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Tax plan is really a welfare plan

Sandhusker

Well-known member
Barack Obama's tax plan is the opposite of supply-side economics. He proposes to raise marginal rates for just about every federal tax. He also proposes a raft of tax credits that taxpayers can receive if they engage in various government-specified activities.

Moreover, the tax credits would mostly go to those who pay little or nothing in federal income taxes. His trick is to make the tax credits "refundable." Thus, if the tax credit is for $1,000, but the taxpayer would otherwise only pay $200 in taxes, the government would write a check to the taxpayer for $800. If the taxpayer pays nothing in federal income taxes, the government would pay him the whole $1,000.

Such credits are not tax cuts. Indeed, they should be called The New Tax Welfare. In effect, Mr. Obama is proposing to create or expand a slew of government spending programs that are disguised as tax credits. The spending on these programs is then subtracted from the total tax burden, in order to make the claim that his tax plan is a net tax cut overall.

On the tax side of the ledger, the details released by his campaign last week confirm what a President Obama has in mind for our most productive citizens. The top individual income tax rate, for example, would be increased by 13%, to 39.6%; the next-highest rate would be raised to 36%. The top rates on capital gains and dividends would rise by a third, to 20%

The Social Security payroll tax would be raised between 16% to 32% for families making over $250,000 a year. This means that the real returns these people get from their lifetime payments into the retirement program will be driven below 0%, according to my own previous research, which was published by the Cato Institute and elsewhere.

Mr. Obama also wants a permanent federal estate tax, with a top rate of 45%; his health-insurance plan includes a new payroll tax on employers; and he also contemplates several increases in the corporate income tax, including a new so-called windfall profits tax on oil companies.

Then there is the spending side of the ledger. Mr. Obama proposes a fully refundable Making Work Pay Tax Credit, which would have the government pay out $500 to each worker and $1,000 to couples -- reminiscent of George McGovern's 1972 election proposal for the government to send a $1,000 check to everyone.

His American Opportunity Tax Credit would provide a $4,000, fully refundable tax credit for college tuition expenses. His Mortgage Interest Tax Credit would provide a 10% credit -- refundable -- to offset mortgage interest payments for lower- and middle-income families. His Health Care Tax Credits, which the campaign says "will ensure that health insurance is available and affordable for all families," include "a new refundable 50 percent health tax credit on employee premiums paid by employers."

Currently existing tax credits would also become spending programs in the Obama tax program. The Savers Credit would be made fully refundable, and would be expanded, according to the campaign, "to match 50% of the first $1,000 of savings for families that earn under $75,000." The Child and Dependent Care Tax Credit would be made refundable and expanded to allow "low-income families to receive up to a 50 percent credit on the first $6,000 of child care expenses."

The Earned Income Tax Credit is already refundable. Mr. Obama would expand it to "increase the number of working parents eligible for EITC benefits, increase the benefits available to noncustodial parents who fulfill their child support obligations, increase benefits for families with three or more children, and reduce the EITC marriage penalty, which hurts low-income families." In short, welfare spending is to be increased by paying more money out to low-income income tax filers.

The latest Congressional Budget Office data shows the bottom 40% of income earners already pays no income taxes. Indeed, they receive a net payment from the federal income tax system -- meaning from the taxpayers -- equal to 3.8% of all federal income taxes, because of the refundable tax credits under current law. The middle 20% of income earners, the true middle class, pays 4.4% of federal income taxes.

Overall, the bottom 60% of income earners pay less than 1% of federal income taxes on net. When "tax credits" primarily go to this group in the form of checks from the government (rather than a reduction in their tax burden) it is simply an abuse of the language to call the spending a tax cut.

Consequently, to say, as the campaign does say, that the candidate's tax plan is a tax cut on net -- and that it would limit taxes to 18.2% of GDP -- is grossly misleading. The Obama tax plan would sharply increase real taxes. It also would come nowhere near to paying for the massive increases in federal spending he has proposed, including the spending that is disguised in the form of refundable tax credits.
 
