How Accurate are Obama's Tax Rate Claims?

The Washington Post reports:

“I say that, at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more.”

— President Obama, April 13, 2011

“The president says he wants to eliminate deductions, but he also wants to raise rates. That includes raising the top rate to 44.8 percent.”

— Rep. Paul Ryan (R-Wis.), May 16, 2011

Ryan’s speech to the Economic Club of Chicago on Monday caught our attention with its figure of a top marginal tax rate of almost 45 percent. Generally, the media’s coverage of the president’s 2012 budget has focused on Obama’s desire to return the top tax rate to 39.6 percent, the same as it was before the Bush-era tax cuts.

The top rate is currently 35 percent. So when President Obama said in his speech on fiscal policy last month that the wealthy (those making above $390,050 a year) would “pay a little more,” we thought he meant an extra 4.6 percent. But Ryan is suggesting the increase is much more than that.

Who’s right?

The Facts

The president framed his statement by claiming the tax burden on the wealthy is “at its lowest level in half a century.” It’s certainly among the lowest periods, but not the lowest, according to a 2010 Congressional Budget Office study that examined average tax rates over the past three decades.

The most recent data is from 2007, which shows the average tax rate for the top 1 percent is at 29.5 percent. That’s lower than any period since 1990, when the average rate was 28.8 percent. The lowest rate was 25.5 percent in 1986 for the top 1 percent. So Obama is stretching it to claim this is “the lowest” in a half century.