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Bottom 70 Percent of Families Will Receive More Benefits Than They Pay in Taxes Under Obama Plan
Tax Foundation ^ | September 21, 2009

Posted on 09/25/2009 10:11:32 AM PDT by reaganaut1

New reports from the Tax Foundation show that President Obama's policy proposals will increase the financial dependence of middle-income Americans on the federal government.

"Attempts to put 'price tags' on health care and cap-and-trade proposals vary among government agencies and think tanks," said Tax Foundation President Scott Hodge, "but one vital question has been left unanswered: Counting all federal taxes and spending, how would these policies affect American families' financial ties to the government? The foundation's new 'fiscal incidence model' answers that question."

"Currently the bottom 60 percent of the income spectrum receives more in federal spending than they pay in federal taxes," said Hodge. "By 2012, if President Obama's proposals on taxes, health care and climate change become law, the bottom 70 percent of American families will, as a group, be receiving more in federal spending than they pay in federal tax."

Even if none of Obama's policies becomes law, the extent of current income redistribution is remarkable: The top-earning 40 percent of families will transfer $826 billion to the bottom 60 percent in 2012. If Obama's policies become law, the federal government will redistribute nearly $1 trillion from the top-earning 30 percent of families to the bottom 70 percent (those earning up to $109,000).

Incorporating new data from the Mid-Session Review of the President's Budget, as well as recently released aggregate economic data from BEA and new income tax statistics from the IRS, Hodge has authored two new analyses in the Tax Foundation Fiscal Fact series: "Accounting for What Families Pay in Taxes and What They Receive in Government Spending" and "Basic Facts on Redistribution and the Impact of Obama's Policies." The two publications are available online at http://www.taxfoundation.org/news/show/25195.html and http://www.taxfoundation.org/publications/show/25196.html, respectively.

(Excerpt) Read more at taxfoundation.org ...


TOPICS: Business/Economy; Front Page News; News/Current Events
KEYWORDS: 111th; agenda; bho44; redistribution; socialism; taxes; votebuying; welfarestate
Many Democrats will still try to pay for new spending by taxing the "rich", and many of the "rich" will still vote Democratic. I don't get it.
1 posted on 09/25/2009 10:11:33 AM PDT by reaganaut1
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To: reaganaut1

And to think a few years ago, folks on this board were downplaying the risk of deficits.


2 posted on 09/25/2009 10:12:35 AM PDT by DonaldC (A nation cannot stand in the absence of religious principle.)
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To: reaganaut1

Obama will raise so many taxes, you will not be able to keep up with them.


3 posted on 09/25/2009 10:13:06 AM PDT by stephenjohnbanker (Pray for, and support our troops(heroes) !! And vote out the RINO's!!)
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To: reaganaut1

70% of the 2%.


4 posted on 09/25/2009 10:15:09 AM PDT by boomop1
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To: reaganaut1
Even if none of Obama's policies becomes law, the extent of current income redistribution is remarkable: The top-earning 40 percent of families will transfer $826 billion to the bottom 60 percent in 2012. If Obama's policies become law, the federal government will redistribute nearly $1 trillion from the top-earning 30 percent of families to the bottom 70 percent (those earning up to $109,000).

Which will have the result that anybody attempting to reduce government will have that 70% being told that doing so will result in their benefits being cut. This is the plan for Dem long-term dominance.

5 posted on 09/25/2009 10:15:23 AM PDT by PapaBear3625 (Public healthcare looks like it will work as well as public housing did.)
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To: reaganaut1

Benefits! Benefits for Everybody!


6 posted on 09/25/2009 10:16:23 AM PDT by uncitizen
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To: reaganaut1

When the people find that they can vote themselves money, that will herald the end of the republic. — Benjamin Franklin


7 posted on 09/25/2009 10:16:32 AM PDT by FreedomProtector
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To: FreedomProtector
It's Time to Part Company
8 posted on 09/25/2009 10:18:21 AM PDT by B.O. Plenty (Give war a chance...)
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To: PapaBear3625

Don’t forget the now famous saying by Obama....”Our time has come!” Who do people think he was talking about?


9 posted on 09/25/2009 10:21:12 AM PDT by RC2
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To: reaganaut1

Liberalism is organized crime, robbing Peter to bribe Paul.


10 posted on 09/25/2009 10:23:16 AM PDT by TexasRepublic (Obama = Jim Jones coercing us into suicide on a national scale)
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To: reaganaut1
Many Democrats will still try to pay for new spending by taxing the "rich", and many of the "rich" will still vote Democratic. I don't get it.

The rich have tax-exempt, "charitable" foundations from which to buy influence in the Congress and the courts.

This is an example of how the Great Game really works.