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Anonymous

Guest
Well look where an economic policy and tax plan controlled 12 out of 14 years by a Republican Congress and the last 8 years by a Bush Regime Whitehouse has put us....
The closest to the Great Depression and complete Economic Collapse we've ever seen... :( :mad:

I'm tired of Socialism for the Rich and Elite Fatcats
Capitalism for the poor and working folks

Bush's sh*t runs downhill "trickle down" theory isn't working..

To me that is a good enough reason alone to vote for a "change"....
 

Sandhusker

Well-known member
Change, change, change, you're going to get it all right - same as the folks in Russia who wanted change in 1917.

You liberals are running so hard from Bush, but the problem is that you're running while looking backwards, not forwards, so you don't know where you're running to. You're runnng way from a skunk and straight to a bear. You're going to get your change, guaranteed.
 

backhoeboogie

Well-known member
Oldtimer said:
Well look where an economic policy and tax plan controlled 12 out of 14 years by a Republican Congress and the last 8 years by a Bush Regime Whitehouse has put us....
The closest to the Great Depression and complete Economic Collapse we've ever seen... :( :mad:

I'm tired of Socialism for the Rich and Elite Fatcats
Capitalism for the poor and working folks

Bush's sh*t runs downhill "trickle down" theory isn't working..

To me that is a good enough reason alone to vote for a "change"....

Keep trying OT.

All hard working folks I know have fared well the last decade. Many small businesses were birthed and prosperous.
 
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Anonymous

Guest
backhoeboogie said:
Oldtimer said:
Well look where an economic policy and tax plan controlled 12 out of 14 years by a Republican Congress and the last 8 years by a Bush Regime Whitehouse has put us....
The closest to the Great Depression and complete Economic Collapse we've ever seen... :( :mad:

I'm tired of Socialism for the Rich and Elite Fatcats
Capitalism for the poor and working folks

Bush's sh*t runs downhill "trickle down" theory isn't working..

To me that is a good enough reason alone to vote for a "change"....

Keep trying OT.

All hard working folks I know have fared well the last decade. Many small businesses were birthed and prosperous.

And under the Bush/McCain plan our grandkids unborn already have a massive debt against them...
Is that how you operate your business- borrow and spend until your business collapses- and then borrow some more :???: ...Because thats been the Bush/McCain policy....
Time to end it- time to put some responsibility back into government.Time for "change"..
 
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Anonymous

Guest
Sandhusker said:
What is going to happen to the debt after Obama's newest welfare program is initiated, OT?



I have more faith in Obama's plan being rational than I do a 72 year old professional Lobbyiest owned whore politician that is now telling folks "he will pay off the national debt and balance the budget in his first term in office"- while also spouting he's going to cut taxes... Now he's either an outright liar or knows nothing- because even back in 2001 Paul O'Neill said at that time the only way to just balance the budget would be huge spending cuts-and tax increases BOTH...But Bush didn't like that advice- so he just got rid of him and spent more and said "charge it"... And since then Bush added $Trillions more in national debt....

I'm tired of sending Trillions $ overseas to build their infrastructure ($10 Billion a month to Iraq)...I'd at least like to see our money spent in AMERICA- for AMERICANS- to build AMERICA....I have more faith in Obama doing that....
 

RobertMac

Well-known member
OT, I'm all for a balanced budget amendment...do you believe "the change" will include that from Obama and a Democrat Congress?

NO!!! The Democrat Congress, in two years, has increased the debt ceiling from 8T to 11T!!!!! :eek: :shock:

huge spending cuts-and tax increases BOTH
With Democrats we will get huge tax increases and HUGE spending increases...what will that do to your grandkids debt????????????????
 

Vision

Well-known member
Oldtimer said:
backhoeboogie said:
Oldtimer said:
Well look where an economic policy and tax plan controlled 12 out of 14 years by a Republican Congress and the last 8 years by a Bush Regime Whitehouse has put us....
The closest to the Great Depression and complete Economic Collapse we've ever seen... :( :mad:

I'm tired of Socialism for the Rich and Elite Fatcats
Capitalism for the poor and working folks

Bush's sh*t runs downhill "trickle down" theory isn't working..

To me that is a good enough reason alone to vote for a "change"....

