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More truth about the Nobama tax rape you tax plan....
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Wall Street Journal.......OCTOBER 13, 2008
Obama's 95% Illusion
It depends on what the meaning of 'tax cut' is....
One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today.
For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase "tax credit." Mr. Obama is proposing to create or expand no fewer than seven such credits for individuals:
![[Review & Outlook]](http://s.wsj.net/public/resources/images/ED-AI343_1taxcr_NS_20081008232813.gif)
- A $500 tax credit ($1,000 a couple) to "make work pay" that phases out at income of $75,000 for individuals and $150,000 per couple.
- A $4,000 tax credit for college tuition.
- A 10% mortgage interest tax credit (on top of the existing mortgage interest deduction and other housing subsidies).
- A "savings" tax credit of 50% up to $1,000.
- An expansion of the earned-income tax credit that would allow single workers to receive as much as $555 a year, up from $175 now, and give these workers up to $1,110 if they are paying child support.
- A child care credit of 50% up to $6,000 of expenses a year.
- A "clean car" tax credit of up to $7,000 on the purchase of certain vehicles.
Here's the political catch. All but the clean car credit would be "refundable," which is Washington-speak for the fact that you can receive these checks even if you have no income-tax liability. In other words, they are an income transfer -- a federal check -- from taxpayers to nontaxpayers. Once upon a time we called this "welfare," or in George McGovern's 1972 campaign a "Demogrant." Mr. Obama's genius is to call it a tax cut.
The Tax Foundation estimates that under the Obama plan 63 million Americans, or 44% of all tax filers, would have no income tax liability and most of those would get a check from the IRS each year. The Heritage Foundation's Center for Data Analysis estimates that by 2011, under the Obama plan, an additional 10 million filers would pay zero taxes while cashing checks from the IRS.
The total annual expenditures on refundable "tax credits" would rise over the next 10 years by $647 billion to $1.054 trillion, according to the Tax Policy Center. This means that the tax-credit welfare state would soon cost four times actual cash welfare. By redefining such income payments as "tax credits," the Obama campaign also redefines them away as a tax share of GDP. Presto, the federal tax burden looks much smaller than it really is.
The political left defends "refundability" on grounds that these payments help to offset the payroll tax. And that was at least plausible when the only major refundable credit was the earned-income tax credit. Taken together, however, these tax credit payments would exceed payroll levies for most low-income workers.
It is also true that John McCain proposes a refundable tax credit -- his $5,000 to help individuals buy health insurance. We've written before that we prefer a tax deduction for individual health care, rather than a credit. But the big difference with Mr. Obama is that Mr. McCain's proposal replaces the tax subsidy for employer-sponsored health insurance that individuals don't now receive if they buy on their own. It merely changes the nature of the tax subsidy; it doesn't create a new one.
There's another catch: Because Mr. Obama's tax credits are phased out as incomes rise, they impose a huge "marginal" tax rate increase on low-income workers. The marginal tax rate refers to the rate on the next dollar of income earned. As the nearby chart illustrates, the marginal rate for millions of low- and middle-income workers would spike as they earn more income.
Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job. As public policy, this is contradictory. The tax credits are sold in the name of "making work pay," but in practice they can be a disincentive to working harder, especially if you're a lower-income couple getting raises of $1,000 or $2,000 a year. One mystery -- among many -- of the McCain campaign is why it has allowed Mr. Obama's 95% illusion to go unanswered.
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October 19, 2008 at 7:31 p.m.Thanks sandwich for the gold star, but Id save them for the people that really deserve them, like people in the armed service of our Nation, people like your son.
They deserve a gold star and a pat on the back for a job well done. They deserve our help, support and our prayers, may God bless and protect them.
rollingstone, you get the gold star.
October 19, 2008 at 8:36 a.m.
October 18, 2008 at 9:16 p.m.I dont know why we are even discussing tax breaks, credits, subsidies, loan guarantees or any of this other junk by the federal government. It is all smoke and mirrors, gimmicks. In case no one has noticed the National Debt increased one trillion dollars in fiscal 2008 and it is expected to be at least that in 2009. At this rate we will have to turbo charge the printing presses just to keep up with the interest payments.
Its not taxes its spending. Its completely out of control and the idiots we are about to elect are proposing more spending not less. What we are doing to our children and grand children is madness.
Of course the following is only my personal opinion so no cut and paste required....
