The real reason superrich people hate Obama

A lot of ink and pixels were spilled in 2012 wondering why billionaires hated Barack Obama so much when his administration had presided over emergency measures that prevented a banking crisis and laid the groundwork for a robust stock market recovery. Well, now the IRS has released data on how much various people actually paid in taxes in 2013, and we can see the answer.

Very rich people really, really wanted Obama to lose in 2012 because his reelection led to them paying drastically higher effective tax rates. Here’s a chart from Paul Krugman — it shows what share of income people in the top 1 percent and top 0.1 percent actually paid, not just their theoretical rate:

As you can see, the Bush years were very kind to the superrich, and Obama’s first term didn’t hurt them very much because Bush’s tax policies were largely continued. That changed at the end of 2012, when the Bush tax cuts were scheduled to expire and were replaced by new legislation that kept Bush-era rates for most people but raised taxes on families earning more than $450,000 a year. The Affordable Care Act also slightly increased taxes on investment income, which further drove this.

You’ve probably read stories about all the loopholes and deductions and fancy accounting tricks rich people use to minimize their tax bill. All that is true — tax avoidance is a big thing, and if you’re rich you can hire great people to do the work for you. But this chart is an important reality check — when tax rates go up, rich people pay higher taxes.