Wednesday, October 15, 2008

Obama and the Myth of Cutting Taxes on 95% of Americans...40% don't even pay income taxes

Instead of telling voters to just give praise to the Beloved Leader, the Obamessiah, John McCain should be nailing Obama on his lie of a tax cut to 95% of Americans. It isn't even that hard John. The WSJ did the heavy lifting, with like charts and graphs and stuff:

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.

It's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut." ...

Mr. Obama is proposing to create or expand no fewer than seven [tax] credits for individuals:

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. ...

In other words, the beloved leader will send you a check, even if you don't pay taxes. You will love him because he gives you free money. Praise be to the beloved one! However, don't dare earn any more money than your lowpaying job, because here is what will happen to you if you do:

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. ...

So, if you get a promotion, if you do well at your job and get a raise, if you do well and earn more money, you will get a HUGE tax increase (see chart in article)

The article concludes with one of among many questions I have for the McCain Shampaign:

One mystery -- among many -- of the McCain campaign is why it has allowed Mr. Obama's 95% illusion to go unanswered.

No comments: