Obama's Tax Plan Is Really a Welfare Plan

The Wall Street Journal ^ | Aug. 19, 2008 | PETER FERRARA

[FocusNexus]

Barack Obama's tax plan is the opposite of supply-side economics. He proposes to raise marginal rates for just about every federal tax. He also proposes a raft of tax credits that taxpayers can receive if they engage in various government-specified activities.

Moreover, the tax credits would mostly go to those who pay little or nothing in federal income taxes. His trick is to make the tax credits "refundable." Thus, if the tax credit is for $1,000, but the taxpayer would otherwise only pay $200 in taxes, the government would write a check to the taxpayer for $800. If the taxpayer pays nothing in federal income taxes, the government would pay him the whole $1,000.

Such credits are not tax cuts. Indeed, they should be called The New Tax Welfare. In effect, Mr. Obama is proposing to create or expand a slew of government spending programs that are disguised as tax credits. The spending on these programs is then subtracted from the total tax burden, in order to make the claim that his tax plan is a net tax cut overall.

[FocusNexus]

Mr. Ferrara is director of entitlement and budget policy for the Institute for Policy Innovation. He served in President Reagan's White House Office of Policy Development, and as associate deputy attorney general under the President George H.W. Bush.

McCain is right -- Obama is THE TAXMAN.

[bruinbirdman]

"When "tax credits" primarily go to this group in the form of checks from the government (rather than a reduction in their tax burden) it is simply an abuse of the language to call the spending a tax cut."

Nifty. Family pays no income tax yet gets EITC refund from Uncle Sam. Obama wants to give them more EITC money and calls it cutting their taxes, ie. cutting taxes for 40% of 'Mercuns.

yitbos

[bruinbirdman]

Although WSJ mentions the "Making Work Pay" as "$500 to each worker and $1,000 to couples -- reminiscent of George McGovern's 1972 election proposal", it misses the big point of the give away.

"Obama will create a new "Making Work Pay" tax credit of up to $500 per person, or $1,000 per working family. This refundable income tax credit will provide direct relief to American families who face the regressive payroll tax system.".

Kids who work part time and earn little, file only for a return of their "income tax". Often, they earn so little that a standard deduction causes no "income tax" to be withheld. Many don't file a tax return at all.

Obama is telling everyone to look at their FICA (Social Security) and tells them, "that tax is nowhere on your 1040." Then he is telling them that when he is president, he will refund that tax up to $500 for singles and $1000 for couples. He is also asking them, "Do you really think you are going to receive SS when your 65?"

yitbos

[bruinbirdman]

B. Hussein's tax plan is here at his own web site under Family. Scroll down to Barack Obama's Plan/ Support Working Families/Provide a "Making Work Pay Tax Cut" for America's Working Families

yitbos

[4woodenboats]

bad link

[Snickersnee]

Obama’s “plan” can be summed up in a word: redistribution.

[Wolfie]

Does it really matter? Repuclicans and Democrats agree that we can borrow ANY amount to pay for everything the Feds want to do.

[snowman1]

“WE WILL TAKE FROM YOU FOR THE COMMON GOOD”. outright socialism.

[Wolfie]

Oh, everybody likes some socialism. The “common good” is the basis for a slew of laws put into place to regulate personal behavior.

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