Keep trying OT.

All hard working folks I know have fared well the last decade. Many small businesses were birthed and prosperous.

And under the Bush/McCain plan our grandkids unborn already have a massive debt against them...
Is that how you operate your business- borrow and spend until your business collapses- and then borrow some more :???: ...Because thats been the Bush/McCain policy....
Time to end it- time to put some responsibility back into government.Time for "change"..

Hell OT - If they were born under LBJ they were born with a massive debt against them....
 

Vision

Well-known member
RobertMac said:
OT, I'm all for a balanced budget amendment...do you believe "the change" will include that from Obama and a Democrat Congress?

NO!!! The Democrat Congress, in two years, has increased the debt ceiling from 8T to 11T!!!!! :eek: :shock:

huge spending cuts-and tax increases BOTH
With Democrats we will get huge tax increases and HUGE spending increases...what will that do to your grandkids debt????????????????

Its ok, OT thinks that his grandkids can be taxed into prosperity, so lets have the 90% tax rate NOW!

WE'LL ALL BE RICH!
 
A

Anonymous

Guest
Vision said:
RobertMac said:
OT, I'm all for a balanced budget amendment...do you believe "the change" will include that from Obama and a Democrat Congress?

NO!!! The Democrat Congress, in two years, has increased the debt ceiling from 8T to 11T!!!!! :eek: :shock:

huge spending cuts-and tax increases BOTH
With Democrats we will get huge tax increases and HUGE spending increases...what will that do to your grandkids debt????????????????

Its ok, OT thinks that his grandkids can be taxed into prosperity, so lets have the 90% tax rate NOW!

WE'LL ALL BE RICH!

Well explain how well things are going under the current Spend and Borrow Bush/Repub policy :???:

Our country is more nationalized now than even FDR thought of :roll:
 

Vision

Well-known member
Oldtimer said:
Vision said:
RobertMac said:
OT, I'm all for a balanced budget amendment...do you believe "the change" will include that from Obama and a Democrat Congress?

NO!!! The Democrat Congress, in two years, has increased the debt ceiling from 8T to 11T!!!!! :eek: :shock:


With Democrats we will get huge tax increases and HUGE spending increases...what will that do to your grandkids debt????????????????

Its ok, OT thinks that his grandkids can be taxed into prosperity, so lets have the 90% tax rate NOW!

WE'LL ALL BE RICH!

Well explain how well things are going under the current Spend and Borrow Bush/Repub policy :???:

Our country is more nationalized now than even FDR thought of :roll:

Ummm boths ides have been borrowing and spending. The difference is that tax cuts like what we had in 2002 promote economic growth and raise government revenue faster.

THE PROOF:


Reducing the capital gains tax rate from 20% to 15% increased capital gains tax receipts by 79% from 2000 to 2004. Cutting the dividend tax rate by more than half–from 39.6% to 15%–increased dividend tax receipts by 35% from 2002 to 2004. And corporate tax receipts have nearly tripled since 2003, reaching $250 billion for the past nine months, 26% higher than the same period last year. (WSJ July 25, 2006)

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WASHINGTON — The federal deficit in the budget year that just ended fell to a four-year low of $247.7 billion _ a figure President Bush touted Wednesday as “proof that pro-growth policies work.” The deficit for the budget year that ended Sept. 30 was 22.3 percent lower than the $318.7 billion imbalance for 2005, handing Bush a welcome economic talking point as Republicans battle to hold onto control of Congress in the midterm elections. (AP Oct. 11, 2006)

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One place it has come from are corporations, whose tax collections have climbed by 76% over the past two years thanks to greater profitability. Personal income tax payments are up by 30.3% since 2004 too, despite the fact that the highest tax rate is down to 35% from 39.6%. The IRS tax-return data just released last month indicates that a near-record 37% of those income tax payments are received from the top 1% of earners — “the rich,” who are derided regularly in Washington for not paying their “fair share.” (WSJ Oct. 6 2006) - The rich are paying more in real dollars since the tax cuts.