11 posted on 09/25/2009 10:24:17 AM PDT by Carry_Okie (Islam offers three choices: surrender, fight, or die.)
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To: reaganaut1; CSM

Note to self:

*No overtime pay next spring; you’re not gaining anything compared to what you’re losing in confiscatory taxes from the local, state and federal b@stards.

*Barter and trade for what you need. No spending beyond the very basics for the next 1,213 days.

*Earn as much cash under the table as possible.

*All money out of the market except the small 401K from work that is acting solely as a hedge for now. (See below.) Keep on track with gold and silver purchase/sale plan.

*Increase tax exemptions on W-4 form.

*Increase payments into 401K, medical slush fund, etc. through employer. Make as much of my earnings pre-tax as possible while I meet my few financial obligations.

*CCs are paid off and no car payment, so throw extra on the mortgage each month.

*Buy more ammo.

*Pray.


12 posted on 09/25/2009 10:24:18 AM PDT by Diana in Wisconsin (Save The Earth. It's The Only Planet With Chocolate.)
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To: PapaBear3625

It happened under Bush as well. Not defending it, but I blame them all....


13 posted on 09/25/2009 10:24:49 AM PDT by Patriotic1 (Dic mihi solum facta, domina - Just the facts, ma'am)
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To: reaganaut1
Only problem is this argument is based on a complete mis-understanding of how taxes work.

Everyone pays much more in taxes then they realize. The Govt just collects it from the businesses that make the products. We pay those taxes by paying higher prices for every single good and service we purchase

Also, everyone who works pays payroll and medicare taxes. So the notion that “70%” don't pay taxes” is highly misleading at best.

14 posted on 09/25/2009 10:26:19 AM PDT by MNJohnnie (The 0 regime: harmless as an enemy and treacherous as a friend.)
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To: reaganaut1; Jet Jaguar; NorwegianViking; ExTexasRedhead; HollyB; FromLori; ...

The list, ping


15 posted on 09/25/2009 10:27:35 AM PDT by Nachum (The complete Obama list at www.nachumlist.com)
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To: Patriotic1
It happened under Bush as well. Not defending it, but I blame them all....

No it did not. Bush did not raise taxes. He cut everyones taxes.

16 posted on 09/25/2009 10:27:35 AM PDT by MNJohnnie (The 0 regime: harmless as an enemy and treacherous as a friend.)
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To: Diana in Wisconsin

Atlas Shrugs.


17 posted on 09/25/2009 10:30:08 AM PDT by CSM (Business is too big too fail... Government is too big to succeed... I am too small to matter...)
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To: MNJohnnie
Also, everyone who works pays payroll and medicare taxes. So the notion that “70%” don't pay taxes” is highly misleading at best.

That's not the notion, though. If you pay me $12 for every $100 you make, but I give you back $20 in services, food, and direct cash payments, are you better off for it?

18 posted on 09/25/2009 10:36:33 AM PDT by PugetSoundSoldier (Indignation over the Sting of Truth is the Defense of the Indefensible)
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To: reaganaut1

This trend really started rolling when Reagan expanded the EITC against all advice that this very thing would happen. The Gipper blew very few calls in his time, but this was certainly one of them. (Withdrawl of Marines from Lebanon and Sandra Day O’Connor the only others that come to mind)


19 posted on 09/25/2009 10:37:22 AM PDT by Buckeye McFrog
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To: reaganaut1

20 posted on 09/25/2009 10:37:59 AM PDT by The Comedian (Evil can only succeed if good men don't point at it and laugh.)
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To: Buckeye McFrog

“This trend really started rolling when Reagan expanded the EITC against all advice that this very thing would happen. The Gipper blew very few calls in his time, but this was certainly one of them. (Withdrawl of Marines from Lebanon and Sandra Day O’Connor the only others that come to mind)”

Amnesty.


21 posted on 09/25/2009 10:40:08 AM PDT by truth_seeker
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To: reaganaut1

That’s exactly what Barry meant about spreading the wealth around.


22 posted on 09/25/2009 10:42:11 AM PDT by The Great RJ ("The problem with socialism is that you eventually run out of other people's money." M. Thatcher)
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To: PugetSoundSoldier
Only problem is the notion that you “get” services back from the Feds for what you pay is nonsense. Under this notion when you get to take your Mortgage Deduction off your taxes you are “getting” a service.

No, you are getting to KEEP your own money. That is not a “Service” from the Feds. This also ignore things like Gas taxes etc that we all pay to fund things almost NONE of us actually use, like Mass transit schemes. Even though those are useless, they are counted as “goods and services” we “get” from the Govt. No they are ego building projects foisted on us by politicians looking to hand out tax dollars to their campaign donors.

23 posted on 09/25/2009 10:43:07 AM PDT by MNJohnnie (The 0 regime: harmless as an enemy and treacherous as a friend.)
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To: PugetSoundSoldier
If you pay me $12 for every $100 you make, but I give you back $20 in services, food, and direct cash payments, are you better off for it?

