Art Laffer and Gretchen Carlson falsely suggested the Obama administration would "dramatically" increase tax rates for all taxpayers, including raising dividend taxes from "15 percent to 39 percent." In fact, under President Obama's proposed budget, tax rates would increase only for couples making over $250,000 and individuals making over $200,000, and dividend taxes for those taxpayers would increase to 20 percent, not 39 percent.
Loading the player ...
Carlson, Laffer suggest Obama will "dramatically" increase all tax rates in 2011
Laffer: "They're going to raise taxes dramatically on January 1, 2011." On the April 13 edition of Fox News' Fox & Friends, former Reagan adviser and co-author of Return to Prosperity Art Laffer suggested that the Obama administration doesn't have "the political will" to successfully recover from the recession and that "right now, we're going in the wrong direction." As evidence, Laffer claimed: "They're going to raise tax rates dramatically on January 1, 2011. You know, that's when the Bush tax cuts expire."
Carlson: "Dividend tax, 15 percent to 39 percent." Co-host Gretchen Carlson also said: "But it's not just for income tax. You're talking about capital gains going from 15 to 20 percent. And here is a harebrained one: Dividend tax, 15 percent to 39 percent?" Laffer agreed, commenting: "Thirty-nine percent, almost 40."
Obama's budget calls for increases only for upper-income families
Obama budget proposal would raise rates only for individuals earning more than $200,000 per year, families earning more than $250,000. Obama's fiscal year 2011 budget proposal, released February 1, included a provision to "[e]xpand the 28-percent rate and reinstate the 36-percent and 39.6-percent rates for those taxpayers with income over $250,000 (married) and $200,000 (single)." In a statement accompanying the budget proposal, Obama said:
In addition to closing loopholes that allow wealthy investment managers to not pay income taxes on their earnings and ending subsidies for big oil, gas, and coal companies, the Budget eliminates the Bush tax cuts for those making more than $250,000 a year and devotes those resources instead to reducing the deficit.
Budget calls for dividend tax increase -- to 20 percent, not 39 -- only for individuals earning more than $200,000 per year, families earning more than $250,000. The budget proposal also includes a provision to "[i]mpose [a] 20-percent tax rate on capital gains and dividends for those taxpayers with income over $250,000 (married) and $200,000 (single)." A January 31 Wall Street Journal article reported: "For families earning at least $250,000, capital gains and dividend tax rates would rise to 20% from 15%."
Budget request includes tax cuts. The budget proposal includes a call to "[e]xtend [the] making work pay tax credit in 2011." The Office of Management and Budget further stated: "The Recovery Act created the Making Work Pay tax credit, a refundable income tax credit, which offsets the Social Security payroll tax on up to the first $6,450 of earnings for about 95 percent of all American workers. ... As part of its plan to restore health to the economy, the Budget proposes to extend the Making Work Pay tax cut for one year."