Turns out that the $300 BILLION tax cut called for by the incoming Barack Obama isn’t going to be a tax cut to actual tax payers BUT INSTEAD, much of it will wind up in the form of an INCREASE in the Earned INCOME TAX CREDIT (EITC) to people who don’t pay federal income taxes in the first place.
Yikes!
That’s NOT a “tax-cut,” it’s MASSIVE “social spending” aimed at expanding a welfare program and it’s going to come from even more DEFICIT SPENDING!
Those who currently receive the EITC DO NOT pay any income taxes.
Yikes!
That’s NOT a “tax-cut,” it’s MASSIVE “social spending” aimed at expanding a welfare program and it’s going to come from even more DEFICIT SPENDING!
Those who currently receive the EITC DO NOT pay any income taxes.
In fact, the top 10% of income earners earn 47.3% of the AGI (aggregate gross income) and pay a whopping 71% of the income taxes. That’s UP 2% since the Bush-43 across-the-board tax income tax rate cuts! So, this income is taxed at 1.5 X or 150% of the percentage of that share of the overall income earned!
The bottom 50% of U.S. income earners (a number which includes part-time, per diem and illegal workers) earn 12.5% of the AGI and pay only 3% of income taxes! This income is taxed at LESS than 0.25 or a measley 25% percent of that share of the overall income earned!
The Mid-40% of U.S. income earners ($48,000 to $108,000 per year) earn appx. 40% of AGI and pay about 26% of the income taxes. So this income is taxed at about 0.62 or 62% of the percentage of that share of the overall income earned!
An across the board “$500 rebate” disproportionately benefits those who earn/PRODUCE less, while an across-the-board rate cut clearly delivers the only real chance for any “TAXPAYER relief.”
BUT that’s not the only problem with such a “tax rebate.”
Increasing a “welfare payment” (the EITC) is NOT “cutting taxes” but “increasing social spending,” and it will have the same inevitable result as would increasing the WIC program.
The bottom 50% of U.S. income earners (a number which includes part-time, per diem and illegal workers) earn 12.5% of the AGI and pay only 3% of income taxes! This income is taxed at LESS than 0.25 or a measley 25% percent of that share of the overall income earned!
The Mid-40% of U.S. income earners ($48,000 to $108,000 per year) earn appx. 40% of AGI and pay about 26% of the income taxes. So this income is taxed at about 0.62 or 62% of the percentage of that share of the overall income earned!
An across the board “$500 rebate” disproportionately benefits those who earn/PRODUCE less, while an across-the-board rate cut clearly delivers the only real chance for any “TAXPAYER relief.”
BUT that’s not the only problem with such a “tax rebate.”
Increasing a “welfare payment” (the EITC) is NOT “cutting taxes” but “increasing social spending,” and it will have the same inevitable result as would increasing the WIC program.
5 comments:
JMK,
Obama's economic speach last week pretty much proved to me that he is absolutely clueless about how our economy works, or he wants to destroy us...I haven't decided which yet.
He wants to destroy us AND he's clueless about how our economy works.
While I AM very concerned about this social spending disguised as a "tax cut," I don't believe Obama, Emanuel or ANY mainstream Democrat "wants to destroy us."
Rahm emanuel is a very savvy politician who INTENDS to have Obama re-elected in 2012. To do that, they have to improve things. They HAVE to be able to run on, "Are you better off now than you were?..."
Rahm Emanuel is probably the most savvy politician in the U.S. right now...maybe not the greatest guy, certainly not the nicest guy, but he has proven to be far more savvy than his Republican opponents.
While there are a few conspiracy theorists around who claim that "the Obama administration wants an economic collapse in order to institute a system of feudal socialism, believing that a desperate people will accept anything."
I loathe making predictions, BUT I am positive that there's absolutely NOTHING to such theories AND beyond that, they are incredibly poorly thought out, making them as foolish as the 9-11 Truther conspiracy theories.
First, IF that were so, then the GOP's ineptitude is as much to blame as anything else for our coming demise.
Second, IF the economy tanks further in 2009, the Obama administration may get a pass, IF that administration is offering a plan of action that looks to have hope of turning things around.
Should things get even worse in 2010, then the MSM will savage him as much as they did Jimmy Carter (and Jimmy Carter was SAVAGED by the MSM during his tenure) and the GOP will take back Congress.
THAT (a GOP re-takeover of Congress) will ONLY be a positive development IF the Conservatives run that takeover and marginalize the Moderate Liberal collaborators.
There are two ways of looking at improving the economy - priming the SUPPLY Side (stimulating investment AND spending via business and tax RATE cuts) which Conservatives tend to support, OR priming the DEMAND Side (stimulating the economy through increased spending, increasing demand, via an array of one time tax rebates and across the board "stimulus checks) which Leftists tend to support.
I AGREE that recent history has shown that Supply Side policies work and Demand Side (Keynesian) policies don't, BUT that does NOT imply that ardent Keynesians (like this year's Nobel Prize winner in Economics, Paul Krugman) want to "destroy the U.S. economy."
In FACT, I'm sure they don't.
Paul Krugman has said that "We won't make progress as a civil society until working people come to understand that they are fortunate to be able to work and eagerly accept their responsibilities to those who are less fortunate."
While I couldn't disagree more with Krugman, I DON'T have any reason to believe he's motivated out of malice. He merely believes a lot of things that just aren't supported by the facts.
Right now, Conservatism is in full bore retreat...and things may get much worse.
The MSM is playing things very well. If I were them, I'd do the same thing - make Anne Coulter "the face of American Conservatism," in order to alienate even more moderates from that viewpoint.
That is, I must say, a BRILLIANT strategy!
What they're hoping is that more and MORE Conservatives get madder and MADDER and act more and MORE unhinged...at that point they could, very possibly start a movement not to marginalize Conservatism, but to criminalize it as "ideological hatred."
I AM beginning to worry that some Conservatives will fall into that trap.
he's just getting started my friend,,sigh....thanks for your very kind words at WHT!
"he's just getting started my friend, sigh" (Angel)
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For the record Angel, I don't believe that mainstream Democrats like Barack Obama and Rahm Emanuel are looking to destroy our economy...I think they are, like folks such as Paul Krugman, woefully misguided.
In my view and this is merely my opinion, I think the worst thing we, as Conservatives, can do, is to react the same way the far-Left has over the previous eight years.
They politicized a war and rooted for a bad economy at every turn....whether that's a "winning strategy" or not, I find it repulsive and beneath us.
For Conservatives to do that now, would make us WORSE than them...that's a FACT. They can't help themselves....we can and must.
We rightly railed against BDS, we'd be the worst kind of hypocrites to now engage in ODS.
Personally, I'm not going to go there.
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