President Barack Obama campaigned in 2008 on a promise to raise taxes on the wealthy, saying families making more than $250,000 a year (and individuals making more than $200,000) should pay what they paid under President Bill Clinton: a top rate of 39.6 percent. Tax cuts passed under President George W. Bush cut that rate to 35 percent.
Battling with Republicans in Congress in 2010, Obama relented and agreed to a two-year extension of everyone's rates. But even then, he vowed that he wouldn't let the low rates stand for the wealthiest Americans indefinitely.
In late 2012, with the fiscal cliff crisis pressuring both sides to act, Obama came out of the ordeal with a compromise. A law passed just before 11 p.m. on Jan. 1, 2013, permanently raised rates on families making more than $450,000 and $400,000 for individuals. It's a higher income threshold than Obama sought, but it accomplishes his philosophical goal of asking the wealthy to pay more. We rate this a Compromise.
Our Sources
Text of H.R. 8 (fiscal cliff bill), Jan. 1, 2013
House Republican Conference, summary of H.R. 8, Jan. 1, 2013
Washington Post, "Wonkbook: Everything you need to know about the fiscal cliff deal," Jan. 1, 2013