Read His Lips: Obama Calls for Increasing Payroll Taxes on ‘Households’ Earning Less Than $250,000 Per Year

February 23, 2010 - 1:29 AM
President Obama has called for increasing the Medicare payroll tax for some 'households' earning less than $250,000 per year.
(CNSNews.com) - President Obama presented a new health care plan on Monday that calls for raising the Medicare payroll tax on some households earning less than $250,000, an apparent breach of his campaign pledge not to raise taxes on families earning less than that amount. The president’s plan also calls for increasing taxes on interest, dividends, annuities, royalties and rents.
 
In a Sept. 12, 2008 campaign speech in Dover, N.H, Obama said: “And I can make a firm pledge: Under my plan, no family making less than $250,000 will see their taxes increase—not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your  taxes.”
 
But the new health care plan released in summary form yesterday by the White House specifically calls for increasing the Medicare payroll tax on “households with incomes exceeding $200,000 for singles and $250,000 for married couples filing jointly.”
 
Unless President Obama is prepared to say that the only type of “family” that qualifies as a “family” under his tax pledge is one that is formed around a "married couple filing jointly," then his new health care proposal violates his 2008 tax pledge on its face. The Internal Revenue Service, for example, makes clear that the “head of household” tax filing status is for “unmarried” taxpayers. A definition of the term “head of household” on the IRS Web site says: “Generally, you may claim head of household filing status on your tax return only if you are unmarried and pay more than 50% of the costs of keeping up a home for yourself and your dependent(s) or other qualifying individuals.”
 
The White House posted the president’s tax increase proposal as part of the summary of the new health-care reform bill he is proposing.
 
“Under current law, workers who earn a salary pay a flat tax of 1.45 percent of their wages to support the Medicare Hospital Insurance (HI) trust fund, but those who have substantial unearned income do not, raising issues of fairness,” says the summary of Title IX of the president’s proposal. “The Act will include an additional 0.9 percentage point Hospital Insurance tax for households with incomes exceeding $200,000 for singles and $250,000 for married couples filing jointly. In addition, it would add a 2.9 percent tax for such high-income households to unearned income including interest, dividends, annuities, royalties and rents (excluding income from active participation in S corporations).”
 
Last August, after Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers appeared on Sunday talk shows and seemed to float the possibility that Obama would violate his campaign promise by raising taxes on people earning less than $250,000, White House Spokesman Robert Gibbs repeatedly and emphatically said that they president had made a commitment not to do so. At that time, Gibbs did not speak of the president’s tax pledge as if it applied only to “families,” but said the president had made a commitment not to raise taxes on “those making less than $250,000 a year.”
 
“Let me be precise: The president's clear commitment is not to raise taxes on those making less than $250,000 a year,” Gibbs said at the Aug. 3 White House press briefing.
 
When reporters pressed him on the issue, Gibbs said: “I am reiterating the president's clear commitment in the clearest terms possible, that he’s not raising taxes on those who make less than $250,000 a year.”