Need welfare? Elect Obama
As talk of the economy and taxes dominate the political pundits, and the Presidential candidates stump speeches, I again wanted to take a look at the reality of the Obama tax plan. In searching for those more intelligent than myself to evaluate the tax plan I came across the Wall Street Journal. Considering the daily focus on money and economics I doubt anyone could call them an unqualified source.
And while this article may be a bit dated I find it accurate. In fact since it was written the only real change ahs been the fact that Obama has promised, and virtually guaranteed, that he will give away even more money. Suffice to say that in total the Obama tax plan is really a welfare system.
“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.”
Giving people money that they have not earned and is not theirs is welfare. That is the core of his “share the wealth” redistribution of income he proposes as a tax plan. That is anything but the American way. It is far closer to a socialistic Government.
“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.
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.”
This may all sound great, except it forgets something important. All that money being given to low income people and families has to come from somewhere. And that somewhere is feeling the crunch of credit and the slow down in the economy as well.
“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.”
So while those in the lowest income brackets make the most money, it’s all money that is undeserved. You might be saying, “I don’t care. That’s money coming to me and not out of my pocket.”
But that would be a lie. In fact that is the exact thought the Obama campaign and Democrats hope you think. Because money does not grow on trees, and deficit spending that the Government does so well must be paid off at some point.
The money comes from business, at least they hope. By increasing corporate taxes and that of those making over $250,000 the Government hopes to cover the costs of the ‘welfare’ and the bigger government Obama promises (costing $800 billion dollars on it’s own).
But those in the top income bracket have no reason to invest in or create small businesses. The capital gains tax means that investing is not worthwhile. Unless you can legally find a way to make 45% on investments in a down market (that would cover the 20% tax, 10% broker fee, and leave 15% which would be further hit by personal taxes – and for the record at the top of the internet bubble the average investment made 35% profit and this is far from that exuberant market).
And business will pass the cost onto consumers, while firing employees to make up the difference. Kind of like what Yahoo just did. And you can expect more of that from more companies if Obama is elected.
Welfare is not a bad thing in itself. Most of us need help at one point in our lives. But that is not the same as handing out someone else’s money simply because of envy that they worked hard and made more money. It’s not the same as the Government arbitrarily capping how much money you can make in your chosen field of work. It’s not the same as essentially working for the Government when you had struggled to be able to work for yourself.
The repercussions of the ‘welfare’ or effectively higher taxes, and higher unemployment that is the Obama plan are severe. And in a Democratic Congress that is more focused on placing blame on anyone else while spending money that does not exist those problems become more extreme.
Senator Obama is a good American, and his high hopes are laudable. But America cannot afford his socialist leaning views.