President Obama's Weekly Address (4/10/10)

President lists tax benefits for middle class

This week, the President discussed a host of tax benefits and savings aimed at boosting the middle class. From health care to education; from cars to home ownership, President Obama listed a series of initiatives that have been aimed at working Americans so far under this Congress and his tenure in office. President Obama noted,

"So far, Americans who have filed their taxes have discovered that the average refund is up nearly 10% this year - to an all-time high of about $3,000. This is due in large part to the Recovery Act. In fact, one-third of the Recovery Act was made up of tax cuts - tax cuts that have already provided more than $160 billion in relief for families and businesses, and nearly $100 billion of that goes directly into the pockets of working Americans."

The fact-check organization, Politifact.org, analyzed President Obama's claim of cutting taxes for 95% of working families shortly after this year's State of the Union Address. Politifact ranked the President's statement as "True."

via Politifact.org:

The key word in his statement is "working." Obama's claim is based on a tax cut intended to offset payroll taxes. Under the stimulus bill, single workers got $400, and working couples got $800. The Internal Revenue Service issued new guidelines to reduce withholdings for income tax, so many workers saw a small increase in their checks in April 2009.

The tax cut was part of Obama's campaign promises. During the campaign, Obama said he wanted $500 for each worker and $1,000 for working couples. Since the final number was a bit less than he promised, we rated his promise a Compromise on our Obameter, where we rate Obama's campaign promises for fulfillment.

You can read the rest of Politifact's analysis here.

Politifact also looked at several other subjects listed by President Obama relating to tax cuts and savings.

You can read Politifact's discussion of the American Opportunity Tax credit here. It was ranked as a compromise because the potential for a credit was capped at $2,500, which is not as high as the $4,000 the President had originally hoped for. However, it was still an increase from the $1,800 credit that was established under existing law at the time.

Even more, Politifact ranked as "True" a statement by David Axelrod claiming that 25 tax cuts were passed without Republican support during 2009. The list is broken down into the categories of "Individual," "Business," and "Other Business" tax cuts. You can read their analysis here.

The President went on to claim a host of other tax benefits and savings. Among them:

• Up to an $8,000 tax credit for first-time home buyers.
• The ability to deduct the state and local sales taxes for those who purchased a new car last year.
• Energy-efficient home improvements are eligible for up to $1,500 in new tax credits.
• An increase in the Earned Income Tax Credit.
• More families can qualify for the Child Tax Credit.
• A 65% tax credit to help cover the cost of health care.
• The first $2,400 in unemployment benefits is tax-free.

The President went on to tout the new Health Care Legislation as providing the "largest middle class tax cut for health care in history."

The President also said that he has kept his promise not to raise taxes on families making less than $250,000 a year. Politifact actually ranks this last issue as a "Promise Broken," however that is due, in large part to things such as the cigarette tax for SCHIP and taxes on tanning salons listed in the recent health care legislation, but not necessarily income tax. Politifact stated that it might have considered the individual mandate (the teeth of which has been argued as being weak to non-existent by people such as Lawrence O'Donnell) a "Compromise" but instead decided to lump it in with the cigarette and tanning taxes. You can read their analysis here.

Still, the President feels that we are moving in the right direction. He closed his Address by noting,

"It's been a tough couple years for America. But the economy's growing again. Companies are beginning to hire again. We are rewarding work and helping more of our people reach for the American Dream again."

Take a look at the President's entire Weekly Address: