The Wall Street Journal and the Washington Times today published articles about Barack Obama’s plan to offer “tax cuts to 95% of working families.” Both articles concluded that the Obama plan is a massive shell-game, redistributing income from one group to another group, similar to welfare. Here’s why: According to various independent analyses, the Obama “tax cuts” would send government checks to millions of households that pay no federal income tax. By any rational definition, that’s not a tax cut – it’s welfare!If Obama is successful on the tax front as well as on the health care and other social fronts, we'll see a decidedly leftward shift in our economic and political culture. Such a shift would accelerate our move towards the European welfare state model and mean a loss of freedoms and prosperity.
According to the Tax Foundation, under current law, there will be “47 million tax returns with zero-income tax liability in 2009… That's one-third of all tax returns and those 47 million tax returns represent 96 million individuals." The Heritage Foundation estimates that “by 2011, under the Obama plan, an additional 10 million filers would pay zero taxes while cashing checks from the IRS.” And the Tax Policy Center found that the government payments for such “refundable tax credits” will balloon to more than $1 trillion in ten years.
In addition, the Wall Street Journal reports that because many of Obama’s “tax credits” are phased out as you earn more, they become a “disincentive to working harder” for many middleclass workers who take on extra overtime or a second job. According to the Journal’s analysis, “Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned.”
How does Obama pay for this plan to give “tax cuts” to people who do not currently pay income taxes? He raids Social Security. The Washington Times report notes, “The Obama campaign dismisses such criticism, arguing that even if many working taxpayers owe no income taxes, they pay Social Security payroll taxes out of their earnings.” So to afford government payments to folks who do not pay incomes taxes, the Obama plan will further erode the solvency of Social Security.
Campaigning in Ohio yesterday, Obama was asked about his tax plan by a plumber, who said, “Do you believe in the American dream? I’m being taxed more and more for fulfilling the American dream.” Obama’s answer was very revealing. He told this plumber, “It’s not that I want to punish your success. I just want to make sure that everybody that is behind you, that they have a chance for success too. I think that when you spread the wealth around, it’s good for everybody.”
“Spreading the wealth” and mandating equality of results is socialism, my friends. Government should not be in the business of picking winners and losers. What government should do is create an environment where there is equal opportunity for everyone to succeed on their own merits and ability.
Europe is clearly on the road to economic, social and political decline. Their populations are declining which steams from a collectivist, narcissistic view of life. There is little hope for the future which is revealed most vividly the lack of children. They are driven by a desire for security, exemplified by their cradle to the grave welfare system. The only problem is this system is built on sand which can not be sustained. (There are fewer and fewer taxpayers to keep funding their system.)
An Obama victory with significant liberal majorities in Congress will mean an accelerated shift towards the European welfare model rather than the slow drift we've witnessed in recent decades. Again the cost is clear. Less freedom and less prosperity for Americans.