Monday, October 13, 2008
More fun with numbers
I was flying to Chicago a couple of years ago when I got into a discussion about taxes with the feller sitting next to me. (I'll call him "King" because he was carrying a Steven King paperback.) The reason our conversation steered to taxes is because the date was April 14th. King asked if I had my taxes done, and I told him that my taxes had been filed for weeks.
When I asked King if he'd filed his taxes, he not only replied in the affirmative, he got plum giddy telling me that he had qualified for an "earned income tax cut." I asked if he meant the Earned Income Tax Credit" and he said "yes." King then went on and on about how great it was that his unexpected tax cut meant that he'd be getting more money back from the government than he expected.
I tried to steer the conversation toward something other than taxes (I think I told him that I was going to go to my first Cubs game while in Chicago), but King wouldn't bite. He kept going on and on about his "tax cut." Since he was starting to get on my nerves, I decided to give him a short tutorial in tax policy.
Since King wasn't wearing a wedding ring, I asked if he had a wife. He said no. Then I said, and I just about word-for-word remember what I said to him, "You didn't get a tax cut. You didn't earn much money last year. Because your income is so low, you qualify for the Earned Income Tax Credit. So, basically, what you're getting is a check from the government to supplement your income."
If I'd insulted King's mother I couldn't have gotten him more riled up. He let me know, in no uncertain terms, that he made "a lot" of money and had "a big house." I told him that he couldn't have made a lot of money because if he did, he would not have qualified for the EITC. Before he could say anything, a flight attendant came to ask if we'd like anything to drink. The older lady sitting next to King asked him a question (I think she was tired of listening to us) and our conversation came to a quick end. He didn't say **** to me the rest of the flight, or when we were leaving the plane in Chicago.
I mention that story because today's Wall Street Journal has a great editorial about B. Hussein Obama's so-called middle class tax cuts. There may be some people in this world who are dumb enough to believe that Obama's economic plans include millions and millions of dollars in "tax relief" for working families. The WSJ, and yours truly, ain't buying none of it. Check this out:
One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today.
APIt's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut."
For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase "tax credit." Mr. Obama is proposing to create or expand no fewer than seven such credits for individuals:
- A $500 tax credit ($1,000 a couple) to "make work pay" that phases out at income of $75,000 for individuals and $150,000 per couple.
- A $4,000 tax credit for college tuition.
- A 10% mortgage interest tax credit (on top of the existing mortgage interest deduction and other housing subsidies).
- A "savings" tax credit of 50% up to $1,000.
- An expansion of the earned-income tax credit that would allow single workers to receive as much as $555 a year, up from $175 now, and give these workers up to $1,110if they are paying child support.
- A child care credit of 50% up to $6,000 of expenses a year.
- A "clean car" tax credit of up to $7,000 on the purchase of certain vehicles.
Here's the political catch. All but the clean car credit would be "refundable," which is Washington-speak for the fact that you can receive these checks even if you have no income-tax liability. In other words, they are an income transfer -- a federal check -- from taxpayers to nontaxpayers. Once upon a time we called this "welfare," or in George McGovern's 1972 campaign a "Demogrant." Mr. Obama's genius is to call it a tax cut.
So there you have it. B. Hussein Obama aims to out-McGovern George McGovern.
Canada's voters are poised to give the Conservative Party of Canada, which is led by the tax-cutting, culturally conservative Stephen Harper, an outright majority in the Canadian Parliament (Canada's national election is tomorrow). American voters are poised to elect a feller who hopes to "change" the country by injecting it with a healthy dose of McGovernomics.
When did Canadians get so smart?!
When I asked King if he'd filed his taxes, he not only replied in the affirmative, he got plum giddy telling me that he had qualified for an "earned income tax cut." I asked if he meant the Earned Income Tax Credit" and he said "yes." King then went on and on about how great it was that his unexpected tax cut meant that he'd be getting more money back from the government than he expected.
I tried to steer the conversation toward something other than taxes (I think I told him that I was going to go to my first Cubs game while in Chicago), but King wouldn't bite. He kept going on and on about his "tax cut." Since he was starting to get on my nerves, I decided to give him a short tutorial in tax policy.
Since King wasn't wearing a wedding ring, I asked if he had a wife. He said no. Then I said, and I just about word-for-word remember what I said to him, "You didn't get a tax cut. You didn't earn much money last year. Because your income is so low, you qualify for the Earned Income Tax Credit. So, basically, what you're getting is a check from the government to supplement your income."
If I'd insulted King's mother I couldn't have gotten him more riled up. He let me know, in no uncertain terms, that he made "a lot" of money and had "a big house." I told him that he couldn't have made a lot of money because if he did, he would not have qualified for the EITC. Before he could say anything, a flight attendant came to ask if we'd like anything to drink. The older lady sitting next to King asked him a question (I think she was tired of listening to us) and our conversation came to a quick end. He didn't say **** to me the rest of the flight, or when we were leaving the plane in Chicago.
I mention that story because today's Wall Street Journal has a great editorial about B. Hussein Obama's so-called middle class tax cuts. There may be some people in this world who are dumb enough to believe that Obama's economic plans include millions and millions of dollars in "tax relief" for working families. The WSJ, and yours truly, ain't buying none of it. Check this out:
One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today.
APIt's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut."
For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase "tax credit." Mr. Obama is proposing to create or expand no fewer than seven such credits for individuals:
- A $500 tax credit ($1,000 a couple) to "make work pay" that phases out at income of $75,000 for individuals and $150,000 per couple.
- A $4,000 tax credit for college tuition.
- A 10% mortgage interest tax credit (on top of the existing mortgage interest deduction and other housing subsidies).
- A "savings" tax credit of 50% up to $1,000.
- An expansion of the earned-income tax credit that would allow single workers to receive as much as $555 a year, up from $175 now, and give these workers up to $1,110if they are paying child support.
- A child care credit of 50% up to $6,000 of expenses a year.
- A "clean car" tax credit of up to $7,000 on the purchase of certain vehicles.
Here's the political catch. All but the clean car credit would be "refundable," which is Washington-speak for the fact that you can receive these checks even if you have no income-tax liability. In other words, they are an income transfer -- a federal check -- from taxpayers to nontaxpayers. Once upon a time we called this "welfare," or in George McGovern's 1972 campaign a "Demogrant." Mr. Obama's genius is to call it a tax cut.
So there you have it. B. Hussein Obama aims to out-McGovern George McGovern.
Canada's voters are poised to give the Conservative Party of Canada, which is led by the tax-cutting, culturally conservative Stephen Harper, an outright majority in the Canadian Parliament (Canada's national election is tomorrow). American voters are poised to elect a feller who hopes to "change" the country by injecting it with a healthy dose of McGovernomics.
When did Canadians get so smart?!
# posted by Joltin' Django @ Monday, October 13, 2008 
