Note the following:
That's called "welfare," folks. Let the transformation into a welfare state begin. Of course this is now surprise. We've heard Obama state in the past, most notably with Joe the Plumber, that sharing the wealth is good for everybody.
- 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. Once upon a time we called this "welfare," or in George McGovern's 1972 campaign a "Demogrant." Mr. Obama's genius is to call it a tax cut.
How is an bottomless cup of handouts for lazy, unmotivated poor people good for everybody? It doesn't make said poor people any richer, instead it makes everyone else poorer. Remember that Winston Churchill once said, "The vice of capitalism is that there is an unequal share of the blessings; the virtue of socialism is that there is an equal share of the misery."
Obama has also stated that 95% of the population will receive a tax break. Technically, that's impossible since a significant chunk of this country do not pay taxes. How he can reward those that do not pay taxes is through this concept of wealth redistribution. The "tax breaks" for those that do not pay taxes will come in the form of various refunds.
Regarding the notion that "rich" people do NOT share the overall tax burden, Dick Morris states the following:
In fact, the rich are paying vastly more in taxes than they ever have. "Reality Check," by Dennis Keegan and David West, points out that the percentage of income-tax revenues paid by the top percent of the population has almost doubled in the last 20 years; it now pays 40 percent of all income tax. (The bottom half in income pays less than 3 percent.) Despite the lower rates, the rich are paying more in taxes because they are earning more and more. In the last eight years, real, after-inflation income growth for the top 10 percent of the population has been more than 45 percent.It's easy political fodder for the Left to blame President Bush and the upper class for the mortgage crisis and the supposed disastrous policies from the former. But what happens when you start taxing the upper class, and all forms of business owners?
These disastrous economic policies lie not in the Bush tax cuts, but instead with the increases in spending and the subsequent expansion of the federal deficit. It's almost an economic given that if taxes are lowered, revenues increase. Note the following:
Let's step back from the politics and ask one simple question: Does the idea of supply-side economics make fundamental good sense or not?
According to the TaxProf blog, hundreds of economists have signed an letter opposing Obama's tax to plan:
I say that it does. It's so simple: Tax rates that are too high can be self-defeating, and so lowering them can increase total revenues. Bartlett told me that this idea can be traced all the way back to Jonathan Swift, who wrote in 1728 that "in the business of heavy impositions, two and two never make more than one." He noted that economists and philosophers from Smith, Montesquieu, Say, and Mill, to von Mises and Keynes, wrote about the basic principle.
In the modern era, of course, no economist is more closely associated with supply-side economics than Arthur Laffer. He embodied the idea as the famous Laffer Curve, which illustrates that government will earn no revenues at all if tax rates are either zero or 100%. Somewhere in between is a tax rate at which government revenue is maximized. So when rates are too high — too near 100% — revenues can be increased by cutting taxes.
Again, what Obama and his minions in the Democratic Party have done, enabled by their partners in crime in the corrupt media is simply lie to the public, whether it's about the economy, global warming, or big oil.
We are equally concerned with his proposals to increase tax rates on labor income and investment. His dividend and capital gains tax increases would reduce investment and cut into the savings of millions of Americans. His proposals to increase income and payroll tax rates would discourage the formation and expansion of small businesses and reduce employment and take-home pay, as would his mandates on firms to provide expensive health insurance.
After hearing such economic criticism of his proposals, Barack Obama has apparently suggested to some people that he might postpone his tax increases, perhaps to 2010. But it is a mistake to think that postponing such tax increases would prevent their harmful effect on the economy today. The prospect of such tax rate increases in 2010 is already a drag on the economy. Businesses considering whether to hire workers today and expand their operations have time horizons longer than a year or two, so the prospect of higher taxes starting in 2009 or 2010 reduces hiring and investment in 2008.