Obama Delivers on Tax Cut Promises as Increases for Rich Blocked

April 17 (Bloomberg) -- President Barack Obama
campaigned in 2008 on tax cuts for most Americans
and tax increases for the fortunate few. He has
delivered on the breaks and, for the most part, been
unable to follow through on attempts to raise taxes. Obama turned his call for middle-income tax breaks
into law within a month of taking office, incorporating

a $400-a-person tax credit for workers into the 2009
stimulus law. In late 2010, with the economy still
weak and Republicans gaining political clout, Obama
agreed to an $858 billion tax cut that extended all of the George W. Bush-era tax cuts for two years. "The tax policy has been substantially in the
conservative direction whereas the rhetoric has gone
in the exact opposite direction," said Don Susswein, a
tax aide to former Republican Senator Bob Dole who
said he supported Obama in 2008. Today, as Americans reach the fourth annual tax-filing
deadline since Obama became president, they are
encountering a tax system that relies on the
architecture he inherited from Bush. On top of that
regime, Obama has added a series of targeted tax
breaks for small businesses, college students and low-income families, along with some tax increases
for top earners to finance the expansion of health
insurance coverage. 'Not Hugely Different' "The tax system is not hugely different from what it
was in 2008," said Leonard Burman, a professor at
Syracuse University in New York who worked in the
Treasury Department under President Bill Clinton.

"The
tax system is still too complicated, still unfair and still
doesn't raise enough money to pay for the government." The recession and Obama's tax cuts pushed federal
revenue as a share of the economy to a 60-year low.
Income tax rates haven't changed. The estate tax
affects fewer people and at a lower rate than when
Obama took office. Workers' payroll taxes were
reduced during 2011 and 2012. Many of the major tax provisions of the 2010 health
law haven't taken effect. Tax credits to help people
purchase health insurance begin in 2014 and tax
increases on the wages and investment income of the
highest earners start in 2013. "The president has been very successful in following
through on the promises that he made in the
campaign," said Jason Furman, who advised Obama
during the campaign and is now deputy director of the
National Economic Council. "The core promise was that
he wasn't going to raise taxes on middle-class families." Top Earners During the campaign, Obama made a distinction
between the majority of taxpayers and top earners --
who he defined as individuals making more than
$200,000 a year and married couples making more
than $250,000. "I can make a firm pledge: Under my plan, no family
making less than $250,000 a year will see any form of
tax increase -- not your income tax, not your payroll
tax, not your capital gains taxes, not any of your
taxes," he said in a Sept. 12, 2008, speech in Dover,
New Hampshire. Still, Obama has signed bills -- particularly the health
care law -- that raised taxes paid by some people who
earn less than $250,000 a year. The 2010 health law included a new 10 percent excise
tax on indoor tanning, a higher threshold for
taxpayers to itemize the medical expense deduction
and limits on using tax-advantaged accounts for over-
the-counter drugs. The law eventually will require
taxes for high-cost health insurance plans and impose a penalty on people who don't purchase insurance. 'Didn't Keep His Word' "He didn't keep his word on that," said Grover
Norquist, the anti-tax activist, who maintains a list of
Obama-backed tax increases for middle-income
households on the website of his group, Americans
for Tax Reform. "I'm sure he told the truth somewhere
and we missed it." Austan Goolsbee, who advised Obama during the
campaign and in the White House, cautioned against
singling out a portion of the health care law.