this. It’s amazing what a little data, truth, and evidence can do.

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    Connecticut 5th District.
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