The wealthiest individuals and families in America spent two decades carving away at tax laws and regulations to reduce the size of their tax burden. Much of that work was undone within a year because of changes championed by President Barack Obama.
Through the use of what The New York Times called the “income defense industry,” the richest people in the U.S. significantly cut their tax rate from the early 1990s to about 2012. They did this by employing lawyers, estate planners, lobbyists and anti-tax activists to develop new tax shelters or adjust tax rules that allowed them to keep more of their earnings.
The reduction was startling. “Two decades ago, when Bill Clinton was elected president, the 400 highest-earning taxpayers in America paid nearly 27 percent of their income in federal taxes,” Noam Scheiber and Patricia Cohen wrote at the Times. “By 2012, when President Obama was re-elected, that figure had fallen to less than 17 percent.”
The year 2012 was when Obama started to counter some of the tax schemes that had been put into place. The American Taxpayer Relief Act of 2012 signed by Obama did extend tax cuts implemented under George W. Bush, but it also allowed certain breaks for people making over $500,000 to expire.
Additionally, Obama’s signature legislative achievement, the Affordable Care Act (pdf), imposed new taxes on the wealthy, “applying to both regular income and income from capital gains, like the profit from appreciated stock,” according to the Times’ Josh Barro. Thanks to…