Apparently, the full interview lasted sixteen minutes, according to Colbert, and had to be edited down to the video embedded above, which is just under seven minutes. I’ve included the link to it in this post because I want to call attention to three specific things he said during the interview I saw, and this way, no one can fairly accuse me of taking his words out of context.
1. “The high-income tax rates are the lowest they’ve been in some 60 years.”
First of all, that’s not true. Second … well, there really is no need for a second point; just look at the facts. Right now, the highest federal individual income tax rate is 35%. 60 years ago, the highest federal income tax rate was 94%. That rate stayed in effect until 1954, when it was dropped to 91%. Since then, the federal tax rate on the highest individual income bracket was changed several times and ultimately dropped to 28% under the Tax Reform Act of 1986 (TRA86). One novel feature of TRA86 was the so-called “bubble rate.” The rate structure included four individual income tax brackets, and the rates were 15%/28%/33%/28%. The Omnibus Budget Reconciliation Act of 1990, which was passed by a Democratic Congress and signed into law by Pres. George Bush, did away with this “bubble rate” and established a new surtax on the highest-income-earners, effectively raising the top tax rate on individual income to 31%. Maybe Austan misspoke, or maybe he just flat-out lied. Either way, there’s no disputing that what he said was false.
Income tax rates remain unchanged. But many taxpayers are seeing their bills drop under Obama because of more generous tax credits for college students, working families, homebuyers and the working poor. Many of the changes were enacted as part of the big economic stimulus package passed in 2009.