Posted by
On the Right on Monday, October 13, 2008 12:38:32 PM
Given Barack Obama’s relentless populism this cycle, the Wall Street Journal analysis
of his tax cuts should surprise no one. They find that Obama relies
less on actual cuts in tax rates and more in specific “refundables”,
grants that filers receive whether they have a tax liability or not.
Instead of reducing taxes, Obama makes his redistributionism explicit:
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.
It’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[.]
Six of the seven listed in the Obama plan are these “refundables”,
money people get from the federal government even if they pay no taxes
at all. These are not “tax cuts” but instead welfare grants based on
specific social policy. It’s blatant redistributionism, as the money
comes from tax increases on the wealthy.
Real tax cutters use that policy as a way to restrain growth in
federal government, although the Republicans certainly forgot the other
part of that equation for six years — cut spending. Obama’s plan actually makes people more
dependent on federal government, and expands it significantly. It adds
to the entitlement mentality while doing nothing about rewarding risk.
This plan will penalize risk and encourage the wealthy to find even
more shelters for their income and capital, more likely outside the US,
which will mean fewer jobs and fewer opportunities.
The last thing this economy needs is a flight of capital. We need
that money invested in America to create jobs, not hidden away from an
aggressively redistributionist federal government. We should be
reducing taxes, but not giving more money to people who don’t pay any
at all.