Posted on 10/19/2008 12:29:42 AM PDT by Maelstorm
Economic downturns historically have favored the party out of power at election time. Despite this, Sen. McCain was holding even with Sen. Obama until the “bailout” episode began and financial markets fell into turmoil. Many economists now say we are entering a recession.
It is widely agreed that raising taxes in a recession is a bad ideas. So, Sen. Obama has shifted his emphasis from talking about higher taxes for “the very rich” to “tax cuts for 95 percent of working families.”
Most people consider a cut in taxes means they will get to keep more of what they have earned.
Sen. Obama doesn’t, for he has, in effect, redefined “tax cuts” to include tens of billions of dollars of federal government handouts disguised as “tax credits.” His program includes no fewer than seven of these, and all but one of them would be “refundable.” A refund is usually a return of something you have paid in. In the lexicon of Washington, however, it means getting a check even if you paid no taxes. The non-political, nonpartisan Tax Foundation estimates that under Sen. Obama’s plan, 44 percent of all tax filers would have no tax liability (that’s 63 million people). Most of these would get a “refund” check from the IRS each year for which they had paid nothing in. This number would grow. By 2011, it is estimated that 73 million tax-return filers would be paying no income tax, but getting a check from the government. These tax “credits” would rise over 10 years from $647 billion to $1.054 trillion a year!
Meanwhile, tax rates would go up for the tiny percentage of filers who pay the lion’s share of all income taxes already. This has the disadvantage of eroding any incentive for making new capital investments. Small businesses are the major engine of job growth, but Obama’s plan would increase taxes for small businesses taxed as “Subchapter S” corporations that make at least $250,000. This would reduce their ability to invest in expansion and new jobs.
Last weekend, Sen. Obama finally spoke frankly about what his plan is: income redistribution, a welfare program (from those who pay to those who don’t). In his now-famous encounter with “Joe the Plumber,” he said, “I think that when you spread the wealth around it’s good for everybody.” Unlike most taxpayers, he thinks the economic “pie” cannot grow, so it must be redivided. It is good to know that before Election Day.
When the Bush tax cuts expire, that’s a stealth tax increase right there.
I've been batting around a couple of Obamites at youtube for the last few days. I called Obama's economic plan, gurgle up economics.
“Tax cuts” are an out and out lie as long as the government continues to spend more money than it takes in. Whom are they fooling?
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