WSJ has some interesting analysis of Obama’s tax plans.
- Obama
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:
[…]
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…
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.
Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job. As public policy, this is contradictory. The tax credits are sold in the name of “making work pay,” but in practice they can be a disincentive to working harder, especially if you’re a lower-income couple getting raises of $1,000 or $2,000 a year.
Notice that huge spike there right after the $25,000 mark? The ENORMOUS disparity at the $45,000 line? This is how he’s going to help the little guy?
Obama is selling himself using our money, so he can take our money and then maybe give some of it back, but definitely give most of it to someone else. But people don’t see this. All they can see are the dollar signs pointing at them, never considering once that they’re NOT actually entitled to any of it.
“The American Republic will endure, until politicians realize they can bribe the people with their own money.” — Alexis De Tocqueville
Oh, one more tidbit from a different WSJ article, this one on the “taxation” of healthcare benefits:
All in all, workers would come out ahead with the McCain plan. According to the left-leaning Tax Policy Center, the average taxpayer would see his tax bill drop by $1,241 in 2009. On average, lower-wage workers have more limited coverage as part of their compensation, mostly from small- or medium-size businesses. But the more generous the employer health plan, the more the tax subsidies increase. According to the Joint Committee on Taxation, the current employer benefit is only worth between $600 and $3,000 for people making under $100,000. The upper-income brackets save between $4,000 and $5,000.
The most affluent — i.e., the top quintile of earners — would be slightly worse off after 2013 under the McCain plan, though they’d still have plenty of options. Even as he routinely promises to raise taxes on “the rich,” Mr. Obama is leaping to their unlikely defense here only to frighten everyone else. The McCain plan is fairer than the status quo, which subsidizes the most expensive employer (and union) insurance plans.
A Defending Crusader... 