Not if its $20 in government delivered services. As a rule of thumb, 50% of any wealth that passes through the government's hands is destroyed. In general, civilian government workers cost much more than the free market value of their output.

24 posted on 09/25/2009 10:44:14 AM PDT by Reeses
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To: DonaldC

25 posted on 09/25/2009 10:46:32 AM PDT by traditional1 ("Don't gots to worry 'bout no mo'gage, don't gots to buy no gas...Obama gonna take care o' me!")
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To: reaganaut1
Middle-income families, who are the targeted beneficiaries of many Obama policies, will receive $1.15 in government spending benefits for every dollar they pay in taxes.

I'm unclear on what they're counting as "benefits" for middle-income families. Are they all on food stamps? Or is the author counting things like the mortgage deduction as a "government spending benefit"?

26 posted on 09/25/2009 10:47:49 AM PDT by maryz
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To: PapaBear3625

Conservatives cannot compete with vote buying schemes. Free money yields votes. The only brake to vote buying schemes is a sharp economic decline probably involving a dollar decline and high unemployment. However, we may never recover from a dollar decline so conservatives may not be able to change the situation much. Conservatives would need solid control of government to affect any substantial change anyway. Even in 2004 - 2006, conservatives never had control of government.


27 posted on 09/25/2009 10:48:58 AM PDT by businessprofessor
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To: reaganaut1

If you believe this, you are a d@mn fool. This may indeed be the case for the first few years. But soon enough, that top 30% will figure out how to hide their assets better and taxes will have to go up yet again on the bottom 70%.


28 posted on 09/25/2009 10:50:14 AM PDT by Antoninus ("There is no movement," --G. W. Bush)
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To: reaganaut1

“...70 percent of American families will, as a group, be receiving more in federal spending than they pay in federal tax.”

Then,IMHO, those 70% should not get to vote (more money out of my pocket).


29 posted on 09/25/2009 10:53:50 AM PDT by Never on my watch (Do you REALLY think Obama is just going to let us vote him out of office?)
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To: reaganaut1

Let’s think about this for a second...if the the top 30% become the main source for paying for all of these idiot ideas, it is only a matter of time before they feel that they now “own” the people that they are paying for. In all reality, it sounds like we are doing a 1,000 year full circle back to serfdom.


30 posted on 09/25/2009 11:03:25 AM PDT by Fedupwithit (The Constitution was written with a pen, and it was enforced with a gun. No one listens to a pen.)
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To: Antoninus
that top 30% will figure out how to hide their assets better and taxes will have to go up yet again on the bottom 70%

Any educated married couple who work will by the end of their working careers rise into the top 30%. A lot of this "class" division is artificial, the jealousy of a 20 year old for the earnings of a 40 year old when by the time he is 40 will have the same salary expectations.

31 posted on 09/25/2009 11:03:47 AM PDT by AndyJackson
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To: reaganaut1

As Margaret Thatcher stated, “The problem with socialism is that eventually you run out of other people’s money.”


32 posted on 09/25/2009 11:18:24 AM PDT by Ranger Warrior
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To: reaganaut1

And 95% of America will get a tax cut of $1.27...

Can’t wait!

Maroons...


33 posted on 09/25/2009 12:10:24 PM PDT by SeattleBruce (God, Family, Church, Country - Keep on Tea Partiers - party like it's 1773!)
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To: DonaldC

Well, you must admit that the risk from a 350 Billion Dollar deficit is quite a different thing than a 1.5 or 2 Trillion Dollar deficit.


34 posted on 09/25/2009 12:56:22 PM PDT by rlmorel (You cannot reap the benefits right now of the planning ahead you didn't do in the past.)
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To: reaganaut1

There’s only so much income to divert. Wealth tax is next.


35 posted on 09/25/2009 2:25:58 PM PDT by Pearls Before Swine (Is /sarc really necessary?)
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To: reaganaut1
this will not happen...

the only way to pay for the bank bailouts etc is for the majority of serfs to pay something....so look for larger sales taxes, more taxes or fees on parks,entertainment,restaurants, car registration,etc....

look for SS taxes to go up....

look for the quality of anything govt to go down briskly....

the govt knows where the easy money is...

36 posted on 09/25/2009 11:06:12 PM PDT by cherry
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To: Diana in Wisconsin
Diana, I've just stopped funding my 401k half way thru this year just because I am really afraid that the govt will take it over as they please....

I agree with you....the more money you make "on the books" the more money they tax...

I'd love to see more bartering and more under the table dealing....

we've got to get it into our heads that our govt is truely a monster and we have to starve the monster....

37 posted on 09/25/2009 11:10:30 PM PDT by cherry
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