Obama’s Tax ‘Plan’

In a September 2008 Fox News Channel television interview, Obama pledged to cut taxes for 95 percent of Americans, while raising taxes on those who earn more than $250,000. Political commentator Bill O’Reilly objected, “That’s class warfare. You’re taking the wealthy in America, the big earners … you’re taking money away from them and you’re giving it to people who don’t. That’s called income redistribution. It’s a socialist tenet. Come on, you know that.”

Obama replied, “Teddy Roosevelt supported a progressive income tax…. If I am sitting pretty and you’ve got a waitress who is making minimum wage plus tips, and I can afford it and she can’t, what’s the big deal for me to say, I’m going to pay a little bit more? That is neighborliness.”

It’s also Socialism Mr Hussein!

In October 2008, CNS News provided the following analysis of the Obama tax plan, which, according to Obama, would feature the aforementioned tax cut for all those earning less than $250,000 per year, or 95 percent of American taxpayers:

“Democratic presidential candidate Barack Obama’s plan to cut taxes on 95 percent of taxpayers would effectively increase government spending by an average of $64.8 billion a year and effectively raise income tax rates for many Americans, even on some earning $20-$50,000 per year, according to the non-partisan Tax Policy Center.

“The heart of Obama’s tax cut proposal is in his use of refundable tax credits, which the Center describes as ‘credits available to eligible households even if they have no income tax liability’ — in short, refunds available even to those who don’t pay taxes. These refunds are claimed on tax returns and are paid to all taxpayers who qualify for them, regardless of whether they owe taxes or not. These refunds have the ability of reducing a taxpayer’s liability below zero, meaning they can get a refund without actually paying taxes.

Editor: HUH? Thats not taxation….thats welfare!

“In real numbers, 60.7 million people who have no tax burden at all will receive refunds from Obama, while only 33.8 million people, who pay approximately 40 percent of income taxes, will get any kind of refund. Twenty percent of taxpayers, who pay 87.5 percent of total income taxes, will actually see after-tax income decline under Obama by nearly two percent, according to the Center.

“By using these refunds, Obama is able to claim that he is giving a tax cut to 95 percent of households, although only 62 percent of households pay any income taxes at all. This means that Obama’s tax plan calls for giving money to some households that do not pay taxes, including a plan to make community college ‘essentially free’ and pay 10 percent of the interest on all mortgages.

“The problem with Obama’s characterization that his proposals are tax cuts is that refundable credits are calculated as outlays, or direct spending, not as reductions in tax rates, according to the Center. This means that, in budgetary terms, some of Obama’s tax cuts are actually spending increases.

“The Tax Policy Center estimates that Obama’s spending proposals will be so large that they effectively eliminate income taxes for 15 million households, increasing the percentage of households that pay no taxes from 37.8 percent to 48.1 percent….

“When compared with current law, people earning $20,000-$50,000 a year will see their effective tax rates — the amount of money the taxpayer actually ends up paying the government — increase on average under Obama’s plan, according to Tax Policy Center figures.

“Most households making $30,000-$75,000 will not see a reduction in their taxes under Obama’s plan relative to current law, according to the Center. In fact, the only strata that will see a majority of its effective tax burden reduced under Obama are those making less than $30,000 per year and those making $75,000-$200,000 per year.”

The net result of the tax plan, according to the figures above, will be to increase by more than 25 percent the number of households that pay no taxes at all, thereby effectively increasing the size of the welfare state.