Words do have meaning

Remember when Barry uttered that line. Funny coming from someone whose use of the language is on par with "it depends on what the meaning of is, is".

Now we have Barry making the claim that 95% of working families will have their taxes cut. Websters says cut means reduce the size, extent as in cut the labor force. We have been talking about this in the past but I want to know how Barry can cut taxes from people who already do not pay them.

Under current tax laws, IRS statistics for 2006 show that 45.6 million tax filers, essentially one-third of all filers, have no tax liability after taking their credits and deductions. “For good or ill,” notes the Tax Foundation, “this is a dramatic 57 percent increase since 2000 in the number of Americans who pay no personal income taxes.” But I thought that President Bush's tax cuts only went to the rich. Isn't that what the media has been chanting like the mantra of a buddhist monk during prolonged meditation? They did say 57%. This must be a mistake, the main stream media would never slant the truth would they?

"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." From the excellent WSJ column that even has a wonderful chart which shows the phase out levels of tax credits. http://online.wsj.com/article/SB122385651698727257.html

The chart is very interesting because it shows the unbelievable spikes in marginal tax rates at the phase out levels of Barry's proposed "tax cuts". People are going to have to keep a close watch on their taxable income or they might find themselves taking home substantially less after taxes by just earning a little more.

Here's the political catch. Almost all of Barry's proposed tax credits are "refundable," which means that you can receive these checks even if you have no income-tax liability. In other words, they are an income transfer from taxpayers to nontaxpayers. Once upon a time we called this "welfare,". Barry calls this a tax cut.

The Tax Foundation estimates that under the Obama plan 63 million Americans, or 44% of all tax filers, would have no income tax liability and most of those would get a check from the IRS each year. The Heritage Foundation's Center for Data Analysis estimates that by 2011, under the Obama plan, an additional 10 million filers would pay zero taxes while cashing checks from the IRS.

The total annual expenditures on refundable "tax credits" would rise over the next 10 years by $647 billion to $1.054 trillion, according to the Tax Policy Center. This means that the tax-credit welfare state would soon cost four times actual cash welfare. By redefining such income payments as "tax credits," the Obama campaign also redefines them away as a tax share of GDP. Presto, the federal tax burden looks much smaller than it really is.

It is disingenuous to claim that he will give 95 percent of all American workers a "tax cut," because he does not mention that it will mean sending checks to millions of tax filers who pay no personal income taxes.

It certainly looks "suspiciously like welfare" or income redistribution from wealthier taxpayers to lower-income Americans to me. But it also raises the question, How can he call it a "tax cut" when its recipients pay no income taxes?

Under his "Making Work Pay" income tax cut for low- to middle-income people, he will give a "refundable" $500 tax credit to low- to middle-income workers or $1,000 to couples. It would begin to phase out at $75,000 for individuals and $150,000 for a couple.

But because he makes it "refundable," he will pay the equivalent amount to those who have no income-tax liability after taking the usual tax credits and deductions in the tax code. Those checks would come from taxes to be paid by higher-income Americans.

"What he's really talking about doing is mailing a check and, to me, that looks more like a welfare program than the kind of real tax relief that would encourage work, savings and investments," said Phil Kerpen, policy director at Americans for Prosperity, a free-market advocacy group.

Obama claims that almost all workers (95 percent) will benefit from his "tax cuts." But Investor's Business Daily points out that Obama's "'working families' does not include all households. Throw in singles, retirees, students and the unemployed, and the share getting some tax-related benefit is a good deal less."

The Tax Policy Center, a nonpartisan tax-analysis group established by the liberal Urban Institute and the Brookings Institution, dismisses his 95 percent figure, saying that about 80 percent of households would receive a tax cut. Throw in the tens of millions of tax filers who owe no taxes, and the percentage of taxpayers getting real tax cuts falls a lot lower.

The Obama campaign's chief economist Jason Furman told me in an e-mail that "the tens of millions of families working hard and paying payroll taxes do not think that tax cuts are a form of 'welfare' or 'redistribution' -- they think it is only fair to reward work."

Roberton Williams of the Tax Policy Center said "one can argue" that workers who don't pay income taxes "are paying Social Security payroll taxes, and this is a tax cut against that."

But is this just another clever way for Barry to redistribute the nation's income, taking from high-income taxpayers who pay the lion's share of all income taxes and giving it to lower-income workers who pay none?

Williams doesn't dispute this. "You could view it that way because both (tax) proposals are in the same tax plan," he said. "There's no question that's one way to perceive the tax plan." Exactly.

So this is what's at the core of Obama's economic policies -- taking more money from one group of taxpayers and directly transferring it to those in the lower- to middle-income tax brackets who pay little or no income taxes to begin with.

Instead of cutting everyone's taxes to encourage work, investment and savings by enlarging the economic pie, Obama would redivide the pie into smaller slices and redistribute it through the tax system.

Please someone show me a real world example where this type of policy has actually worked in bringing an economy out of a recession. I have heard a lot of people make the claim that there is no way that Obama can be worse than Bush. Wanna bet? With socialist policies like these that have never worked we will be on the fast track to third world status. Of course than we will have the rest of the world finally loving us like so many liberals crave. We will be sort of like the crazy old uncle in the corner who everyone remembers from his more vigorous days. As the rest of the western economies continue to cut income taxes and become more business friendly like Ireland, Poland, Germany, Canada, Czech Republic, etc. we will raise taxes on the portion of the economy that we should be relying on to get us back on our feet. Too much social reengineering got us into this mess and now the American public is falling for this "class warfare" garbage economic proposal that is eerily similar to giving mortgages to those who can't afford them. How does Barry propose that the recipients of this new form of welfare are going to use this payment to help create economic prosperity. Does he think buying a bunch of large screen HDTVs will magically fix things? Too bad that a lot of these people will be the first ones laid off when their employer has to cut back due to the recession that continues to deepen. But then lets look at the bright side they will still be getting their "tax cut" every year. Try feeding a family of four on it!