Top 5 Obama SOTU Canards You'll Hear Tonight
- Income Inequality – While you’re likely to hear the President speak on “income inequality” tonight and how "big business" prospers at the expense of ordinary Americans and the solution is more government regulation, the truth is the President has been one of big businesses most ardent supporters if and when some of them agreed to support his agenda. A prime example is the two bailout provisions for big insurance contained in Obamacare. Additionally, the New York Times recently found that growth in the income inequality rate has increased from .28 percent under President Bush to 1.14 percent under President Obama.
- “Corporate Tax Reform” aka Business Tax Hikes - President Obama will propose a net tax increase on American employers under the guise of “corporate tax reform.” If “corporate tax reform” language sounds familiar – that’s because it is. The President’s proposal is merely a repackaging of a 2012 re-election campaign plan to raise taxes on all employers while cutting rates for just a few of the largest companies. As found by ATR’s Tax Policy Director Ryan Ellis, fewer than two million out of the 32 million businesses that file tax returns in a given year are corporations, which tend to be the largest companies in the world. Although these corporate rates are too high, the overwhelming percentage of employers don’t pay the corporate income tax rate. The President has already raised the tax rate paid by small and medium-sized businesses via the fiscal cliff and Obamacare’s Medicare payroll tax rate hike. “Taken together, this means that most employers face a top rate of close to 44 percent, plus state taxes. This is even higher than the 39 percent corporate income tax rate faced by large corporate firms.” Thus the President’s proposed tax hike will cut rates for some multinational corporations, while raising taxes on Main Street businesses.
- The Actual Number of People Obamacare Expanded Coverage to – Okay, this isn’t something we’re actually likely to hear about. While it’s likely the President will cite to “6 million” people who have signed up for Obamacare, that figure is just not true. Surveys from insurers and other industry players indicate that “as few as 11 percent of those on Obamacare’s exchanges were previously uninsured.” Analysts at the Wall Street Journal found that roughly 65-89 percent of exchange enrollees were previously insured. If you assume around one third of exchange enrollees were previously uninsured, and 90 percent of those who have “selected a marketplace plan” will enroll in coverage, the Obamacare exchanges have thus only expanded coverage to 660,000 people.
- The Real Winners under Obama: Big Insurance and Multinational Corporations – The President will repeatedly make reference to “strengthening the middle class” and growing "small business" in tonight’s address, however the middle class and small businesses are not the real winners here. In addition to the tax cuts for multinational corporations discussed above, Obamacare also includes two bailout provisions for big insurance companies. The first provision bails out insurance companies for costs associated with individual patients when they exceed $45,000. According to National Review, Insurers will be able to push off 80 percent of costs between $45,000 and $250,000 onto a fund financed by a fee of $63 per head on insurance customers. The second provision ask the insurance companies to project their total costs and then picks up most of the difference if losses exceed those targets.
- Oil and Natural Gas Production – The President will likely tout oil and natural gas production in the U.S. under his administration, however nothing the federal government has done under Obama has helped to increase domestic oil and natural gas production. The total federal natural gas production is down 21% on federal lands since President Obama took office due to burdensome regulations and lengthy permitting times. The Obama administration’s proposed hydraulic fracturing regulations would make it worse. Meanwhile, energy development on state and private lands, not under federal regulations, has flourished. Currently, 93% of shale wells are located on state and private lands. Additionally, the president remains silent on the Keystone XL pipeline, a shovel-ready project that could propel the creation of thousands of American jobs and economic growth. The president has delayed action on this job project for years, bucking bipartisan support for the project among Congress and the American people. It has now been over 5 years since the pipeline application was submitted.