No, this is a ridiculously false assertion on the part of both Obama and NYT opinion page (unless you count reduction of deficit of ~3% or at most ~4% in the extreme case as a "significant deficit reduction", in which it would indeed be a true assertion).
The extra taxes imposed on the "super-rich" - meaning $1M income or more - using highest tax bracket under 1995 tax levels - would cover a whopping 2.84% (or $31.87B) of 2012 yearly Federal deficit (based on latest known reported IRS 2010 incomes).
If you also include those less-fat fatcats making between $500K-$1M/year into that - which gets you close to 1% of income earners (~400k+) so it's a valid inclusion given the usual discourse on incomes - you don't win all that much extra - total of 3.25% (or $36.39B) of 2012 yearly Federal deficit.
2012 Budget Deficit - $1.121 trillion (OMB).
2010 Total taxable income (Src: IRS, "Table 1.4 All Returns: Sources of Income, Adjustments, and Tax Items, by Size of Adjusted Gross Income, Tax Year 2010"), section "Taxable Income":
- $500,000 under $1,000,000: $309B (cell FO24)
- Over $1m - ~$801B (Cells FO25-FO29)
- Total $500,000+ = $1110B
- They came from 542,635+279,600 = 822,235 returns (cells FN24-FN29).
- Long-term capital gain/losses were ion cell AW44-45 and AY44-45. See second spreadsheet below.
IRS doesn't have later years' data yet, so we will use 2010.
Tax Brackets, adjusted for inflation, were (src):
- 1995 - highest tax bracket was 39.6% for ($388,350+ for all)
- 2012 - highest Tax bracket was 35% ($388,350+ for all)
- 1995 - Long term Capital Gains tax topped out at 28%
- 2012 - Long term Capital Gains tax topped out at 15%
Let's do the calculations:
- First, we calculate the income made by those "super-rich" (million+ income) which is NOT under the highest tax bracket changed (before $388,350): 279,600*$388,350 = $108.52B
- Then, we calculate how much income fell into highest tax bracket: $801B - $108.52 = $692.48B
- Then we subtract the long term capital gains income that would have been extra-taxed under more-drastic-changing capgains tax: $692.22B- $0.1987B = $692.22B (spreadsheet subtracts in opposite order).
- The extra take on 4.6% margin is $692.22B * (39.6%-35%) = $692.22B * 4.6% = $31.84B
- The extra take on CapGains 13% margin is $0.2B * 13% = $0.026B
- Total extra take = $31.84B + $0.026B = $31.87B
So, the marginal extra winning from the "tax the rich" racket could be, at most, $31.87B.
How much of the 2012 deficit would that cover? $31.87B/$1121B = 2.84%
Thus, the extra taxes imposed on the highest tax bracket on 1990s (1995) level using 2010 incomes would cover a whopping 2.84% (or $31.87B) of 2012 yearly Federal deficit.
So, let's say we become even more liberal, and declare those making over $500k as "super rich". Can't we shear some extra wool off of them?
Not too much more. Same calculations:
NOTE: This answer makes 5 assumptions:
imposing higher tax brackets will NOT negatively impact the taxable income in the future, which is generally considered to be a false assumption, although the degree of impact may vary and is outside the scope of this answer. If you reject that assumption, your numbers will be even smaller.
That 2012+ incomes are the same as 2010 incomes. This is probably false, but IRS data lags by 2 years so it's hard to estimate correctly. If you reject this assumption, the numbers will probably be larger for 2012 incomes. But not large enough compared to 2012 to effectively move the needle off of "~3% deficit" mark to ~4% - for that, the incomes would need to rise ~30% in 2 years.
That the math for married-filing-separately is identical to married-filing-jointly. If a LOT of fatcats file separately, we should really include the additional taxes on income between $194,170 and $388,350 for them. But those extra taxes would amount to - at most - extra $2.5B, not really moving the needle more than 0.3% of deficit, in the extreme case that every single one of them is married AND every single one of them files separately.
Since the OP explicitly asked "How much of the deficit would be reduced by increasing taxes on the top 1% to 1990s levels", this answer does NOT include effects from restructuring taxable base (e.g. eliminating specific deductions).
Here's the extra spreadsheet to calculate extra take from long-term corporate gains taxes (used in calculations above).