Obama's 95% Illusion
Wall Street Journal
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.
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."
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:
- 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.
(Continued here.)
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.
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."
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:
- 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.
(Continued here.)
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1 Comments:
The left dumb down our children in the public schools so they can feed them lines like 'the benefits of the Bush tax cuts went to the richest 1% of Americans' and 'middle class tax cuts'.
I have long tried to correct the 'tax cut' debate that the left has obfuscated in to meaning a government program a la welfare. A tax cut is not a government check, but is merely a discount - just like a discount on apple pies in a grocery store. I am pleased to read that VV would publish a piece that points out the 'tax cut' ruse the Obama has so cleverly packaged.
Tax cuts can be summed up in the following example:
Suppose you open a market and you decide to sell apple pies for $2. On day one, you have a sign in your window which says that if you under the age of 20, the pies are free. So, on day one, an eighteen year old and a thirty year old walk in to the store to buy a pie. The 18 year old would pay $0 for the pie and the 30 year old would pay $2. On day two, you put up a new sign in your window which states that apple pies are now half-off and that pies are still free if you are under 20 years old. So, on day two, the eighteen year old and the thirty year old come back to the store to buy a pie. The 18 year old would pay $0 for the pie and the 30 year old would pay $1 for the pie.
In this example, the discount for the 30 year old is analagous to a tax cut - it is a reduction in the amount of money the 30 year old owes to the store owner, not a check paid to the 30 year old by the store owner. But, the left in this country would have you believe that the 30 year old received the 'benefits' of the 'tax cut' (i.e. the discount) and that the 18 year old received no benefits at all, when in fact, the 18 year old received the most benefits - he got two apple pies AND didn't have to pay anything for them. The 30 year old got two apple pies, but had to pay $3 to the store owner to get them. The 18 year old is actually richer on day three than he was before he walked in to the store on day one.
In this example, the left equate the $1 reduction in cost to the 30 year old as a 'benefit', when all that really happened was that he paid $3 for the two pies instead of $4. But, that $1 difference is what the left - and Obama - call the benefit. Nevermind that the 30year old did not receive any money from the store owner which would have been a real benefit, the fact that he got the discount while the 18 year old did not is the point the left makes with the whole 'tax cuts for the rich' ruse they espouse.
McCain has done nothing to expose this ruse in this election and it's fairly clear that Obama will win the presidency. We won't get straight talk from President Obama, we'll get more esoteric Harvard-speak whose point will be to hide the truth about what tax policies are truly being implemented by Obama.
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