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US Treasury Sets New 1-Day Tax Receipt Record Of $85.8 Billion
Tuesday September 19th, 2006 / 0h04

WASHINGTON -(Dow Jones)- The U.S. government recorded record-high overall and corporate tax receipts on Sept. 15, which was a quarterly deadline for tax payments, the Treasury said Monday.

Total tax receipts were $85.8 billion on Friday, compared with the previous one-day record of $71 billion on Sept. 15 of last year, the Treasury said.
Within the overall figure, corporate tax receipts Friday were $71.8 billion, up from $63 billion in September of last year.

Treasury Undersecretary for Domestic Finance Randal Quarles said Friday’s numbers provided a “continuing demonstration of the strength of the U.S. economy.”

“In fact, Friday’s gross receipts were the largest in a single day in the nation’s history - 20% higher than receipts on the same quarterly tax payment date last year,” Quarles said in a statement.

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October 27, 2006 at 10:30 pm e
Laffer's Victory - July 10, 2006 - The New York Sun
July 10, 2006 Edition
Laffer’s Victory
New York Sun Staff Editorial
July 10, 2006

It’s official — Arthur Laffer wins. New data show federal revenues surged in the first three quarters of the current fiscal year. Corporate tax receipts are up more than 26% over the same period last year, ringing in at $250 billion. Individual income tax collections, at $791 billion, are up 14% over the first nine months of fiscal 2005. The Congressional Budget Office projects corporate tax receipts will total $330 billion by the end of the fiscal year. As a result, the deficit for the year is expected to be about $300 billion, down from $318 billion last year and $412 billion the year before.

What, you ask, has led to this miraculous event? A tax cut, it turns out. Or rather, an array of tax cuts, on corporate income, personal income, and capital gains. These tax cuts, passed in 2001 and 2003, appear to be having the desired effect of spurring economic growth by creating addition incentives for work and entrepreneurship. The latest numbers, moreover, offer some hard data to challenge some of the charges leveled against President Bush and congressional Republicans in respect of tax cuts. These tax cuts haven’t exactly benefited “the rich.” A third of those higher income-tax revenues came from the highest-earning 1% of households, according to the New York Times.

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Budget Deficit Drops $296B Under Estimate
Jul 11, 11:01 AM (ET)
By ANDREW TAYLOR
My Way
WASHINGTON (AP) - President Bush touted new deficit figures Tuesday showing considerable improvement upon earlier administration predictions, saying it shows the wisdom of his tax cuts.

Bush himself announced the figures - a task that for the most part has been left to lower-ranking administration officials in the past. The new figures show the deficit for the budget year ending Sept. 30 will be $296 billion - much better than the $423 billion that Bush predicted in February and a slight improvement over 2005.

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October 27, 2006 at 10:33 pm e
Surprising Jump in Tax Revenues Is Curbing Deficit
Surprising Jump in Tax Revenues Is Curbing Deficit - New York Times
By EDMUND L. ANDREWS
Published: July 9, 2006

WASHINGTON, July 8 — An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief.

Graphic: Mixed Signals On Tuesday, White House officials are expected to announce that the tax receipts will be about $250 billion above last year’s levels and that the deficit will be about $100 billion less than what they projected six months ago. The rising tide in tax payments has been building for months, but the increased scale is surprising even seasoned budget analysts and making it easier for both the administration and Congress to finesse the big run-up in spending over the past year.

Tax revenues are climbing twice as fast as the administration predicted in February, so fast that the budget deficit could actually decline this year.

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A flood of income tax payments pushed up government receipts to the second-highest level in history in April, giving the country a sizable surplus for the month. In its monthly accounting of the government’s books, the Treasury Department said Wednesday that revenue for the month totaled $315.1 billion as Americans filed their tax returns by the April deadline. The gusher of tax revenue pushed total receipts up by 13.4 percent from April 2005. (AP May 10, 2006)

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WASHINGTON, July 8 — An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief. (NYT July 9, 2006)

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Here is a Video of JFK talking about how tax cuts can increase revenue.

YouTube - Income Tax Cut. JFK Hopes To Spur Economy 1962/08/13 (1962)
http://www.youtube.com/watch?v=aEdXrfIMdiU
 
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