October 18, 2008 at 8:56 p.m.If any of us in the collective group known as "the public," "the taxpayers," or "the voters" believe that either of these candidates will effectively cut taxes, I believe he or she is living in a fantasy world. I'm basing that opinion though on historical events, not future promises. One doesn't have to go back that far. Bush 41's immortal, "Read my lips" preceded expansive taxation and Slick Willie ran on a platform of lowering taxes then his administration made sweeping tax increases less than a year into his tenure.
The fact is that almost without exception presidential candidates have run on lowering - or at least not raising - taxes and just as routinely proceeded to raise taxes. And how, in light of the fact that we're spending billions per month in Iraq and just passed a sweeping $1trillion welfare package, can either platform seriously consider lowering taxes in the face of the trillions we owe?
The only time, again historically, taxes have actually been lowered by an administration is in a campaign year preceding the incumbent's run for a second term. (c.f. the infamous Bush Tax Cuts of 2003)
So yes, what each candidate promotes as his "tax plan" that currently includes apparently sweeping tax advantages and reform will, I'm certain, magically transform into just the opposite within a few months.
The only real argument to be had here is how and to whom those tax increases will applied.
Ernie
When the government takes money away from its taxpayers to pay a soldier and such it is called paying a bill for services rendered, or property like a building and such.
October 18, 2008 at 8:03 p.m.When it takes money away from its taxpayers to give to a person for no services, no salary, no property, no input what so ever it is called "welfare". And to increse taxes on those taxpayers, small income or large, to pay for that welfare, to those that will not work versus those that cannot, to create an ever increasing underclass depended on the elitist in guvmint, IS A CRIME!!!!!
If those taxes were used to go after the wall street crooks, AND those crooks in congress that allowed and even pushed the actions that created this BS bailout it would not be so bad.
Sorry if the cut and paste offends you. Most people do not read WSJ, IBD, Heritage and such so it is good to get these articles out there. I cannot word it any better, and it is my feelings.
Nowhere else but in south Texas have I seen such a brilliant illustration of the term "preaching to the choir."
I was talking to a democrat the other day and the interesting statement he made was: Republicans in small towns and lower income groups are under such a delusion that they would want to vote for the candidate who's policies would heart them - the most.
Some of these commentators are over 50 years old, and I am dumbfound at the superficiality of their "research" which mostly is adapting the data from the conservative organizations such as AEI and The Heritage Foundation and copying and pasting content from other websites.
I have to succumb to the similar technique and copy and paste what other readers of this article think:
1) McCain is not proposing a $5000 INDIVIDUAL tax credit for health insurance.
He's proposing $2500 for individuals. Plus he proposes taxing health care benefits as income. The "$5000" credit is for "families". My doctor says his family of 4 pays $12,000/year & rising for their health insurance. My 59 year old artist friend pays $600/month for his health insurance (it has risen greatly ever since he turned 45). He works part-time to pay it, but makes too little to pay income tax. Will he get a check in the mail even tho he doesn't pay taxes? Also, McCain's plan won't help those with pre-existing conditions who can't get insurance. We'll still have many millions who won't be insured because health care is STILL unaffordable.
Adding my own job's health care benefits to my income will put me in a higher tax bracket. My taxes will go up. McCain keeps stating he won't raise taxes, but that is false.
I suspect other distortions in "Obama's 95% Illusion", and hope Obama's campaign will quickly correct them.
2) When the government takes revenue generated by taxes and gives it to someone else, be that entity a defense contractor for weapons, a soldier as salary, a builder for a new library of congress, a congressional staffer for research or a non tax payer for no reason at all, that is what we used to call spending. So what Mr. Obama is proposing in nothing more than a massive new spending program. Calling it a tax cut is pure b___ s___. Fits with the rest of his campaign promises though,
and you can read many more at: http://forums.wsj.com/viewtopic.php?t...
I hope I am not preaching to the choir, and there are many of you who would disagree, all I request when you do, let that be your brain's call not your heart's - we are talking about money here.
October 18, 2008 at 7:29 p.m.Nietzsche
Share the wealth hmmm...
October 18, 2008 at 4:07 p.m.How about share the work? nah, been tried didn't work.
Cartoons are over with I see BIGJ.
October 18, 2008 at 3:38 p.m.
October 18, 2008 at 12:43 p.m.To take one mans earnings and give them to another is change alright its called slavery. It is not change it is revolution.
Keep telling it like it is Sandwichh.
October 18, 2008 at 11:39 a.m.