The Myth of the Obama Tax Cuts

by Sal on October 13, 2008

in Economy,Politics

One of Obama’s mantras this election season is the claim that he will give a Tax Cut to 95% of working families.  This claim has contributed to taking McCain off his game, and has shattered the accurate perception that Democrats raise taxes.

The Wall Street Journal today has written a great piece debunking this myth.  The so-called tax cuts that Obama has proposed are not really tax cuts at all, but rather welfare payments, or government handouts, based on certain types of behavior.  The proof of this is that these so-called tax cuts go to the 40% people who don’t even pay any taxes

The article also points out thatunder Obama’s plan, if a low or middle-income tax payer gets a raise, their tax credit gets phased out as their income rises.  The article points to a study by the American Enterprise Institute that shows the effective marginal tax rate under current law and under Obama’s proposals.

In all cases, Obama’s effective Marginal Tax rate will be higher, making middle class and working Americans pay more in actual income taxes.  Under his plan, the only people who would make out better are those who currently do not pay any taxes, as they would receive a free check in the mail. 

Additionally, as stated on these pages previously, the Obama tax proposals would also let the Bush Tax Cuts of 2001 and 2003 expire, thus raising everyone’s marginal rates.  Thus, according to a Harvard University Economist, it would make the effective marginal rate of taxation almost 3% higher than under current law.  In addition to that, Obama proposes additional tax increases on those in the top 5% income bracket, which would harm small businesses, and the upper 5% of wage earners who make the economy work

All of this says nothing about his other tax increase proposals, such as his proposal to increase the Capital Gains tax rate, thus stifiling investment in wall street at percisely the time when it is needed the most.  This and other tax proposals led 100 U.S. Economists (including 5 nobel lauriets) to condemn the Obama Economic Plan.

Obama’s tax plan will be a disaster for Americans.  It will take the current recession and amplify it, making the crisis worse and stifle any recovery.  Obama’s plan is all about wealth-redistribution and Socialism.  His plan will lead to higher net-taxes, and will harm most hard-working, middle-class Americans.

{ 3 trackbacks }

Obama’s Marxist Worldview Revealed | Axis of Right
October 13, 2008 at 4:37 pm
Third Presidential Debate Preview | Axis of Right
October 15, 2008 at 3:22 pm
The Creeping Middle Class According to Obama | Axis of Right
October 28, 2008 at 12:16 pm

{ 2 comments… read them below or add one }

jean October 13, 2008 at 7:26 pm

American people need to read this and hear more about this.
Our country is in debt now to the tune of several Trillion Dollars. Unemployment is on the rise, home values are now, gas prices are high, food cost and energy cost are higher. And yet the Democrats want to pass another stimulus package. Where is this money coming from? American people go read about the Great Depression. You raise taxes in a weakenn economy, America will be in a Depression that will make the one in 1930′s look good.
There is more people now, some people have lived on Welfare for generations, jobs have been sent overseas, so we don’t need more taxes now, and certainly no more give away programs.

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John October 13, 2008 at 9:16 pm

Thanks guys! I was looking for an article with the truth. Keep up the good work. I live in Chicago (belly of the beast). Pray for me!

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