Posted by Tina
I found the article below from CNSNews very informative. It explains in terms anyone can understand how Senator Obamas tax plan works. It moves beyond words and gets into specific, practical application. When you consider that the Bush tax cuts will expire in 2010 (along with his incresed per child deduction) this plan means that many of us will be hit pretty hard by the Senators tax proposals in his first term.
Please read the entire article. If you have concerns about our economy and, more importantly, your own fragile back pocket, youll want the information this article provides before you vote…after would be a disaster!
Obamas Tax Cut is Actually a Spending Increase, Says Non-Partisan Group, by Matt Cover
Democratic presidential candidate Barack Obamas plan to cut taxes on 95 percent of taxpayers would effectively increase government spending by an average of $64.8 billion a year and effectively raise income tax rates for many Americans, even on some earning $20-$50,000 per year, according to the non-partisan Tax Policy Center. *** The heart of Obamas tax cut proposal is in his use of refundable tax credits, which the Center describes as credits available to eligible households even if they have no income tax liability — in short, refunds available even to those who dont pay taxes.
The problem with Obamas characterization that his proposals are tax cuts is that refundable credits are calculated as outlays, or direct spending, not as reductions in tax rates, according to the Center. This means that, in budgetary terms, some of Obamas tax cuts are actually spending increases. *** The Tax Policy Center estimates that Obamas spending proposals will be so large that they effectively eliminate income taxes for 15 million households, increasing the percentage of households that pay no taxes from 37.8 percent to 48.1 percent. *** Obamas biggest refund, and the one most likely to go to non-taxpayers, is his Making Work Pay credit, which would give $500-$1000 to everyone making under $200-250,000 a year. This proposal, which the Tax Policy Center says is intended to offset the regressivity of payroll taxes, would cost taxpayers $323.4 billion during Obamas first term, if elected. *** Most households making $30,000-$75,000 will not see a reduction in their taxes under Obamas plan relative to current law, according to the Center. In fact, the only strata that will see a majority of its effective tax burden reduced under Obama are those making less than $30,000 per year and those making $75,000-$200,000 per year.